Radical Risk Taking: Entrepreneurship Myth

Today’s African society is filled with the romantic notion of seemingly successful entrepreneurs who have gone all out and risked everything to start their business venture and succeeded at it.

Stories of school drop outs, guys who quit well paying jobs is the narrative being shared around as the only way to successful entrepreneurship.  This narrative is slowly being embedded in our society to the extent that many feel that entrepreneurship is genetic and that people who succeed on this front are cut from a different cloth.

This in my opinion couldn’t be more further from the truth and I reckon that you don’t have to quit your day job to be a successful entrepreneur. American musician John Legend even after launching his first album in 2000 didn’t quit management consultancy until 2002 is just one of many examples.

To be a successful entrepreneur especially in Africa one must shift their approach from the rosy and romanticized view to what fund managers terms as portfolio approach to investment.

The principle behind portfolio is to strike a balance or manage risk by investing in both high risk; high return asset and low risk; low return assets as well.

The same approach should be taken by would be entrepreneurs in the sense that one can take risk by starting up a business but at the same time offset the general risk by being cautious in other areas. For example in a family set up; the wife can plunge into fulltime entrepreneurship on one hand while the husband retains his day job as a risk mitigation measure or one can invest their savings to a venture they believe in while retain their stable salary to offset the risk of business failure.

The biggest question that we still grapple with in this approach is  a full time job will be a distraction to your business performing at its best due to lack of your constant presence. Further common sense dictates that innovative and creative achievements can only take place if focused continuous energy and time is dedicated.

The above assumption overlooks the unassuming benefit of a balanced portfolio that offers the entrepreneur peace of mind. The portfolio approach gives an entrepreneur a sense of security on one hand while at the same time giving a sense of freedom to be innovative and creative on the other.

The best entrepreneurs are not risk maximizers as portrayed by society but those who take risk in one area while at the same time taking caution on another.