Do Entrepreneurs Hate Risk as Much as Professors?

risky ride | BIGG SuccessWe saw a great article over at Business Week by G. Michael Maddock and Raphael Louis Viton, respectively the CEO and President of Maddock Douglas.

They note a new phenomenon:

Large companies are hiring professors to teach them how to innovate.

The authors assert that it’s misguided:

“What big, process-driven companies need is to learn how to think like entrepreneurs. And it may surprise you that entrepreneurs hate risk, too. Unlike many professors, entrepreneurs feel comfortable not knowing what comes next, but they don’t see this as risk.”

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George KruegerI feel stuck between two worlds – I’ve taught entrepreneurship at our local University for years and I’ve been an entrepreneur even longer.

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Mary-Lynn FosterYou have the heart of an entrepreneur, though, George. It’s definitely where your passion lies.

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According to the authors, entrepreneurs mitigate risk by:

This is great advice for those of you thinking about starting your own business. Contrary to popular myth, successful entrepreneurs are not risk lovers. However, they are excellent risk managers.

They think differently. In business school, we learn that you have to take larger risks to earn a greater return.

Entrepreneurs know this isn’t necessarily the case. They focus on making the downside acceptable and let the upside take care of itself.

Do you have an idea for a business? Could you use some help reducing the risk? Check out our coaching packages.

Image in this post from mzacha

2 replies
  1. Catherine Morgan
    Catherine Morgan says:

    OK, too many good points here. In some ways entrepreneurs dislike risk more than corporate because a mistake reflects directly on the cash available to them personally. What I think is thought of as “risk” may be low-cost testing as you suggest.

    Here are some kind of funny/sad facts for you. 1. A client of mine is in one of the top business schools in the country but she comes to me for tools for very small biz saying that her school doesn’t provide them (and she asked!) 2. One of my local colleges has what seems like a nice course for entrepreneurs but it is taught by someone with a full-time job. Huh?

    Professors should stick to teaching theory and let those of us in the trenches teach the nuts and bolts. Love what you guys provide. Huge value for entrepreneurs.

    Reply
    • George & Mary-Lynn
      George & Mary-Lynn says:

      Thanks Catherine. Your two points absolutely highlight a problem in many business programs – there’s an obsession with venture capital-backed companies at the expense of 99% of the rest of small businesses.

      Reply

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