It is a commonly held belief that “entrepreneurs are risk-takers.”
Consider also the statement, “gamblers are risk-takers.”
Are entrepreneurs gamblers?
Or do you believe that: “Entrepreneurs calculate risk and pass it on to those who are greedy?”
Let’s research and share views on these statements.
Entrepreneurs are not gamblers, instead, entrepreneurs know when to take risks, whether to try again, or cut their losses and move on. An entrepreneurial-minded person will go one step further to evaluate whether there is an economic opportunity in that idea. An entrepreneur knows if he/she has to risk something in the process to determine if there is a market for that particular idea, whether it is for a product or a service. At the preliminary stage, the goal of an entrepreneur is not to bet the whole farm or risk everything on the idea. The goal should be to limit losses and maximise the human and financial capital utilisation so that the entrepreneur can recover quickly to fine-tune the idea or work on a new one.
One of the great misconceptions is that entrepreneurship is gambling.
Entrepreneur does not mean risk taker. Entrepreneur means calculated risk taker. There is a difference.
I thought this point need to be re-stated again.
http://www.fundinguniverse.com
Entrepreneur in English is a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome.[http://en.wikipedia.org/wiki/Entrepreneur]
By this definition, a lot more people are brought into the umbrella of the term Entrepreneur rather than JUST the successful ones that come to our mind. The pursuit of opportunity does involve risk if the stories of failed ventures are any indication.
Risk is a concept that denotes the precise probability of specific eventualities. [http://en.wikipedia.org/wiki/Risk]
This definition confirms the notion that YES entrepreneurs are indeed risk-takers but it is a carefully studied & analyzed one based on statistics and the science of probability. On the other hand, there are some entrepreneurs that ventured into successful businesses and endeavours just based on the uneducated drive/feel they had causing them to lunge head first into it without fully understanding the potential “risk” associated with it. And some, STILL go forward with it inspite of what then seemed like too risky a venture such as Richard Branson who became an entrepreneur in music, air travel, financial services, retail marketing, telecommunications, and other fields. In his case, the way he introduced a low-fare single leased airline Virgin-Atlantic for international flights when his business partners and advisors were against it, in spite of the ill feelings it developed with a lot of people, and successfully overcame the competition it ran against is a good example here.
It is true that entrepreneurs are risk takers, but they are taking a risk with a known action. A gambler could be described as a risk taker but do they really know what the ultimate outcome will be? Gambling in any part is taking a risk, although does a gambler really know what they are ultimately gambling for? For example an entrepreneurs understands where a need is and what must be performed to meet this need successfully. Compared to a gambler that may not know what the calculated risk of their gambles include.
Entrepreneurs analyze the risk they are taking; a gambler most likely does not know what kind risk they are taking. I do believe that an entrepreneur will scrutinize and review the risk they are taking and if they determine the risk out weighs the benefits a smart entrepreneur will move onto other opportunities.
A recent article posted in the MHT Journal of New England Technology discusses why an entrepreneur can be a risk taker and how they can be successful in the current economic market.
http://www.masshightech.com/stories/2008/11/03/weekly4-Risk-takers-can-flourish-in-this-economic-storm.html
Interesting comments, Brad … Risk is inherent in all actions – though the degree varies. Do gamblers not know they are gambling for money? In fact the “purpose” of many entrepreneurs and managers is simply making money. Such individuals are likely to have low Giver/Taker rations, and their actions are not purposeful. Purposeful actions, regardless of the archetype, are directed beyond “making money” and aimed at something that benefits others beyond self. PC
Entrepreneurs are risk takers and not gamblers. Entrepreneurs find a void in society that needs to be filled. Entrepreneurs must be extremely confident in their commitment to the vision because, they will assume risk. The have to take the risk of hard financial times without a pay check. The entrepreneur may dream big, but contrary to some perceptions, this individual isn’t a gambler. The entrepreneur usually knows the inner workings of a specific business in great detail and can see new opportunities that may not be visible to others. The entrepreneur is capable of balancing risk with responsibility and can get out and sell ideas as well as products or services1.
1. http://www.nfib.com/object/IO_19217.html
Good comments, Mark – but like the others, these are “safe” statements How about some “boldness” from all of you?. Have any of you considered the attributes: “adventurous spirits,” “courage,” “conviction,” “guts?” Was Christopher Columbus and entrepreneur? How about Marco Polo? PC
An entrepreneur is a person who has possession of an enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome. Entrepreneurs often have strong beliefs about a market opportunity and organize their resources effectively to accomplish an outcome that changes existing interactions. This explains that an entrepreneur is a calculated risk taker and not a gambler. Any decision making job involves some kind of risk. A successful entrepreneur is a person who evaluates risks and opportunities before taking an action.
source – http://en.wikipedia.org/wiki/Entrepreneur
Entrepreneurs are risk takers. For example, In the game cricket, there were 2 versions, 5 days and one day. The 5 day is the least viewed and one day is the most viewed. But to attract more people, 20-20 was introduced.This attracted families and brought in more entertainment. So more money made and also a successful idea. This is an idea by a true Entrepreneur. A risk of starting a format could have been a disaster as well. But it was worth the risk.
Gamblers take unplanned risks. They either end up losing lots of money or gain a lot. I agree with Joshua, that gamblers rely on pure luck to give them support.
After all been an Entrepreneur is also a part of running a business.
Sreesh, a couple of comments: to most readers understand “20-20″ to be perfect vision – if you mean something else by it, please explain. Do you know if the Entrepreneur, who introduced “20-20,” assumed personal risk? A project being risky is one matter, the individual or organization that assumes the risk is another…PC