- On May 31, 2018
- business, consultant, entrepreneurship, fear, innovation, mentor, project, riesgos, startups
When we are kids, grownups teach us to fear risks. From a very young age, they tell us to be careful with the rain because “you can get a cold”. They also remind us that “crossing the street is dangerous”.
But we learn throughout our lives, which teaches us that risks are the price we have to pay to accomplish our objectives.
If you like someone, you will only stand a chance if you ask them out on a date. When you want a job, you know for sure that you must send your CV and compete with others to open that door.
That is how you learn that you can only obtain the biggest rewards when you take significant risks even if you are afraid to do so. But that is how you start, overcoming fear.
Investing money is one of the main risks you will have to face as an entrepreneur. However, the financial risk goes beyond that. There are other factors at play such as reputation. Those who start up a business also invest time in the opportunities and bet on the intellectual capital by exposing their strategies in a market that tends to be highly competitive.
Have a look at the Japanese culture. If you start up a business and fail, your reputation is deeply compromised. The shame is so great that those who have “failed” usually put an end to their innovation journey as an attempt to protect their community from embarrassment. This paradigm is the reason why the number of Japanese startups is among the lowest in the world.
It is threatening, the risk of losing – in some cases – hundreds of dollars in a project execution. The anxiety rises if you had to quit the stability offered by a regular job or sell a valuable asset. In the beginning, all of this seems scary and can paralyze you. The consequences of failing at business are tangible. It is a real risk.
On the other hand, let’s think about a school scenario, where risk is reduced and a comfortable environment is created to give students the chance to practice some entrepreneurial skills. But is there any classroom that is safe enough? They will always have to stand before at least 30 classmates to propose their innovative solution. This is never exempt from social risks. With time, one can learn how to carefully calculate them and overcome them.
We can use a good advice for those potential entrepreneurs. Whether they are in a classroom or in a jam factory, the important thing is to have clarity and objectivity regarding the possible dangers of starting up a business. We can also assess the effort cost. That is a good way to begin the project. Once you have a list of risks, you can look for strategies to reduce them and contain them.
Experts can help you reduce the margin of error
If what you want is to manage financial risks, the first thing to do is to approach venture capitalists. The downside of making that decision, though, is that first-time entrepreneurs find it hard and unpleasant to call the attention of investors. Still, raising funds is a mandatory step to achieve success.
We recommend you not to desperately go after venture capitalists. At the beginning of their innovation journey, many entrepreneurs find out that their friends and family are a good source of capital. They will probably invest in the business as if it were their own project. It is also important to demonstrate how sure you are about your startup project by investing your own money, thus showing that you have high expectations.
Mentors and consultants are good sources as well. They can offer you valuable information to help you reduce the risks you are exposed to and give you their perspectives to effectively analyze them.
The entrepreneurship classrooms are often filled with experienced entrepreneurs, volunteer consultants, and business leaders. But remember that there are many entrepreneurs and mentors with new solutions outside the classrooms as well. Get in touch with those who can help you better understand and manage the risks.
Here at Innovation Hacking Lab, we have the pieces that will allow you to create and solve your own puzzle. From the design of a business model to the tests, from the creation of an innovation project to its validation and launching.
Dare to innovate. We are waiting for you.