When starting out, no entrepreneur is certain of the future. Even becoming an entrepreneur in the first place is a risk. A staggering 50% of new start-ups fail within five years, and 8 out of 10 fail within the first year. Yet, for those who do make it through those crucial years, taking huge risk is sometimes key for development and growth. Fear of failure can become an obstacle for entrepreneurs.
Entrepreneur Richard Branson now supports risk takers with his not-for profit organisation Virgin Start Up. Here he relates to budding entrepreneurs starting a business with very little capital and encourages his philosophy of 'take risks, don't avoid them.' Branson himself has made many calculated risks throughout his career. This includes selling his original start-up Virgin Records to pursue his new venture Virgin Atlantic. It is this decision which enabled both companies to remain successful today.
Yet, Branson is not the only entrepreneur who has taken financial risks.
Founder of FedEx, Fred Smith, took a huge risk when faced with financial struggles early on. In this scenario however, the risk was less calculated. The company was down to its remaining $5,000, with many pending financial bills. Smith decided to take a gamble. He flew to Vegas and played Blackjack. Luckily enough, Smith walked out with $27,000. If it wasn’t for this decision, FedEx may not be the world class service it is today.
In other scenario's it can be the initial business plan that poses a potential huge risk. It’s hard to believe that organisations that seem so big to us now, were once a huge risk.
Ted Sarandos, chief content officer at Netflix took a huge risk with original series House of Cards. He released all 13 episodes at once and received a lot of criticism for this strategy. Sarandos supported his decision and argued that you reduce the risks of losing viewers week by week. The series was binge watched around the world and is in its sixth series of production. Netflix now boasts an array of original series including Narcos, Girl Boss and 13 Reasons Why (to name a few) all using the same strategy.
What huge risk would you take? Find out more about some the risks that companies took including Tesla, TOMS, and Dyson before becoming successful.
Infographic Via Forex Time