Fresh Start

Fresh Thinking

We spend our whole life trying to ensure security, but Entrepreneurial Innovation is all about risk!

October 26, 2008

Our Safety Net of Insurance

  • We spend our whole life trying to buy security from the unknown, to ensure KNOWN outcomes so that we are protected from everything that might be UNKNOWN…such as a death, a car accident, a fire.
  • We got life insurance, healthcare insurance, car insurance, disability insurance, homeowners insurance, personal property insurance, casualty insurance, state and federal unemployment insurance, income insurance via social security and retirement savings …the list goes on and these are just basic insurance types. You can see many more types here. Businesses have their own class of insurances and derivatives to ensure earnings.
  • Becuase of our interest in KNOWN outcomes, we spend a large amount of our income insuring ourselves and our businesses to reduce our risk. (My wife and I are fascinated at the cost to just live and breath with basic insurance, even if it is a very simple life) But it can feel very re-assuring to have insurance even though we all seem to pay an arm and leg for it. For those that worry, it helps them worry less.
  • For many of us, we work for big companies that provide us with a comfort of job insurance. The larger the company, often the more insured you might be from termination. And even if you do get the axe, you will likely end up with a very nice severance package.

The Rollercoaster Ride of Risk

  • Now lets examine entrepreneurial innovation. Entrepreneurial innovation is all about taking big risks! Big risks that can have completely UNKNOWN outcomes. What a radical opposite from all of the insurance that we surround ourselves with. Moreover, being an entrepreneur can also mean lower quality insurance plans. So, with our enormous interest in insurance, it seems counterintuitive to be an entrepreur and take on so much risk and forgoe so much security.
  • Ronald J. Baker, in his book Pricing on Purpose, sums it up well:
    “The history of business is the history of dreamers, and entrepreneurs, those rare individuals who cast aside the security of a paycheck, mortgage everything they have, and chase a dream that ends up creating our futures. The great economist Joseph Schumpeter referred to this process as the ‘perennial gale of creative destruction.’ The tempo of business is not one of stability, order, and a level playing field, but rather of disequilibrium and instability. Stability and equality only exist in the graveyards.

The Reality: it’s not for everyone

  • Entrepreneural innovation isn’t for everyone. A start-up is often a rollercoaster ride with highs and lows and unexpected drops. It takes quite a bit of energy and ethusiasm to bear the UNKNOWNS and quite a bit of committment and dedication to forgoe some of the insurances that come from working for a big company. Trying to create something new that no-one else has done before takes guts. And it gets more difficult the longer you wait…the spouse, kids, car, mortgage, savings, retirement exponentially contribute to tying you to a needed KNOWN paycheck.
  • That’s why one of the most common attributes in successful entrpreneurs is Enthusiasm among the UNKOWNS. They often have a well of hope and energy that helps push the team forward and forgoe things now in hope of better things to come.

The comfort of taking this risk

  • If you do decide to take the entrepreneur leap, take comfort in the fact that millions have gone before you. Every small to big business you see in your community started with some person in their “garage” following their vision who decided to step outside the comfort level of KNOWN outcomes and explore the UNKNOWN–trying to create something new that has value to others.


Let me know if you agree with my contrast between insurance and entrepreneurial innovation?

PS: Innovative idea for an insurance entrepreneur

Hey, maybe someone will be clever enough to come up with an entrepreneur insurance, where you pay a premium to insure yourself if you fail and ease up the ride while you search for someone else to pay for all of your good insurance. Good idea/bad idea?

Founder and CEO of Fresh Consulting, student of all things creative, innovative, and fresh, professional snowboard instructor trainer, father.

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