Sitemaps
How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table

The Utter STUPIDITY of "Risking it All"

Wil Schroter

The Utter STUPIDITY of "Risking it All"

Everyone loves to glamorize the Founder who risked it all — until they are the Founder who lost it all.

Recently I was watching the History Channel series "The Toys that Made Us" with my kids, where they documented the inventors of toys from Barbie Dolls to Trivial Pursuit. Within the documentary are conveniently scripted scenes where actors dramatize key moments where the Founders "risked everything" to bet on their big dream, which of course, went on to become a huge hit.

When my daughter turned to me and asked if that's what it's really like - to risk everything to become successful — I turned to her and said, "Yes, if you're lazy." I said "lazy" because I didn't want to say "stupid" but when she's an adult, I'll be sure to add that part in as well! But regardless, I wanted her to know that anyone can take a risk — smart entrepreneurs do it with an even better backup plan attached.

Taking Lazy Risks

When I hear about Founders taking a risk, I always ask about their backup plan. Sadly, I rarely hear about one. Personally, I find that approach to be lazy at best and irresponsible at worst. Our jobs as Founders, and really as the ultimate strategists, are to not only make big bets but also build strategies around multiple outcomes and, if we're doing our jobs right, a plan to survive bad bets.

In 2015, we purchased a company called Zirtual.com, a virtual assistant business with over 450 full-time employees that was due to go out of business within hours in a forced shutdown. We purchased the business, practically sight unseen, in just a few hours and with no advance warning. That was a huge risk, but the plan I was working on when I made the offer wasn't about the upside; it was all about the downside.

We focused exclusively on the downside risks — everyone quitting, clients jumping ship, and some major legal issues we weren't aware of. That allowed us to calibrate all of our efforts to playing defense in order to be around long enough to go on the offense and scale that business. That backup plan is what kept us around long enough to come back and build a great company in Zirtual.

Risk Enough, but with a Backup Plan

The key to risk is NOT risking everything because risking everything implies that we have nothing left if things go south. Think of it like being at the Blackjack table. If we bet everything and lose, we can never get back in the game. But if we bet half of everything and lose, we still have enough chips on the table to be around long enough to get it back.

That's what this startup game is all about — being around long enough to ride out the bad bets until the good bets start to land. Where we make our mistakes is thinking that this is an "all or nothing" business, which makes for a great movie, but not such a great reality TV show.

There are all kinds of ways to "keep some chips on the table," from staying at our current job longer to hiring the next person as a contractor before they are full-time. Statistically, we're going to make way more bad bets than good ones, so we've got to have enough self-awareness to protect ourselves from the inevitable bad bets we're going to make.

Bet on Success, but Plan for Failure

In the history of startups, I've never heard of a company that went bankrupt because its bets just paid off so well. Every time I've had a big bet that paid off, it was always easy to plan around that. We may have to hire a ton of people, find additional office space, or borrow some capital - but all of that is incredibly achievable when things are going well. The worst thing that could happen is that we don't grow as fast as the opportunity provides.

But damn — the other side of that? The part where the bet blows up and we're trying to lay off people, negotiate out of our office lease, and beg for bailouts — now that's what I'm worried about having a plan for. Those are the things that matter.

"Planning for Failure" isn’t an admission of a bad bet — it's the foundation of being able to make a good bet. We can and should take real risks, but do so with the understanding that if those risks fail, it doesn't stop us. It might slow us down, but it keeps us in the game and fighting until it's time to push some chips back in again.

Oh, and remember — they only make movies about the Founders who risked it all and won. The real stories tend to be the opposite of that!

Don’t miss out on free credits from Google Cloud for Startups! It’s your chance to leverage powerful cloud solutions without the initial cost. Click here to get started and propel your startup forward.

In Case You Missed It

All Founders Make Bad Decisions — and That's OK (podcast) Bad decisions are inevitable, so make sure to learn from each one. With that, let's talk about how to use passion to pursue a business, why founder burnout is common, and why identifying your theme is vital before starting a business.

We Get Paid For Finishes, Not Starts As Founders, it's important for us to remember that nothing matters until the end goal is reached.

F*ck Big Announcements — Small Victories Drive Startups If you’re waiting for home runs all day — you’re going to be waiting a long time. That’s not how this game is played. It’s a daily struggle, but in the end, it’s how big victories are won.

Find this article helpful?

This is just a small sample! Register to unlock our in-depth courses, hundreds of video courses, and a library of playbooks and articles to grow your startup fast. Let us Let us show you!

Submission confirms agreement to our Terms of Service and Privacy Policy.

Already a member? Login

No comments yet.

Register to join the discussion.

Already a member? Login

Create Free Account