Anything we do in life has a level of risk, it is knowing when to take a risk and when not too. The challenge is to avoid the bad risks, while actively seeking and managing the smart risks.
Here is a collection of smart risks for start-up businesses:
- Focus on a tough customer problem rather than a fun technology.
- Schedule frequent updates to your solution to maintain growth
- Plan to deliver a family of products, rather than a one-trick pony.
- Implement a modern real business model. Providing everything free, and growing users to the max for years, like Twitter TWTR -0.23% and Facebook, is a high-risk approach requiring deep pockets.
- Find a strategic partner to accelerate growth.
- Use metrics to measure results of marketing initiatives.
- Recruit the best team members and provide incentives.
- Build your business with minimum outside funding. Strategically, you need a plan to survive through organic growth, with outside funding to effectively accelerate scaling.
- Don’t rely on conservative forecasts to reduce risk
- Be a leader rather than following in the footsteps of another.
An age-old measure of start-up health is how much time top executives spend on containing bad risks, versus proactively exploring new risk opportunities. If the majority of your time is in recovery mode, your whole start up is likely a bad risk.