Entrepreneurs Are "Risk Aware"

When I relocated from Silicon Valley to the DC area in December 2001, I was thrust into a wild period of "culture shock," going from one extreme on the entrepreneurship scale almost to the other. The experience--coupled with my ongoing travels and work with entrepreneurs from around the world--has helped me appreciate more some of the intricacies of this unique but critical sliver of an economy's machinery. Most specifically, I have been intrigued by the gap between non-entrepreneurs' perception of entrepreneurs and the actual reality, especially on one critical point: risk.

The "conventional wisdom" -- at least outside the world of entrepreneurs -- is that entrepreneurs are "risk lovers" or at the very least have a high tolerance for risk. However, my own experience has been that almost every successful entrepreneur I have met is more concerned with managing, mitigating, or timing risk, and only embraces risk as an essential component of an ongoing "risk-reward" analysis.

Yes, entrepreneurs have the genetic make-up to work with risk on a daily basis--not everyone has the stomach for that in their own lives. However, to say that this translates into being a "risk lover" or taking crazy/unnecessary risks is a bit of a jump. Instead, I would propose that entrepreneurs are simply more "risk aware" than most non-entrepreneurs.

For more on this topic, check out this interesting discussion.