Last weekend I watched the Hills Have Eyes 2 on DVD. Knowing my policy on horror movies (stay away from them), this was admittedly a poor choice. That night as I stared into the blackness of my dark room and I tried to fall asleep, all I could think about was the blood thirsty mutants. As I thought about this more, I realized there is a distinct link between my mutant fear in the dark and risk management in business and entrepreneurship.
Put simply, we fear the unknown. The darkness is scary because we can use our imagination to decide what might be there. An unknown represents a risk and this induces fear. When there is light, we have confidence because we can see exactly what is going on. Unfortunately, the business and especially entrepreneurial world is one giant dark room, filled with risks with unknown outcomes.
The key to mitigating risks (and allowing yourself to fall asleep and not get attacked by desert mutants) is two fold.
- Outline potential outcomes – if (A) happens, what is the worst result? How can I plan to make it better?
- Acquire more intelligence. Analyze data, look at past examples and trends. Shed some light on the darkness.
- Suck it up and move forward – entrepreneurship is a risky business.