Understanding business risk is not a guarantee you won’t fail. However, not understanding risk significantly increases the chances that it will consume your venture, taking with it your potential for benefit. In any work people take on for potential gain, there is inherently risk.
However, business risk operates the same way no matter what you do. While to some that may be frightening, to entrepreneurs it means risk can be, to a large extent, mastered.
An academic, entrepreneur, and engineer three-times over, Dr. Dan Rosen has spent a lot of time thinking about risk. In a keynote address at #FFCON19, he shared his insights on the timeless cycle of risk that applied as equally to explorers in the 16th century as it does to innovators today.
Choosing risk to get reward
“Risk is a choice, not a fate,” said Rosen, opening his talk. “Humans have been dealing with risk for millennia.”
He illustrated his example with a lesson explaining the origins of the word risk. In the Middle Ages, merchants regularly sought fortunes in far-off lands. While in today’s times we’d simply hop on a plane or take the train over, even short journeys back then could be treacherous. However, the potential danger didn’t stop explorers from seeking “untold riches”. Instead, they would manage what they could and accept the reality of their journey: they would either sink and die, or be successful.
Those journeys were known as “risicare”, an old Italian phrase meaning “to dare”.
The entire premise of the word “risk” comes from being daring and taking daring action for the potential of great reward. He recommended audience members read Against the Gods: The Remarkable Story of Risk to get more insight on the historical elements of risk, as his talk moved to the present day.