We are all afraid of the unknown to some degree or another, but if we want to pursue our ideas, we need to overcome these fears. How do successful entrepreneurs do it? Here are three tips from the field.
What Type of Risks Are You Comfortable With?
When I was doing my PhD at Stanford, I had a conversation with my friend and mentor Tina Seelig in which I confessed that I wasn't a risk taker. What she said surprised me. Without waiting for a pause she told me that I was completely wrong. Rather than thinking of myself in binary terms as a risk taker or not, she encouraged me to think about different kinds of risk. For example, there are social risks, emotional risks, intellectual risks, financial risks, and so forth. I realized that I'm very comfortable with social and intellectual risks but less comfortable with financial risks (at the time I was in grad school, had four kids and was the sole breadwinner ... no wonder I wasn't comfortable with financial risks). This insight helped guide my career. Rather than leaping into a startup with no salary, I found I was much more comfortable as an idea entrepreneur: pushing new ideas and perspectives as a professor. By choosing the right risks for me, I have been able to do my best work.
Which Risks Are You Reducing?
One of the biggest myths of entrepreneurship is that entrepreneurs are risk takers. Instead, successful entrepreneurs are consummate risk avoiders. Or perhaps more accurately, they focus on reducing and deferring risks. Most successful entrepreneurs I know try to defer the risk to others, whether that is getting financial backing from someone else (risking someone else's money) or keeping their day job while they test out their ideas. In fact, a recent academic study showed that entrepreneurs who keep their day job while they test out their new idea are 33% less likely to fail than those who quit their job and then work on their idea. Once you have proven to yourself and others that you have a valuable opportunity, then you quit your day job, not before. Successful entrepreneurs also reduce the risks as much as possible. This may mean testing their ideas as quickly as possible with rapid experiments (avoiding wasting their time and money chasing a dead end) or borrowing components of a solution to build an early prototype (avoiding risking their own money to build solutions someone may not want). For you this means, when making a choice that seems risky, ask yourself, is there a creative way to avoid, defer, or reduce the risk?
What's the Value of the Risk?
Many people are afraid to try because they are afraid of failure. However, if you reduce the cost of your attempt, by framing it as an experiment, you reduce the cost of failure. Even when you conduct such an experiment, remember, every experiment has 1. option value (the value of the opportunity if you succeed), 2. strategic value (the value of the people you meet in the process) and 3. exit value (the value of the knowledge you gain in the process that may be re-applied elsewhere).
In closing, take smart risks by finding the risks you are comfortable, reducing or deferring the risks, and making wise choices about the value of what you try. If you do this, even if you fail, you will view it as a success.