Not everyone is suited to take risks like an entrepreneur, but anyone can benefit from taking calculated risks. It’s worth noting though that many South Africans become situational risk takers and therefore entrepreneurs because of the high rate of unemployment and other social factors. However, Richard Branson is an entrepreneur by choice. He claims that he takes risks but he protects against the extreme downside. Branson says; if one does not take risks you are going to sit in mothballs and do nothing. Life’s a helluva lot more fun if you say yes rather than no. Over the years, my colleagues and I have developed quite a reputation for risk-taking. But while, to all appearances, we do have an unusually high tolerance for risk, our actions include the principle: Always protect the extreme downside. I think it should be a guideline for every entrepreneur — or anyone involved in business ventures.
When Branson made the bold move of expanding from the music industry to the airline business, he set himself one condition in the negotiations with Boeing, he stipulated that he wanted to be able to hand the plane back at the end of the first twelve months if customers didn’t like his business. If it didn’t work out, he did not want all his other business’ crashing down. He wanted his colleagues at Virgin Records to still have their jobs and a company to run. Branson concluded: So, if things don’t work out, don’t hesitate; take that escape hatch. That way, when all’s said and done, you will be able to gather your team, discuss what happened and then embark on your next venture together.”
Dan Osman took calculated risks
The late Dan Osman, took many calculated risks. He was an extreme sport practitioner and seemingly fearless. He broke world records in rock climbing without ropes or safety gear and in rope jumping. It was said of Dan Osman that he pushed the edges of life relative to extreme sports and in particular those that involved heights. Over time Osman had seemingly changed his fear reference point for heights. His death came as a result of a failure in his equipment rather than the risks he took. Miles Daisher, who was with Osman when he made his final jump, stated that the rope, which snapped in the fatal jump, had been exposed to inclement weather, including rain and snow, for more than a month before the fatal jump. Based on Daisher’s account one can relate to the importance of Richard Branson’s statement about protecting against the extreme down side when taking calculated risks. In this instance, without all the details of Osman fateful jump, one could conclude that if you are taking risks make sure your equipment won’t let you down and expose you to the extreme downside.