Your Boss is Ready to Fail, Are You? Assess Your Startup Risk Tolerance

Startup Risk Profile

Do you have the right risk profile for a startup?

The odds of a new business succeeding are about the same as those of a new marriage—not great. But like newlyweds, entrepreneurs aren’t deterred by the likelihood of failure.

In their minds, the risks associated with a startup are far outweighed by the rewards. Are they for you?

Fear Itself

For Jason Jacobs, founder of RunKeeper (one of my fav apps, if you must know) becoming an entrepreneur was the dream, not the specific company he founded.

When asked in an interview with Mixergy.com if he feared failure, he responded, “If I fail gloriously and this goes nowhere, I’ll be a failed entrepreneur. But at least I’ll be an entrepreneur.”

Startup Risk Assessment Question 1:

Ask yourself this—if your job, and paycheck, went away tomorrow would you think, “at least I tried?”


Failing Forward

In a SmartBrief on Entrepreneurs survey, 65 percent of entrepreneurs said they’ve failed at one or more startup. Almost 8 percent said they’d launched three to five failed startups. And in the ultimate “try, try again” example, nearly one percent said they’d failed six or more times. Ouch.

Yet most entrepreneurs don’t bemoan these defeats. Failures are viewed as such a right of passage that serial entrepreneur Steve Blank suggests entrepreneurs shouldn’t approach investors until they have a minimum of three failed business cycles under their belt.

He also defines a startup as “a temporary organization used to search for a scalable and repeatable business model.”

Startup Risk Assessment Question 2:

Ask yourself this—if you took a job at a startup, could you view it as a temporary position and move on to the next without regret?


Startup failure

Don't stop thinking about tomorrow. Did Fleetwood Mac know something about startups?

Misery Loves (a Startup) Company

There’s so much failing going on among startups that there’s an entire conference dedicated to it. Failcon (yes, that’s really the name) is an annual conference where entrepreneurs gather to discuss, you guessed it, failing. The goal of Failcon is to learn from each other’s mistakes and share some of your own.

Do you know any other area of life where failure is so accepted? So talked about? So celebrated?

Startup Risk Assessment Question 3:

Ask yourself this—would you consider a failed startup a success for your career?


Your entrepreneur boss is ready to fail. Are you?

If you hesitated, on any of the questions, even for an infinitesimal fraction of a nanosecond, you need to turn around and bolt. Run straight towards that corporate job.

Yes, you may be bored from time to time. No, there won’t be any hope of gloriously, ridiculously large payouts from equity stakes in the company. But you know what there will be? For you, at least. Sanity. You won’t find nonna that here.

If you answered yes to all three; a resounding, unquestionable, unshakeable hells-to-the-yes, you just might have the right fail tolerance and the right risk profile to work for a startup. Strap on your crash helmet and give it a shot.

Just don’t come crying to me if it all goes to hell in an infinitesimal fraction of a nanosecond. You’ve been warned, my friend.

[Photo credit: Watz via Flickr]

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6 Comments

  • Bryce Christiansen

    Reply Reply August 25, 2011

    Wow, great questions. I’ve worked for a startup and currently work for a small business, and those questions have all crossed by mind.

    Interestingly, I responded favorably to each of your questions. I enjoy being able to make a major difference in my work. That’s something that can be overlooked in bigger companies.

    You did it again. Looking forward to your next article.

    Bryce

    • Kathy Ver Eecke

      Reply Reply August 25, 2011

      Thanks Bryce!

      It’s a really good sign that you didn’t flinch for any of the questions. I know lot’s of people who would read just the first and think “what are you crazy?” Definitely not the right personality for a startup.

      You are 100% right about the making a difference part, and how that’s not always an opportunity in a big company. I worked the bulk of my career in startups, and one year (okay, 11 months) for a Fortune 100 company. It was shocking to me how unfulfilling the big company was. Great company, great people, really great perks, but knowing that what I did day to day wouldn’t make a dent in the bottom line made me crazy. The job felt like busy work. Of course all the people doing the ‘busy work’ together do affect the company, but I was used to making an impact on my own. I couldn’t take it.

      New post coming later today (or tomorrow..waiting on a quote) about 2 people who had polar opposite experiences interning with startups.

      Thanks for the comment Bryce.
      Kathy

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