Risk, unlearning and de-gearing

If you’re reading Anthill and not starting or running a business, maybe you ought to stop for a second and ask yourself why?

You’re obviously interested in entrepreneurship, marketing and ‘start-up’ business. You’re smart and capable, right? But you’re risk-averse. Well, we all are, to some extent. I am as much as anyone. But isn’t risk relative? Isn’t risk relative to what you have to lose? Maybe you should reconsider what you ‘could’ lose.

Are you risking:

Your health? Going hungry? Shelter? Access to medical services?

Your education? Income?

The fact that you’re reading this in a magazine you subscribe to or bought tells me it’s none of the above. Maybe you’re only risking status. Maybe you’re only risking title and conspicuous consumption.

So, what is your true assessment of the risk? Is starting your own business really that risky?

Many entrepreneurs start their careers working for big business. I did. There are many things you can learn from big business. Risk and risk avoidance is the first. The primary aim of most large businesses is risk avoidance and protection of a revenue stream that is existential. The truth is, anyone in any large company is simply a systems manager. And our job in a large company is to protect the system – the revenue providing system. So, in turn, they teach us from day one out of school to avoid risk.

Every start-up has gaps – gaps in strategy, gaps in the launch campaign and gaps in financing the venture. These are gaps that would usually be criticised in large conglomerate X during a ‘Critical Thinking’ session.

If you want to get your business off the ground you must unlearn some things – namely, risk assessment and critical thinking. What you need is complimentary thinking: pointing out the good and building on the parts that will work.

You need a form of thinking to build on what you have, not the type of thinking that leads to finding a reason not to do something. This is really one of the differences between being a marketer and being an entrepreneur.

The obvious counter-punch to the entrepreneurial assessment of risk above goes something like: “I have a family to feed and a mortgage to pay.”

It’s all a question of gearing. What’s your life geared towards? Maybe you have a large mortgage. Maybe you have an investment property. Maybe you take an annual overseas holiday. Maybe you have a car lease. I know you deserve nice things. I know you work hard. I know your job pays for all this. I know you deserve a reward.

What is the solution? De-gearing. You need to de-gear your life. You will never get off the treadmill unless you de-gear. Your lifestyle keeps you on the treadmill perpetually. What could you achieve if you didn’t have any debt? What if you didn’t have a mortgage? What if you sold your house, banked the net proceeds, quit your job and backed yourself to make something happen in 12 months? What if you used a portion of your money to feed, clothe and house yourself (and family) for a year? Then you focused all your energy on your start-up? What if money was not an issue and you worked on something you were passionate about for 12 months? What if you or your partner quit while the other worked?

This is not a fanciful “if”. Work out your net worth if you sold out all things that cost you money every week. What if you de-geared your life? What interest would the freed up assets generate for you on a weekly basis? $100, $200, $500? It really opens up some options. The mind boggles.

Worst case scenario, it doesn’t work. You go get a job, probably a better one with more pay. You learn more in 12 months than you would in 12 years. You have a great story to tell at any job interview. You’re seen as a pathfinder, a leader, courageous. The type of profile companies are searching for. You live the dream for at least 12 months (one percent of your life if you live to 100). You have a great pub story. Cool.

It’s really a choice. I can’t coin this any better than Tyler Durden from the movie Fight Club. “The things you own, end up owning you.”