The ability to take calculated risks is one of the most critical skills required to build a highly successful career. However, there is a common misconception that holds people back.
It's not risk-taking that matters — it's the mindset to put yourself in situations where the risks aren't very risky but the upside is phenomenal. A breakdown of how Mark Zuckerberg's 'wild risk' was actually a series of micro risks.
The ability to take calculated risks is one of the most important skills you can develop for a successful career. But a common misconception holds people back: that risk-taking means jumping off a cliff and not looking back.
Some people do take extraordinary risks, leverage their lives, and “put it all on black” hoping to win. But the people who are consistently successful over time tend to operate differently.
They exhibit three patterns.
First, they work hard to build a solid base case. No matter what happens, the “failure scenario” is acceptable (and usually better than average). It may not be the desired outcome, but it isn’t personally or professionally disastrous.
Second, they work their tails off to create opportunities with increasingly large upsides—while preserving that acceptable fallback.
Third, they take lots of micro risks over time. None of these mini-decisions are high risk or extraordinarily difficult, but together they compound into a completely different league.
Let’s look at an example.
Mark Zuckerberg (temporarily putting aside complaints about his style, Facebook’s latest stock price, etc.) is one of the most successful technologists and business people of the last decade. To achieve that success, he had to take a wild risk—dropping out of school to start Facebook. Damn good thing it worked, or he would have been screwed, right?
Not exactly.
Mark didn’t take one giant risk. He started by building a website in his spare time (low risk—maybe a couple fewer beers and half a letter grade in a class). Then he incrementally went deeper: devoting more time, getting others involved, pulling together scrappy funding to pay for servers. Each step was a micro risk with a perfectly acceptable fallback.
Then he moved to Silicon Valley for the summer. He didn’t drop out of school. He didn’t dive into an unknown project. He took something that was already working and devoted a summer to scaling it.
At the end of the summer he had real traction, a clear view of the opportunity, an experienced partner (Sean Parker), and a chance to raise $500K from Peter Thiel and Reid Hoffman. Only then did he make a very calculated decision to take a leave of absence and continue working on Facebook.
He worked his tail off to create an upside that drastically outweighed the downside. The worst case was a delay in graduating from Harvard (he could always go back), plus experience that would make him more employable than his classmates even if Facebook failed. He could pay himself a salary from the initial funding, save on tuition, and chase the phenomenal upside in front of him—all while preserving his ability to get a job (the point of going to Harvard in the first place).
From that vantage point, the “risk” wasn’t a coin flip. It was close to a no-brainer.
Working your butt off to create the opportunity—that’s what separates the doers from the dreamers.
Mark is clearly an outlier in natural talent, relentless execution, and luck. Luck matters in the magnitude of outcomes. Still, people who become wildly successful tend to put themselves in situations where they’re going to move forward no matter what. The only question is when—and how big.
They do it by taking constant micro risks and working diligently to create opportunities that other people don’t have. Anybody can bet on black and get lucky. But consistent success comes from stacking the deck so that, no matter what happens, you’re guaranteed to make progress.
From the outside, it looks like luck and risk-taking. But behind the scenes, there are rarely overnight successes.
Risk-taking isn’t the point. The point is the mindset: put yourself in situations where the “risks” aren’t very risky—but the upside is phenomenal.
If you want to make a change in your career, take a micro risk today. Devote 20 minutes and a little planning to whatever you want to pursue. Do that for three weeks straight and you’ll be amazed how far you can get—without risking much of anything.
Too many people point to the “high risks” of ventures, career changes, and big moves as an excuse to make no progress. Get rid of that excuse. Take tiny steps and tiny risks, and over time you’ll create opportunities where you can chase upside without jumping off a cliff.
If you think your situation is different and you can’t make incremental progress toward your goal without jumping off a cliff, email me with a description. I bet I can find a lightweight, low-risk way for you to start moving in the right direction.
Further reading: The Startup of You by Reid Hoffman.
One email a week. No fluff, just lessons from the field.
