The legendary business consultant Peter Drucker once said, “Whenever you see a successful business, someone once made a courageous decision.” These words hold true in this time and day as risk-taking and business success go hand in hand. Entrepreneur Erick Alvarez talks about the importance of taking calculated risks for entrepreneurial prosperity. Let’s delve.
Never undermine self-worth
Rome wasn’t built in a day, so was Dropbox. Co-founder Drew Houston should be thanked for taking some big but calculated risks. Erick describes, “Houston once turned up uninvited at the coveted startup accelerator YCombinator, and was spurned. Dejected Houston set off on a mission to suitably apply to YCombinator again and started Dropbox in 2007 after finding a co-founder. In just four years, his business grabbed the eyes of Apple’s Steve Jobs who personally expressed interest to Houston in taking over Dropbox. Houston, however, chose to stick with and build his company which is now valued at over $1 billion.”
Making every decision count
Emotions should not drive decisions. Erick explains, “Base your ideas on logic. Analyze every detail.” Erick advises entrepreneurs to break down their decision into smaller decisions. This takes away the burden of feeling overcome with each and every possibility. The smaller decisions are independent risks that pave the way for desired outcome. Erick emphasizes on assessing all possible options and zeroing in on the one that’s most efficient.
Getting help of a mentor
Erick encourages everyone to confide in a trusted advisor. He shares, “When you’re about to walk an uncharted terrain, it’s better to have a guide by your side who knows the terrain inside out.” A mentor helps to point out all the risks before they show up by throwing light on crucial analytical questions like below:
- If a transaction incurs loss or goes wrong, how will the business rebound?
- In case of partnership fallout, what course of action will the business take?
- If a project lags behind, how will the business keep up with the deadline?
A good mentor points out flaws in a business plan or process and gives realistic solutions drawing on years of experience, helping entrepreneurs take calculated risks to scale-up and build their businesses.
Trust your instincts
Erick firmly believes that entrepreneurs should have more faith in their intuition and trust their instincts when it comes to making difficult choices. Elaborating on his philosophy, Erick added, “My philosophy is just start and figure things out as you go. No business plan is needed. Fail fast and fail early. Learn from your mistakes and adapt. Leaders must be decisive. The cost of indecision is greater than the cost of the wrong decision.” Erick explained how business is an art rather than a science. Erick emphasized that it was his intuition that helped him make tough decisions, which ultimately paid off. While calculated risks are important, sometimes, it’s best to follow your entrepreneurial instinct.
Erick Alvarez is the CEO and founder of Big Clout Media that has been partnering with fitness influencers to create their own online successful fitness business. Given Erick’s experience and proven track record in building businesses, his advice is well worth considering.