Risky Business

Imagine you’re faced with two choices: Join a promising start-up, or continue to work for an organization? 

A tough call. 

Joining a promising start-up has huge upside potential, but how much risk are you willing to take? 

If you need to make a decision which involves risk, ask yourself the following question: “If things go pear-shaped, and the worst outcome imaginable happens, could I live with the consequences?”

If the answer is affirmative, and the potential upside is big enough, then go ahead and take the risk: You can always recover from failure.

If the answer is no, either don’t take the risk, or find ways to deal with the risk.

The first strategy to deal with a big risk is to make it smaller: For example, you could look for ways to start working on the start-up business in the evening hours, while at the same time continue to be employed.  

The second strategy is to transfer the big risk to someone else: This is the reason why we carry insurance.

Never take any risk from which you cannot recover: Playing Russian Roulette is always a bad idea, regardless of the riches you can earn if you survive.

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