Over dinner tonight, I had a very interesting conversation. My guest was telling the story of a family that seemed to have the Midas touch – the parents had founded several companies. Of the three children, one was always at the top of her classes in the very best schools and became a very successful professional, one was an early employee at a hugely successful tech company, and the third founded a tech that was acquired, producing immediate wealth. We wondered – did these three siblings learn something while growing up as the children of successful entrepreneurial parents? Also, why did it turn out that the most successful student, who was certainly successful in a traditional way as a professional, was the least successful in terms of wealth generated?
Then it hit us – there were two things that had significant impact on those three people. First, they learned from their parents’ examples that success comes from hard work and taking risks. The oldest child (the great student and successful professional) was constantly working hard to achieve. She succeeded at everything in her life so when she built a thriving professional practice it was no surprise. But she had no reason to walk away from that success to try something riskier. Her siblings had less to lose by taking risks and were willing to do so.
Which brings up the second thing that we realized – someone from a wealthy family is free to take more risks. If the risk pays off, then the person wins big. But if the risk does not pay off, then the family is still wealthy. Someone who was not from a wealthy family might have shied away from joining a very risky young startup company, but the brother in this family was able to join the company because it seemed like an interesting thing to try – and it paid off big. The youngest sister founded a company because it looked like fun to her, and it paid off the biggest of all (since she was the majority stockholder of the company when it was acquired). If she had been worried about feeding her family, it would have been much more difficult to leave a paying job to found a startup.
The point is that entrepreneurship is built on a willingness to take risks. Different people have different tolerances for risk, but all of us can structure our lives to allow us to accept more risks if we want to do so.
If we want to be entrepreneurial, we need to take risks – and that may mean making the changes in the structure of our lives to all us to do so.