When limiting your risk becomes a risk by itself.
We live in a society which doesn’t like risk so much. We are often reminded to be mindful of the risks we are taking and most laws and regulations intend to protect individuals from insecurity or hazards (think about speed limits on the road, FDA regulations, bank reserves, right to carry weapons, etc…).
This usually makes a lot of sense. As citizens, we often need to be guided through certain processes and leverage the experiences and knowledge of others (studies have shown that reducing speed limits has a strong correlation with the reduction of fatal accidents for example).
We are trained to view risk as something that constantly need to be minimized. Usually, we tend to focus on the objective at hand while thinking on how to reduce our overall exposure (don’t put all your eggs in one basket!). In many situations, this makes a lot of sense. But sometimes, it doesn’t.
When pursuing an idea or creating a company, trying to limit your risks can sometimes be counterproductive. Jack Welch, the famous and former CEO of GE, often advised to put significant resources behind an idea and try to stretch it as much as possible. Going halfway doesn’t lead you where you want to go.
Creating a project is hard, takes a lot of time and forces you to constantly adapt your plan. By trying to minimize your risks too much, you might not bet enough to give your idea the time and energy it really needs to blossom. Your commitment is also impacted as you don’t have so much to lose.
A great and simple analogy can be found in sport. When playing a tennis game, if you don’t take the risk to hit the ball with all the power you have but instead always try to be cautious in order to make sure the ball gets into the court, you will usually lose and won’t progress either. You need to go for it completely to have a chance.
Letting go in life, business and sport is often hard as we are wired to play safe. It’s true, you can miss or fail. But you can also win big by taking sufficient risks. Halfway? Not sure.