Risk in Entrepreneurship
Tom Ashbrook, Founder, HomePortfolio, Inc.
Here's what it finally came down to in my case: about forty bucks left in the bank, a home leaning alarmingly toward repossession, enough credit-card debt to keep a wage-earner underwater for years, and a marriage hanging by a frazzled thread.
It doesn't have to get that bad. It really shouldn't. But it can, and does -- and far more often than the smiley-faced PR versions of entrepreneurial success would have you believe.
Entrepreneurship means risk. The risk of walking away from security and career path to create something new. The risk of taking yourself and your family into an unfamiliar storm of stress and uncertainty. The risk that you've miscalculated an opportunity, or your own internal resources as you plunge into a new venture.
To seriously consider taking the entrepreneurial leap already sets a person apart from the vast majority of men and women, who will never come close to actually leaving the world of wages. But even for the brave-of-heart, the reality of risk that comes with that leap -- when the last paycheck is left behind and life is reduced to a single do-or-die mission -- hits like ice water. It is the most naked moment in a working life. It can be a powerful energizer. It can also be overwhelming if you are not, at some level, prepared.
In my case, as in so many, the spur to take the leap was a new technology -- the Web -- that seemed to both threaten and potentially improve on my old business, newspaper publishing. In 1996, I left The Boston Globe and, with an old college buddy, launched HomePortfolio.com, a web service that helps consumers make choices about home design and helps manufacturers and retailers market to focused buyers.
On plastic and prayer, we built the first deep online database of Home-design products: windows, doors, lighting, flooring, cabinetry, appliances, furniture, etc. After almost losing our shirts getting started, we raised $72 million and made the site the national leader in its sector. Today, the site shows 250,000 products from almost 2,000 manufacturers, and has nearly 100,000 retailers in its network.
My founding partner and I left our operational roles in 2000, a year after our big-money backers brought in new management. My former partner is working on a new startup. I wrote a book about living through Internet mania and was pulled into radio broadcasting for National Public Radio after the Sept. 11th terrorist attacks. The story of the company we founded is still unfolding, but I'm extremely proud of the vision we brought to life, and do not regret the sacrifices we made to do that.
Here's my quick recipe for facing the storm of risk that accompanies launching a new venture:
First, assess your tolerance for risk before you dive in. Serious entrepreneurship is not blind adventuring. But even when you've done everything you can to minimize risk, it will still show up, alarmingly, at some point in your effort. Imagine how you are likely to respond. You may misjudge, but a tough exercise in self-awareness is good preparation.
Second, brace your home life. The pressures of a new venture are nearly impossible to compartmentalize. Despite your best efforts, they are almost certain to roll into your home, your family, your love life. Loved ones deserve a big heads-up, and your acknowledgement that to no small degree they are being drafted into your dream. Their support will be critical. Their alienation could cost you more than a new business.
Third, don't take the entrepreneurial leap simply for money. Of course, you want to be successful. But follow a real passion in your venture, whatever it may be. That passion will carry you through the days when risks and obstacles seem insurmountable. When the chips are down, your passion can be a great stabilizer, a powerful antidote to the inevitable emotional challenges of risk.
Finally, I tell my friends, only half-jokingly, try sky-diving first. If it's just adventure you want, that might get it out of your system. And it always comes with a parachute.