Most entrepreneurs would say that say that risk-taking is synonymous with entrepreneurship. Even the odds themselves aren’t great for aspiring entrepreneurs. Statistics from the Global Entrepreneurship monitor have revealed that 582 million individuals in this world are in the process of starting up or running their own company. Yet, a staggering 50% of new start-ups fail within five years, and 8 out of 10 fail within the first year.
However, reluctance to take risks can also reduce a company’s possibilities of progressing. Serial entrepreneur Richard Branson even encourages aspiring entrepreneurs to “take risks, don’t avoid them” and supports them through his not-for-profit organisation Virgin Start-up.
The Chief Content Officer of Netflix- Ted Sarandos, took a risk with releasing the Netflix original series House of Cards. Sarandos chose to go against the usual protocol of releasing a series (week by week) and released the entire series in one go. Industry leaders suspected the series to flop due to the lack of weekly anticipation from viewers. However, the series was a hit and viewers binge-watched the entire series, sparking conversations all over social media. The series has since been nominated for multiple awards and has won several Golden Globes and Emmys throughout its six seasons.
Entrepreneurs often encounter financial strains in the first few years which force them to take financial risks. Take the multinational courier service- FedEx for example. The company faced significant financial struggles early on and business only had $5,000 remaining. So, Fred Smith, the founder, literally gambled it. Luck was in his favour that day, as Smith walked out with $27,000. FedEx now operates in over 200 countries and have celebrated hitting 50 billion in 2016.
You could say that the above business decisions are the difference between becoming a multinational organisation or a failed start-up statistic. Even the stories behind some of today’s biggest brands include difficult, high-risk decisions; whether these are financial risks, personal risks, or high-pressure business deals.
Here at FXTM we have looked into some of the biggest business risks famous entrepreneurs such as Elon Musk, Tim Westegren and more have taken during their careers.