I try to read often. Lots of books.
I tend to go mostly toward biographies. Usually business biographies.
Right now I’m reading the autobiography of Dunkin’ Donuts founder, Bill Rosenberg.
In just about all of these stories there is a recurring theme: High Reward, Low Risk
I think it’s something that’s often misunderstood in the business world. Often, people think of entrepreneurs as bold risk takers.
Bill Rosenberg experienced some hardships in his life. As he aged, people would ask him how he was doing. He would try to respond:
Compared to what?
I like that approach. Both in life and in business.
Is it risky to start a business?
Compared to what?
The Story of Brooks & Dunn
In 1989, Clive Davis hired Tim Dubois to start the country music business for his Arista record label. Tim was a veteran in the industry and knew he needed a male singer, female singer and a band. He also thought he would do well with a duo especially after seeing the success the previous decade of The Judds.
Stories differ a bit, but Scott Hendricks, another successful country music executive and producer, suggested that Tim put together Kix Brooks and Ronnie Dunn. Both were talented artists and songwriters, but couldn’t get anything going with their solo careers. Both were nearing 40 years old and running out of time to break into the music industry as performers.
Tim listened. He liked it. He told the guys to meet and see if anything happened. According to Kix, the first time the two artist met to write they wrote the song, Brand New Man. The song turned out to be the first single released for the duo. It was a smash hit and set them out on one of the most successful country music careers of all time.
To Tim, the risk was very low. Have these guys meet. If they hate each other and sparks don’t fly, big deal. Don’t sign them. Even after he signed them. Put them in the Arista promotion machine. Probably spend around a million dollars seeing if people like it. If not, move on to the next act.
But the possible reward was huge. And that’s what it turned out to be.
What’s The Downside…
It’s easy to look at many things in life, personal and professional, and focus on the negatives. It’s easy to see why something might not work. But successful people seem to have the opposite view. They see things with little downside and potentially huge upside.
Even something simple as introducing yourself to another person. Worst case, you don’t click and you move on. Best case, they become friends for life or maybe even the love of your life.
In my book, you’d be foolish not to take that “risk”.
Final Thought
Are successful businesspeople bold risk takers?
Compared to what?
Usually, they look for high reward and low risk. This doesn’t mean that they blindly go into all kinds of deals that could lead to ruin. They make sure to avoid deals that could ruin them.
But they also realize that they don’t know what the future holds. So they often look for ways to test different things for a little money. With “little” being relative to their current standing. Then when they see something working they invest more. Usually they invest a lot more and go “all in”.
That’s a huge key for finding success in business.