RISK…..How does this four digit word have influenced us in life? The word ‘risk’ shall appear distressing in whatever choice of decision making ranging from buying property, investment, business start-up, suppliers, vendors, customers to even marriage. It is common to associate risk negatively such as being irresponsible, rash, losses, damages or even threat. Definitely it is part of our life, business and work but yet we have seen that risk takers have succeeded despite against all odds. However it does not imply the same definition to true entrepreneurs. These true or successful entrepreneurs have seen risk as positive opportunities to excel and change the platform of their venture. Several entrepreneurs and innovators such as Robert Goddard, Soichiro Honda, Harland David Sanders, R.H Macy, Richard Branson, Donald Trump, Carlos Slim Helu, Martha Stewart, Emma Harrison, Linda Bennett and Bill Gates have undergone various risks before establishing their products and application in the world.
Entrepreneurs have the knack of getting right in spotting a new trend and acting in advance despite the risk involved. They are the first to gear into the business as they recognize the change in economy or cultural trend. Being the first in market gives them competitive edge compared to others who are known as mere followers. Orville and Wilbur Wright were the sole reason why we have airplane. Both brothers had risked their life, time, money and resources as they battled through depression, illness, mockery and failed prototypes to develop a plane that could get airborne and fly. Despite the risk involved, their success paved way for the modern transportation of the existing airlines.
Akio Morita the founder of Sony launched its first product, an automatic rice cooker but it failed to capitalize in the post war market. Less than 100 units were sold but did not dampen Akio Morita as he continued to work hard in other ventured business. His ventures are considered risky because Japan was recovering from the devastated war and there was clouded possibility on how Japanese products shall be received in worldwide market. His knew the risk involved but he was determined to prove his establishment with electronics product shall succeed. This was proven to be right as his later products such as transistor radio, magnetic tape recorder, TV, home video recorder, video tape and CD continued to cement his reputation as an entrepreneur who thinks ahead despite knowing the risks involved.
Even though Tony Fernandes had the passion to set up budget airlines, he was advised to purchase an existing airline. Imagine buying Air Asia, the heavily indebted subsidiary of DRB Hicom. Mortgaging his home and personal saving, Tony Fernandes took a huge risk to acquire the airlines with two ageing Boeing 737-300 jets and US$11 million worth of debts. Deep down, everyone felt that Tony Fernandes is making a wrong decision as airlines industry was facing bleak period after 11th September 2001 incident. Unperturbed he took the risk which served as opportunity because aircraft leasing fell 40% and airlines lay-offs enables experienced staffs were readily available. Offering reasonable pricing for cut rate air service was welcomed by travellers who believed it was a right move with the impending tight economy. Within a year, Air Asia had achieved breakeven point and cleared all its debts. By end of year 2004, its initial public offering was oversubscribed by 130 %. Whatever we may choose to say, but Tony Fernandes took the risk positively which is an essential skill for entrepreneurs to succeed.
However being the pioneer does not stop entrepreneurs from enlarging their business coast but shall always reinvent their products and services to places them on track with globalization demand. Failure to do so shall provide an opportunity for competitors to trot down the complacent entrepreneurs and prevail over them. Several organizations such as Kodak, Enron Bethlehem Steel, Commodore Computers and Pan Am Airlines has failed to monetize the necessary needs to its products and services and have been phased out from its industry.
True successful entrepreneurs shall never compromise such challenges as blind risk but undertake calculated risk that provides them strategic decision. Strategic decision includes conducting a detailed analysis on the benefits or worst possible consequences before deciding whether to accept the challenges. We cannot explain when will be the most perfect time to launch a business. Entrepreneurs that truly believe if their ideas have potential success, they shall never wait and launch it despite all the risks involved. Successful entrepreneurs have always come out from their comfort zone by taking challenges that may deemed impossible. The question poised here is “Are you willing to risk all you have that include money, relationship, resources, dignity, properties or even life to achieve the success? Surely the phrase ‘No Pain No Gain’ has its substantial meaning to be associated with all the entrepreneurs.