The definition of risk is to expose to danger, harm, or loss.
Our brains do a pretty good job of keeping us safe when it comes to taking risk. That’s part of the job. Sometimes, that factory in our head fails us and we take dumb risks.
I had my fair share of bad decisions growing up.
I remember riding my bike around our neighborhood. There were some huge hills that were tough to climb, but fun to ride down.
I was riding down one, going as fast as possible. When I reached the bottom of the hill I had to turn. I went right and at the same time hit a small patch of gravel.
My back wheel slid out from under me and I proceeded to sweep the ground with my body. When I got up, both arms and legs were bleeding and I was in a ton of pain. I left my bike and started to walk home in tears.
That was a dumb risk to take and from that point I took every hill and corner a little slower.
Over time I matured. The risks I took were more about my future than physical harm.
My time on the bike, and dealing with other risks growing up, helped me think through the decisions in front of me. Risks are all about what can go wrong.
Said another way, risks are about fear. Fear of the unknown, fear of failure, fear of making a mistake, fear of rejection or fear of loss all prevent us from taking a risk.
But here’s the thing I’ve come to realize. These fears are all things that could happen. They are not a foregone conclusion. Our minds are creative and they can go too far when it comes to imagining downsides.
I also found that this problem gets worse with time. As time goes on we have more to lose and it keeps us from taking risks.
I never want to put myself in a position to lose it all, but at the same time, if I don’t take risks, I won’t have much to gain.
Looking back, I can see that I took some good risks.
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I applied and got into a college that would put me in debt for 10 years after I graduated.
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I left home to go this college. It was a new city and I didn’t know a soul.
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I said hello to a beautiful woman late one night in downtown Nashville (talk about a good choice!)
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I accepted my first job after college and moved to another new city, on my own, even further from friends and family.
These may not seem like risky decisions but there was some risk in all them. I had much tougher choice back in 2009.
I was working at a great software start-up and things were going terrific. It was clear then that we were on a path to go public. If we did, it would mean a nice bonus and a lot of financial security.
Then a friend approached me about a new position with a brand new company. In reality, it wasn’t much of a company at that point. There was no real product, no customers and no money coming in.
They offered me a big job running marketing. That was the good part. The bad part was that I would get paid less, work more and leave a lot of money on the table from my last job. To make matters worse, success was anything but guaranteed.
This was a big decision. To work through it, I started talking with people I trusted to get their feedback and guidance. Those that were risk-averse told me the same thing, “I’d be crazy to leave.” Those that saw an opportunity in risk, helped paint a picture why it would pay off.
In this situation, and others like it, the negatives are easy to see. I made a list of every one of them. With that done I moved to the positives.
I saw a few things about this opportunity.
First, I would have a front row seat in building a venture-backed startup. I believed that this experience was invaluable and that I could build on it in the future.
Second, I was hedging my bets. While everything looked great at my old company, you never know. One might take off and be worth a lot of money or it may crash and burn. At least this way, I had two bets on the table, not one.
Third, I saw an opportunity to expand my network. I’ve always placed a lot of value in this and I believed that the people I’d meet would change my life.
Fourth, I was investing in myself. I’ve always tried to keep a growth mindset. After doing the same thing over and over, I get an urge to try something new. That urge is about learning and growing, not doing something different.
After months of debate with myself, I took the job. I was at the company for four years. This is how it turned out:
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Within 6 months they made me the CEO.
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Within 2 years we had huge customers and a great team.
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Around that time, I raised $10M to fuel the business.
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6 months later I had to lay off 20% of the company.
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I developed relationships with huge partners, like LinkedIn.
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3.5 years in I tried to find a buyer for the company.
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4 years later I resigned and never made a dime on my equity.
You might be thinking, that this was a failure or at least a poor decision. In my mind, it was neither. Every reason I laid out to take the job in the first place came true.
I learned more in this four years than I have at any time. I always tell people that I got an MBA during these four years. Usually, these degrees cost $200K or more. I got mine for free.
By not letting the fear of the downside control my decision, I was able to consider the upside.
Part of the confidence of my decision came from a confidence in myself. I had no experience being a software executive, but I believed my past experience would make me successful.
When I see risks and I know that I control a part of the outcome, I’m more confident. Why? Because, I can reduce my risk by working harder, doing more or staying the course.
For me, all the successes or great things in my life started with a risk.
I’ll sum it up with the words of Jimmy Carter, “Go out on a limb. That’s where the fruit is.”
This post is part of a series of letters to my kids. My goal is to reflect on and capture as many life lessons as possible. Here is the current list I am working from.
