We spend our whole life trying to buy security from the unknown to ensure known outcomes so that we are protected from everything that might be unknown, such as a death, a car accident, or a fire.
We get life insurance, health insurance, car insurance, disability insurance, homeowners insurance, personal property insurance, casualty insurance, state and federal unemployment insurance, income insurance via social security, and retirement savings. The list goes on, and these are just basic insurance types. You can see many more types here. Businesses have their own class of insurances and derivatives to ensure earnings.
Because of our interest in known outcomes, we spend a large amount of our income insuring ourselves and our businesses to reduce our risk. My wife and I are fascinated by the cost to just live and breathe with basic insurance, even if it is a very simple life. But it can feel very reassuring to have insurance, even though we all seem to pay an arm and leg for it. For those that worry, it helps them worry less.
For many of us, we work for big companies that provide us with the comfort of job insurance. The larger the company, often the more insured you might be from termination. And even if you do get the axe, you will likely end up with a very nice severance package.
The Roller Coaster Ride of Unknown Outcomes
Now let’s examine entrepreneurism. Entrepreneurial innovation is all about taking big risks. Big risks can have completely unknown outcomes, which is radically opposite of how insurance works. Moreover, being an entrepreneur can also mean lower quality insurance plans. So, with our enormous interest in insurance, it seems counterintuitive to be an entrepreneur, taking on so much risk while forging so much security.
But Ronald J. Baker, in his book “Pricing On Purpose,” sums it up well.
“The history of business is the history of dreamers, and entrepreneurs, those rare individuals who cast aside the security of a paycheck, mortgage everything they have, and chase a dream that ends up creating our futures. The great economist Joseph Schumpeter referred to this process as the ‘perennial gale of creative destruction.’ The tempo of business is not one of stability, order, and a level playing field, but rather of disequilibrium and instability. Stability and equality only exist in the graveyards.”
The Reality: Entrepreneurship Isn’t for Everyone
Entrepreneurial innovation isn’t for everyone. A startup is often a roller coaster ride with highs and lows and unexpected drops. It takes quite a bit of energy and enthusiasm to bear the unknowns and quite a bit of commitment and dedication to forgo some of the insurances that come from working for a big company. Trying to create something new that no one else has done before takes guts. And it gets more difficult the longer you wait. The significant others, kids, car, mortgage, savings, and needed retirement money exponentially contribute to tying you to a known paycheck.
That’s why one of the most common attributes in successful entrepreneurs is enthusiasm for the unknowns. They often have a well of hope and energy that helps push the team forward and forgo things now in hope of better things to come.
And the Comfort of Getting on this Roller Coaster
If you do decide to take the entrepreneurial leap, take comfort in the fact that millions have come before you and gone for the ride. Every small to big business you see in your community started with some person in their garage following a vision who decided to step outside the comfort level of known outcomes and explore the unknown – trying to create something new that has value to others.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image Credit: CC by Jean-Etienne Minh-Duy Poirrier