For the next 7 weeks I will explore the book It’s a Jungle in There: Inspiring Lessons, Hard-Won Insights, and Other Acts of Entrepreneurial Daring by Steven Schussler, the founder of the Rainforest Cafe. This week’s reflection will focus on the role of risk-taking.
I agree with Schussler’s assessment that risk-taking is an essential component for entrepreneurial success. It is a hard fact to accept that as many as 9 out of 10 startups will fail (Patel, 2015). This means that when you launch a new venture you have to believe that your idea is so strong that it will beat the odds and/or be comfortable with the strong possibility that you may experience several failures before you find success.
I think this is the primary reason that so many people with wonderful business or product ideas remain on the sidelines of the entrepreneurship game. The life and family responsibilities that so many of us shoulder make the risk of losing everything too great. The allure of a consistent paycheck and a comfortable life for ourselves and our families makes a corporate job a desirable choice.
Schussler himself failed at his first solo effort, a retail store selling restored nostalgia items called Juke Box Saturday Night. He lost his home, his company truck was repossessed, and he ended up living in a 9×12 foot office above a nightclub. Foreclosure and bankruptcy did not deter him, as he was able to take the failure of his first business and turned it into a chain of very successful nostalgia themed restaurants.
It is easy to see why those that are more risk averse might be drawn to the “side business” or “side hustle” approach. In these cases, the entrepreneur keeps his or her day job (and steady income) and builds the new business after work and on the weekends. Hull (2014) points out that there are two schools of thought on this. Some believe that to be successful you have to quit your job and put everything you have into your business. Others believe that you can start your business on the side and grow it slowly until it generates enough money that you can leave your full-time job.
For me, it is comforting to know that there are businesses that have been launched on the side and grown to profitability. As someone who is slightly more risk averse, it is hard for me to imagine quitting my job to start a new business even though this means that my business will have to grow more slowly. The trade-offs (for me) are just too great.
Hull, P. (2014). Tips to starting a business on the side.
Patel, N. (2015). 90% of startups fail: Here’s what you need to know about the 10 percent.