The Reluctant Entrepreneur: Turning Dreams into Profits

THE REALITY OF CALCULATED RISK

Take Bill Gates. Legend has it that when the entrepreneurial bug bit, he dropped out of Harvard to start Microsoft. A serious gamble.

But, as Rick Smith tells us in The Leap, Gates didn’t drop out at all. He took an approved leave of absence. Then he relied on his parents’ financial support while he developed his programming skills and made contacts. If it hadn’t worked out, Smith argues, Gates would have gone back to Harvard, finished his degree, and made a good living as a corporate executive.

Gates had his family behind him. He also had a Plan B. He was not then, nor is he now, a person who takes extreme risks.

Another example is Ben and Jerry. Contrary to popular belief, their entire startup was driven by risk avoidance.

Their initial idea was to get into the bagel business. But when they realized how expensive the equipment would be, they looked for something else. Turns out, it was cheap to make ice cream. So they rented a vacant Vermont gas station and started to sell fresh, handmade ice cream to the locals and tourists.

At first, they barely covered their costs. But they knew they had a really good product. And by putting in lots of hard work, they gained ground. After two years, they began to sell their ice cream to local eateries. And it was only after those first wholesale efforts paid off that they thought about expanding beyond their backyard. They went statewide and then national.

Then there’s Wayne Huizenga. He started Waste Manage­ment ...