A risk-based approach to entrepreneurship education
Taking the plunge as an entrepreneur is an exciting and scary step. A world of potential opens up, though the road to fulfilling that potential is full of unexpected turns, corners, obstacles and potholes.
The risks associated with entrepreneurship are vast and plenty, stopping many from going down the path and making others choose an early exit.
Could a risk-based approach to entrepreneurship education provide a solution?
Focusing on risk in trying to encourage entrepreneurship may sound contradictory.
Why focus on risks when you can focus on rewards?
Why focus on the negative when you can focus on the positive?
The answer: because the “perhaps–less-likely-entrepreneurs” may not be as comfortable with risk and require a higher level of assurance.
1. Reducing absolute risk:
The most obvious and immediate risk in entrepreneurship is the investment of both time and/or money. The “what if?” question can be a real head scratcher for budding entrepreneurs: what if I invest my time or my money and I fail?
A risk-based approach would consider two angles:
- How do we minimise time and/or money invested (not by elimination but through replacement)?
The current business landscape has a wide range of national, regional and local grants available, whether as financial grants or in the form of business support. Similarly, finding a co-founder has never been easier, with a plethora of websites dedicated to this specific need. - How do we value the time and/or money invested?
The time or money invested in going through an entrepreneurship curriculum or starting a new venture is never wasted as long as the individual recognises the value of their newly acquired skills and knowledge, understands how it applies to other professional settings and how it enriches their CV. Perhaps one of the most often forgotten elements of entrepreneurship education is its applicability beyond entrepreneurship itself.
2. Reducing comparative risk:
Is the battle worth the spoils? Is the risk worth the potential reward? Most people are unlikely to risk £1,000 on the flip of a coin if the potential reward is also £1,000, however, the higher the potential reward is in comparison to the risk, the more likely we are to engage. In other words: if the risk of entrepreneurship cannot be lowered, can we increase its potential reward or its guarantee of success? What if we were allowed to flip the coin twice or the potential reward was £5,000?
Well-known tools and techniques like the Business Model Canvas and the Value Proposition Canvas are extremely valuable tools beyond their ability to summarise vital information onto one page. In a world where 7 out of 10 new products fail, the risk of creating a product or service that lacks desirability goes down significantly when we take patiently and consciously go through these kinds of steps.
Creating a realistic, but ambitious vision in combination with setting a strong strategy to get there, are often underrated skills when the attention is on the flashy new product or service. The journey of 1,000 miles starts with one step and yet a lot of entrepreneurs are either so fixated on their next step that they forget about their big dream and lose motivation or are so excited about their big vision that they skip past vital foundational steps. An ambitious vision will increase our potential reward, while a considered strategy can give us a few more flips of the coin.
A risk-based approach to entrepreneurship education would look at the current curriculum from the perspective of reducing risk and creating assurance. It can embrace the learners’ apprehension and caution around entrepreneurship and take a step-by-step journey to –hopefully– reach a point of confidence as opposed to starting from it.
Finally, I want to leave you with this:
In a world that’s changing so quickly, the biggest risk you can take is not taking any risk.
– Peter Thiel (co-founder of PayPal) famously gave Mark Zuckerberg this following advice in 2004
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