TheRedArchive

~ archived since 2018 ~

Being an entrepreneur is being a full time professional gambler

xsplat
April 9, 2016

Risk isn’t risk unless it’s risk.

When entrepreneurs advocate risk, it means something. They aren’t just being edgy.

Yes, keeping a nest egg is important. And yes, a nest egg can take many forms; at a certain level it is ones fame for being able to make money.

I have my own money that I don’t touch. I have redundancy. I won’t starve if some of my businesses fail. I have solid business plans that I’m confident about. But I’m still going all in, in that all my resources (not including an emergency nest egg) are directed towards business growth, and I have next to no cash flow buffer.

When planes were coming back from battle with bullet holes in certain parts, engineers first thought that those were the parts that needed reinforcing, because they could see that they were most vulnerable to and got hit with the most bullets.  Later they realized that it was the bullet holes NOT in the places they saw that crashed the planes.  This is called survivorship bias.  What survives does not directly point to what is failing.

But in business, we do study the commonalities of the successful.  Survivorship is exactly what a person needs to study, IF HE IS WILLING TO LOSE. It is not survivorship bias, if you are completely aware of and willing to accept real loss as part of the process of success

Risk is real. The fundamental value of risk is a common thread in the narrative of nearly every entrepreneur.

Real risk, by definition, means that many times the entrepreneur fails. Statistics show that failure can be expected 90% of the time.

As I’ve explained before, 90% is an acceptable failure rate. An entrepreneur can function and even thrive, EXPECTING that failure rate.

Survivorship is not about entrepreneurs who succeeded, vs those that failed and then went on to live ordinary lives, working for some other company, or scraping by in a modestly successful new venture. Survirvorship is about getting back on the horse.

A great many entrepreneurs went from rags to riches to rags to riches to rags to riches. It’s just part of the game. There is no failure in entrepreneurship. There is no survivor vs non survivor. There is only trying again. And again. And again.

I’ve seen the archetype of the rags to riches to rags entrepreneur on sit coms many times. Sometimes he is portrayed as fundamentally a loser. A loser because he is at heart a gambler. A genius gambler.

Well, yes. That’s what entrepreneurialism is. It’s being a genius full time professional gambler. You know the odds, and you expect to lose, but you know that often enough you’ll win. It’s a discipline of risk.

Taking risks means being willing to lose 90% of the time, and to keep trying again. And again.

And then AFTER succeeding, to risk again. Rinse and repeat.

entrepreurialism

This image is not complete.  There is no final win.  After the win comes the next series of fails, then another win, and so on.

Transcript of this 10 second clip with Elon Musk:

My proceeds from Paypal after tax were about 180 million dollars. One hundred of that went into SpaceX, 70 went into Tesla, and 10 into went into Solar City. And I literaly had to borrow money for my rent.



Eventually there are multiple businesses, with many failing, and the ones that succeed acting as venture capital for new ventures.

Venture capitalists also expect failure from most of their investments.  As do movie studios.  As do publishing houses.  As do drug companies.

It’s the blockbusters that fund the “failures”.  Failure is not failure.  It is just the cost of doing business.  It is factored right in to the model of success.

No producer ever expects any particular movie to lose money.  And yet the movie business model is that most movies will lose money.  No editor expects any one book to lose money,  but they all expect most books to lose money.  Entrepreneurs are always confident that each attempt will be a success.  And yet it’s not a contradiction that he knows that overall, most investments will not be successful.

You can call the blockbusters luck, but it’s not like stumbling on money in the street.  It’s luck in the same way an oil company striking oil is luck.  Eighty percent of the time, even after careful surveys, they strike nothing.  An actor or  musician might become an overnight sensation, after decades of grinding away at honing their talent, and constantly exposing themselves to lucky breaks.  If you read Steve Martins autobiography, you can’t call his grind and rise to the top luck.  He kept honing his craft, while creating chance after chance for himself.  Roll the dice often enough and you’ll roll four sixes.  Was the big roll lucky?

Most stories told by the very successful are stories of long hours and big risks.  But it’s not black and white.

My cousin adheres to the rule that he must take 3 months holiday every year. He insists that it increases his productivity.  He is a multi millionaire with tens of thousands of staff earning him money.

There have been many productivity studies that show that after a certain number of hours worked, productivity does not increase.

And yet the bulk of success stories are from men who don’t fit into the middle ground of the productivity bell curve. The most successful are either innately able to work more productive hours than other people, or they learn how to.

Entrepreneurs hone their skills while increasing their financial momentum, and are always poised to seize the moment.  There are plenty of lucky moments to seize.  Being an entrepreneur is being in the business of spotting luck – of spotting opportunity.  Opportunity is an unlimited resource.  I have noticed more opportunities than I could ever develop.

Spotting great opportunities is a skill that can be learned, and so is executing them.  As the skills grows, so too does the financial momentum that allows action.

Nothing stands still in business.  Innovate or die.  Recreate yourself or die.  Diversify or die.

And no amount of money is ever enough.  There is no such thing as a financial goal.  Even owning all of time and space would not do it, because there would still be inventions to discover and create within that time and space.  There is no such thing as retirement, just as there is no such thing as not being turned on by young women.  As long as a man is breathing, he wants to fuck hot girls, and earn more money.  Procreate, gain power, and make a mark.

As failing or going out of style is the expected outcome of most entrepreneurial activity, the most useful skill a budding entrepreneur can have is to limit expenses.  If you can live on next to nothing, you can more easily survive while you continue to fail.

If an entrepreneur puts in the hours, and can live cheaply when the chips are down, and continues to work full time on his businesses, success is only a matter of time.  That time might be measured in decades.  It does not matter.  An entrepreneur KNOWS that success is only a matter of time.  He is not guessing.  He is not hopeful.  He KNOWS it.

He can be penniless at 40 and KNOW that his decades of entrepreneurial efforts are worth more than a lifetime of scrupulous retirement savings.  What is 1/2 million in savings, compared to the certainty of an eventual larger annual income?

And why settle for mediocrity?

“Success is the ability to go from failure to failure without losing your enthusiasm.” – Sir Winston Churchill

TheRedArchive is an archive of Red Pill content, including various subreddits and blogs. This post has been archived from the blog Random Xpat Rantings.

Random Xpat Rantings archive

Download the post

Want to save the post for offline use on your device? Choose one of the download options below:

Post Information
Red Pill terms in post
You can kill a man, but you can't kill an idea.

© TheRedArchive 2024. All rights reserved.
created by /u/dream-hunter