It’s About Ambiguity Stupid, Not Risk

Pat It’s about ambiguity stupid, not risk. So says Jim Collins. (Except for the “stupid” part, he didn’t say that. Out loud, at least. heh)

In Inc. Magazine’s recent article “How to Thrive in 2009“, author Bo Burlingham interviews author Jim Collins for Inc. Magazine’s 30th anniversary issue.

Burlingham and Collins talk at length about entrepreneurship. One passage caught my eye. Burlingham asks him, “It has to do with your ability to handle risk, no?” To which Collins replies:

Not risk. Ambiguity. People confused the two. My students used to come to me at Stanford and say, “I’d really like to do something on my own, but I’m just not ready to take that much risk. So I took the job with IBM.” And I would say, “You’re not ready for risk? What’s the first thing you learn about investing? Never put all your eggs in one basket. You’ve just put all your eggs in one basket that is held by somebody else.” As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else’s company, you may not know those risks, and not because they don’t exist. You just can’t see them, and so you can’t manage them.

Too true, too true. Being an employee isn’t less risky (sometimes it’s moreso), it’s just a lot less ambiguous. And if you can’t take ambiguity, perhaps you shouldn’t consider being an entrepreneur.

Author: Mike Lee

An idealistic realist, humanistic technologist & constant student.

4 thoughts on “It’s About Ambiguity Stupid, Not Risk”

  1. I think it is about ambiguity AND risk. Someone who starts a company using his own capital is risking a lot more than earning a steady paycheck.

  2. @Buck: True, there certainly is some risk in being an entrepreneur. I think it may be relatively less than being an employee in some cases, but I don’t mean to imply that there is no risk.

    But I guess it all depends on the circumstance. I’m sure we could think of some instances where being an entrepreneur is a lot more risky than being an employee.

Leave a Reply

Your email address will not be published. Required fields are marked *