Startups Should Take More Risk?

Sarah thinks startups should take more risk: "they are supposed to be doing something that is risky, seems insane and can easily fail. If they aren’t, they’re probably not taking enough risk." 

This is a common myth and just about everyone, even the best in the business just accept it. But it is untrue. Startups should be figuring out ways to lower risk - and lower it dramatically. The problem is the equation that Sara (and just about everyone else) accepts without question: that risk = reward. She is encouraging startups to take more risk because this is the supposed way to create the next big thing. 

 

This myth is generally based on confusing risk with insight. What Sara should say is that startups should be doing something that is non-obvious because they have better insight into customer needs. Of course, doing this lowers the risk to the startup. Which is the real goal.

 

If you think you should be taking more risk, get out of your startup now. It will fail.