A perspective on risk

As an entrepreneur, I'm regularly asked, "Why are you so tolerant of risk?"

I am not, actually. I'm pretty risk-averse. It's just that I look at risk very differently from most.

The traditional way to measure risk is against something that is somewhat fungible — money. Opportunity cost in dollars and cents is what most people think about when they say this startup or that business is risky. When a fresh graduate tells her parent about wanting to join a startup, more often than not the parent's response is: "That's too risky" — probably meaning that her income over the next few years is likely going to be lower than if she goes to work at a regular job.

But is there something else we should be optimizing for when we talk about risk? Something that's far more precious than money?

What about time? What about optimizing for the richness of experience you gain with the time you have to spend? The hundred thousand dollars that you didn't make last year, you could make in a year's time if you put your heart to it. However, the year that's just gone by .... is gone. It was what it was, you cannot optimize it after the fact.

This concept is not new. Seneca talked about this in ancient times. He encouraged his audience to stop performing meaningless activities.*

Life is long enough, and a sufficiently generous amount has been given to us for the highest achievements if it were all well invested. But when it is wasted in heedless luxury and spent on no good activity, we are forced at last by death's final constraint to realize that it has passed away before we knew it was passing.

What I loathe to risk is the quality of time I have to spend. I try to make sure that this very moment, the seconds and minutes I spend is optimized for a life that is meaningful. Startups are, to me, some of the more meaningful endeavors that human beings could embark upon. You build relationships with your teammates that last a lifetime. You push yourself to the limits of your experience, intellect, and capabilities. Your products and services make a difference to your customers, and perhaps the world — maybe that's how you make your dent in the universe. You learn and grow. You become a better leader.... and indeed, should you choose to be open enough, a better person. .... And maybe, you also make more money than you know what to do with!

I'm not tolerant of risk. To me, building startups are about the lowest risk activity I can choose to engage in with my time.

So, would you rather take on a predictable job, with a predictable income?.... Or would you prefer to do a startup, and stretch yourself to the limits, and probably not even make as much money in the process? Which is the riskier choice?

You tell me — what is your perspective on risk?


* Thanks to a special friend in Jakarta who introduced me to Seneca.... Yes, my education has been way too technically focused.

Image by Andy Slot CC BY