Why Fortune Favors The Bold
It has been increasingly apparent that courage is the main quality one needs to start a business. Millions of people dream of starting a business, but relatively few actually do it. Incredibly, the most educated and brilliant are often the most fearful of taking the plunge. Perhaps fear of failure is most acute in those who have never or rarely failed.
Looking at the business legends of today, you will see that almost all of them have demonstrated courage to defy the odds and pursue their dreams. Bill Gates, Steve Jobs, and, much recently, Facebook Founder Mark Zuckerberg all dropped out of college to establish world leading corporations. They know well enough the difficulties they would face if their venture failed.
I would not recommend that anyone drop college to start a business. It appears reckless to me not to have a fallback position in case things do not work out. What worked for geniuses is unlikely to be repeated by people of above-average talents. Even in the case of the college dropouts I mentioned, there were extraordinary circumstances that prompted them to leave school. They must have pondered what would happen to their lives if they fail, but perhaps the opportunity was too big for them to pass up.
Why do so many people think going into business is a great choice, but still refuse to become entrepreneurs?
It could be the fear of losing their golden handcuffs—the cash and other benefits that come with employment. After all, most believe in the saying that a bird in hand is better than two in the bush. People prefer a sure thing, even if the potential gain in the other option is much larger. There is that feeling of security in receiving a paycheck twice a month. While the risk of a large corporation failing is generally less than the rate for start-ups, it still happens and in a more frequent pace than you will be comfortable with. Moreover, you have almost no control to prevent or minimize this from happening. A reorganization or merger may leave your position redundant even when you have no shortcoming.
The second, of course, is the fear of failure. Frightening statistics about the low rate of success in new businesses are often mentioned by pessimists to dissuade people from going into entrepreneurship. The truth is not as depressing as it seems. Many of those who started went about it the wrong way. Just because a business closes down, it cannot be concluded that it was due to losses. Also, keep in mind that while losses are limited, potential gains cannot be measured. For example, four businesses worth an average of P500,000 capitalization each can lose only a total of P2 million. This is easily offset by even a modestly successful business that can earn far more during the total time of its operations.
But what is truly the right course of action? Distilling all that I have observed and read about those who dared to start a business, it is my carefully considered belief that, indeed, fortune favors the bold. Most of the fears rarely come about or can be overcome one way or the other.
One of the most often cited fearsome statistic is that only one in five newly started businesses will last five years. In the first place, this does not apply to all industries. Usually, this is in a field where there are numerous and intense competition and where there are virtually no barriers to entry. This also does not include franchises as these have a much higher success rate. But more importantly, a lot of these businesses are fatally flawed from the very beginning with problems in their business model or fundamental errors in their operations. By choosing a venture where there is less competition and with an excellent business model, you do not have to think that you are likely to fail by your fifth year.
Being bold does not mean being reckless. You take calculated risks that you believe will be beneficial in the long run. There is a huge difference between being bold and being reckless. Reckless means being too lazy or stingy to study the business carefully before investing one’s hard earned capital. It is essentially the same as gambling, and the results are usually the same.
Most of the things that people fear rarely happen and if they do happen, the consequences are rarely as devastating as they anticipate. Still, most people will prefer to play it safe. By default, only those who are brave can reap the rewards that fortune is likely to give.
*Originally published by the Manila Bulletin. D-4, Sunday, September 29, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.