To Boulder and Beyond…

Another packed house today for Boulder Open Coffee Club at Atlas Purveyors in downtown Boulder. Events like this remind me why I’m psyched to be a (new) part of the Boulder startup community — lots of great, smart, and motivated people, trying to build things, thinking big picture, and supporting each other.

At least 1/3 of the event was spent talking about the economy, the recession, unemployment, education, and entrepreneurship. How do we teach more young people that they have options beyond just “getting a job”? How do we make education more effective for today’s high tech and fast-paced world? How do we improve the CU Computer Science program? Great conversations, and very motivating to be around folks like this.

Risk vs Uncertainty

A followup conversation to the above centered around risk — should we really be encouraging anyone to go the startup route since it’s so high risk?

On this one, my opinion is that many people confuse Risk and Uncertainty; and as it relates to entrepreneurship, there is an important distinction to be made.

Certainly starting a company can be high risk. These risks are compounded when:

• you don’t know/learn the mechanics of starting a company
• you don’t have a network of advisors, mentors, etc.
• you focus like a laser on one particular idea and ignore data that points you in a different direction
• you bet the farm (financially) on your first shot at things
• you only have one successful outcome in mind (IPO, say)

On the other hand, most of these risks can be minimized… if you approach things the right way (lean, market validation before hitting the gas, pivoting as you validate and tweak your idea/approach) then there is still a lot of uncertainty, but less actual risk.

In other words you can go from a 1-in-10-chance-of-success situation to one with much better odds, though (at the outset) very little clarity on what the resulting business will look like and where your path will lead.

If you’re willing to continuously learn, adjust, and strive, there is a very high likelihood that you will be successful, one way or another. High uncertainty (as to how, what, where), but reasonably low risk.

Here’s a silly metaphor: suppose you had to blindly pick one of 20 very different (but all promised to be tasty) cakes for your birthday. High uncertainty (of what kind of cake you will get) but low risk (you will get a tasty cake). Unless you believe that the only measure of success is landing the pumpkin-spice cake; in which case you have made the situation into a high risk one.

Now all that being said, many people can’t even handle low-risk high-uncertainty situations when it comes to Important Life Choices… those people are probably not meant to be entrepreneurs.