Risk, Reward, and Being Wrong Yet Again

Last week, in another class, we started a short unit on social entrepreneurship.  As part of the lecture, our professor had us all take a short test to gauge whether we were suited to be entrepreneurs.  Now that I’ve had almost an entire semester of learning about entrepreneurship, both by reading and discussing the theory and by actually starting something, I was pretty sure I knew what sort of questions would be on this quiz, and what my results would be.  To revisit one of my former blog posts, I am now very used to being wrong.

We have been focusing on starting something from nothing, using the lean launchpad and putting together a minimum viable product.  This quiz, based on a tool used by Northwestern Mutual to evaluate loans for new ventures, and this lecture were much more firmly in the standard entrepreneurial world where you need a bunch of start up capital before you do anything.

Some of the questions were about your personality, basic behaviors and preferences both in childhood and now (Were you always a good student, do you like to work in groups).  Some were about finance, are you willing to ask your friends and family for money?  Are you willing to ask other people for money?  And one series of questions that set another student on his ear: questions about being adventurous or risk adverse.  Surprisingly, the answer that got you points toward an entrepreneurial personality was being risk adverse.  The other student, who has launched a nonprofit that operates in Tanzania, felt strongly that entrepreneurs are comfortable with risk, they just go in with their eyes wide open knowing they may fail.  This mirrors some of the theory we have learned, especially in our Effectual Entrepreneurship text.  I agree with my classmate.  Entrepreneurship is about awareness of risk, deciding that the risk is worth the potential reward.  We work to minimize the risk in a number of ways, including the process of “getting out of the building” and making sure our product was actually something people want, and would pay money for.  We decide how much of our own, or other people’s, money we are willing to risk, to lose, before giving up.  We do things in small parts, so we can make changes and pivot as things work or don’t work or become something new entirely.  We keep our eyes wide open, open to change, to opportunity, to failure, and to risk.

I ended up being one of four people in a 25ish person class that scored as an entrepreneur.  I would never have used that word to describe myself before SAM, and still use the term uncertainly.  I feel like I am a better manager than entrepreneur, but that a good manager has a bit of an entrepreneurial mindset.  We always need to keep our eyes open, and be willing to change things that aren’t working.  This class, this process, have taught me how to do that.

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