Trevor Noah once said you only know you’re growing if you cringe at the things you used to say. Well, I certainly cringe when I think of some of the things I’ve said in the past — especially when thinking of advice I’ve given about taking risks and following your passion.
“Jump off the cliff and build wings on the way down.” What a load of crap. Luckily I’ve seen the light.
Let’s deal with the concept of risk first: Only suckers and scions take unmitigated risk. If you’re a sucker, sorry for you. If you’re a scion (rich parents, rich spouse), well done for winning the lottery and having a safety net. But most people don’t have a safety net, which means most people need to plan very carefully to mitigate their risks when embarking on an entrepreneurial journey.
Remember Warren Buffett’s golden rules: Rule 1: Never lose money. Rule 2: Never forget rule number 1.
Hedge Your Bets
Before starting a business, make sure you have a deal in place that covers your downside. Now that sounds a tad difficult. How on earth are you supposed to ensure that when you flip a coin, heads: you win, tails: someone else loses?
No one said being an entrepreneur is easy. True, magic only happens when you’ve mastered the art of creative thinking. Of innovating. Of deal-making. Of ensuring you have a safety net before you take the plunge. An entrepreneur figures out a way to mitigate his downside, so even if the upside doesn’t materialise, he isn’t left as a red splat on the pavement.
Next time someone tells you to risk everything, add him to the list of people to ignore.
Solve A Problem
Now for the subject of ‘following your passion’. Don’t do it. Take coffee for example. Lots of people have a passion for coffee. Does that mean you should start a roastery? Or open a coffee shop? No. That way lies poverty.
An entrepreneur doesn’t follow her passion. She finds a problem that people are willing to pay her to solve. Then she solves it. With very few exceptions, the process of solving the problem will not instil deep joy and happiness. It will not be a passionate affair. That’s why no one has solved the problem yet…
Do you see? Money-making opportunities mostly lie in the opposite direction of your passion.
Find Your Mojo
By all means, chase your passion, but not for profit. Not only do you risk spoiling your love affair, but you will probably fail.
If you want to make money (and use that money to chase your passion), chase something that no one else wants to chase. Neither risk mitigation nor problem solving are fun or easy or nice. They require hard work, concentration and pain.
Most of the time, the only reason people are willing to do what it takes to be an entrepreneur is that they can’t get a job. If you are eminently employable, you will be employed. The path of a start-up entails too much hassle.
Luckily, the good news for us unemployable folk is that while our road won’t be littered with roses, at least we won’t be hooked to the most dangerous addiction in the world: A salary.
Becoming addicted to a monthly pay cheque will lead you down a road that makes you a docile, defenceless, plump sheep. There’s nothing wrong with being a sheep, provided you have a nice safe paddock.
You don’t want to be 55 and suddenly kicked out of the paddock, losing the intravenous drip that is your salary, and left to fight it out on your own in the wild. Rather take the plunge early. Position yourself by creating a safety net, de-risk your start-up.
You may not find a pot of gold in your first decade, but you’ll learn a treasure of skills that will stand you in good stead. Life is long. Take some risk, and love what you do. But don’t go all in, and don’t follow your passion. That way lies failure.