Tag: Risk

Risks and Rewards

As the saying goes, you’ve got to enter the lion’s den to get the lion. No pain no gain.

Taking risks is not something for everyone. After all, we have all the safety measures built-in to our system: from seat-belts to “frisk-machines”.

Yet, in business as in life, risk is part of life, just like death itself.

Risk is associated with fear. When consumer’s sentiment is said to be “healthy”, it means people are more willing to borrow and invest. In short, to spend.

When it is low, it means greed is suppressed by fear.

Spint has just completed its purchase of Clearwire.

It has been a long ordeal.

Back in 1999-2000, these enormous acquisitions would involve much more risks, yet much less time.

(Ebert, number 4 Worldcom purchased number 2 MCI by stocks).

It was a wild ride.

Then the dot.com burst.

The key here is spectrum.

We move very fast on the ground (wireline) and in the air (wireless).

ICT on steroid.

With strong appetite for risks, which requires strong stomach as well.

No risks, no rewards.

In Asia, we got Singapore, India which showed strong leaderships, capable of risk-taking (social engineering and IT, respectively).

Before 1997 Asian crisis, these countries were looked upon as Miracles.

Leadership is lonely at the top.

Unintended consequences and the urge to take the path of least resistance will undo any bold moves.

If a leader has chosen all the safe paths since college (taking courses that would ensure an A, and a career that was well paid with least sacrifice), then the result would be leadership who is risk-advert.

Play politics.

Becoming all things to all men.

Catering to the whim and wishes of the majority to win votes.

That’s their rewards: popularity and being well-liked.

But risk takers have a different play book. Not foolish risk, but calculated one.

Gut-checking. With a lump in the throat. Screw it, let’s do it.

Those who take risks also face fear just like anyone else.

But went ahead and made the call anyway.

It’s called judgment and maturity.

It’s called, for the lack of a better word, Execute.

And it’s an art, with lots of practice and pain-taking efforts.

Not without consequences, among which unpopularity.

No risks, no progress (think of the Challenger).

Think of Marconi and his wintry towers.

Think of all-solar crosscountry flight (Amelia Earhart would be proud).

Think of Hoover Dam.

And millions of inventors and risk-takers who lost their shirts. And in the case of the owner of Segway, his life.

No risks, no rewards.

Taking chances

Peter’s Principle states that line managers are often promoted “beyond their level of competency”.

In other words, a technical guy, best at his job, ends up being the boss who has to crawl his way through business dilemma and personnel issues.

In life, however, some problems cannot be solved at the same level where they had first occurred. Bully problems at school, for instance, need intervention. Or as recently as this morning, Sandusky‘s sin exposed and dealt with in public.

It’s a call to take chances, to take risks if we were to make any progress.

This Recession has drawn out both the best and the worst in us.

Some of us rose to the occasion. Diversify ourselves. Or take the high road (going after our passion or non-profit work).

Others just checked out. Drifted.

I have met a bunch of expats who kept staying in-country indefinitely.

Extended vacation.

Or permanent student.

Profitable venues i.e. financial and housing sectors are hitting bottom.

We are left with the “sure things”: food, clothing and shelter (renting).

Even families once so close now seem so far. Recession pull them apart, that was.

My friend reminded me how long it took Japan to get through its V-shaped recovery. 18 years.

Ouch! I will be dead by then.

Still there are things that need risks: crossing the street, eating one more bite of that greasy foods or banking on the elusive thing called love.

Friends went into fields which are quite different from their academic and career backgrounds. That’s risk-taking.

I spotted excitement and adrenaline.

For VC‘s, they need to hit 20% of the time, to cover the other 80% failures.

Still it’s worth it.

Still taking that chance.

Still go for it. Or else it wouldn’t be solving the problem at a higher level.

Because after all, many of those problems cannot be solved if left where it started.

But beware of over-promotion (beyond one’s level of competency). Peter’s Principle.

Inertia and urge

In business parlance, we call them “entrenchment” and “creative destruction”. Find a niche, dig in. By the time you crossed “valley of death”, someone had already elbowed in to eat your lunch.

As Venture Capitalists scour the globe looking for “the” deal, they find new energy and risk-taking in places like Rwanda, Indonesia and Israel, the new “BRICS“. Emerged out of the ash of the Great Recession, these countries offer a unique proposition: invest in us for we got talent, nerve and market.

Since history can only be understood backward and not forward (a need for spices and to dispel “Earth-is-square” theory drove Columbus to stumble upon America), we can’t manufacture another version of post WWII American Dream. Whatever shape it will take, post-recession wise, one will likely find “gems” in the most unlikely places (GE and MSN in India, or “frankenfish” farmed in China bio-lab).

After reading Sarah Lacy‘s book about start-ups in emerging countries (Brilliant, Crazy, Cocky), I felt as if “Independence Day” were celebrated else where, and not in the US.

Web eco-sphere and capital flow (as in the case of hyper-Brazil) are tilted to smaller countries: lower barriers to entry, greater access to broadband and micro-funding.

To jump-start a project, one needs more than an urge to get rich. In most cases illustrated in the book, it has a cause or personal narrative to underline the efforts. Innovator’s dilemma implies a balancing act between preserving the status quo and feeding the creative urge.

If not, someone else will and will do you in.

It’s called Progress. It’s called evolution. Climbing the pyramid of need and innovation. Unplug the respirator and move into the “incubator”. I have lived on both sides of the world, one more risk-taking, and the other,  safety. It’s as if we have reached a plateau in “subduing the Earth”. Columbus, welcome to America, now go home. Take another lesson in adventure and entrepreneurship elsewhere. Maybe we haven’t failed enough. But it’s time to finish the race. Inertia and urge. Let the urge overtake the inertia.