There is a lot to unpack in the idea that people get utility out of risk itself. Personally I think many of them get utility out of things which can be sensibly extricated from risk. A lot of folks relish the social aspect of working in a startup (us versus the world, shared triumph over aversely, counterculture as the norm, etc): I think you can replicate that without 90% of them failing. (I hold other heresies such as that you can replicate it without 90 hour work weeks, too - the ninety hour workweek is the talking parrot, which doesn't really do anything for us but we know that it isn't a <i>proper</i> pirate ship without a parrot, and we cling to this even when it bites our fingers and defecates on our pirate boots.)
> <i>They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure.</i><p>Completely flawed. Every sane person seeks to reduce risk. What entrepreneurs also seek is to <i>maximize gains</i>. Increased risk is merely often required to do so.
A fun read, but basically another "entrepreneurs are superheroes" article.<p>It seems unlikely that anyone would get utility out of risk itself, independently of the reward. But many people, given the choice of two scenarios with equal risk/reward ratios, tend to choose the scenario with the higher risk numerator. "Bet big or go home".
Wow, excellent article from Arrington.<p>I like the analogy, and I can relate to the attraction of spending your life "at sea". The prospect of striking gold is not what attracted me to work for myself, it is the lifestyle.<p>The unknown nature of startup life is also attractive. At my previous job I knew I would be at my desk every day doing the same thing - now I have no idea where I will be or what exactly I will be doing from week to week, and that is very appealing to me.<p>And risk/reward? Who cares, just enjoy the adventure!
Great article, and definitely a feel-good for people who are starting their own businesses!<p>However, I wonder if all entrepreneurs are like he describes. In fact his description is almost at odds with what Zuckerberg said at Startup School, about simply building things because you like building things.<p>I think at the end of the day there's many motivations for doing something as bold as building a company, and everybody has a different mix of those motivations.
<i>I don’t care if you’re a billionaire. If you haven’t started a company, really gambled your resume and your money and maybe even your marriage to just go crazy and try something on your own, you’re no pirate and you aren’t in the club.</i><p>I do appreciate the risks pirates take, this however, does not devalue the role of a peasant or a cobbler or a prime minister or a soldier to the society. Its narrow minded to establish one work to be <i>better</i> than the other.<p>Be pirate, if you think, you are best suited for it. There is NO shame in doing something else, for which you are better suited either.
"It's better to be a pirate than join the navy"<p><a href="http://www.folklore.org/StoryView.py?story=Pirate_Flag.txt" rel="nofollow">http://www.folklore.org/StoryView.py?story=Pirate_Flag.txt</a>
This is what differentiates Arrington (and a rare few others) from a lot of other experts/bloggers - he is writing from the trenches, from the bottom of his heart/gut and from experience.<p>There are a lot of bloggers and self-proclaimed experts who are posers.<p>(Disclaimer: former tc employee)
For fools rush in where angels fear to tread. -- Alexander Pope<p>I've come to believe that people who create startups must be, by definition, entirely unqualified for the job. If they were truly qualified they would have some idea of what they were getting themselves into and they would avoid it. Hence, only unqualified people embark on the adventure.<p>There is, however, an up-side to being unqualified:<p>The young do not know enough to be prudent, and therefore they attempt the impossible, and achieve it, generation after generation. -- Pearl S. Buck<p>The young and foolish change the world.
I completed a survey on entrepreneurship the other day for a local college kid's project. There was a multiple-choice question asking why I became an entrepreneur. The options were things like "being my own boss", "working from a preferred location", and "making more money".<p>I had to choose "other" and write in "I can't not do this."<p>It is an almost uncontrollable urge. I think it could be safe to say that kind of compulsion limits my ability to do a really good risk assessment. So far it works for me though :)
Might help to break down the concept of "risk" in this context:<p>- Part A: Seeing a distant island full of fruit and thinking "Wow, I'm totally going there - screw everyone else who's just eating potatoes around here."<p>- Part B: Choosing to make a boat rather than jumping straight in the sea and risking drowning or death by shark.<p>So the goal itself is risky and/or unknown, but it doesn't mean you have to do stupid or excessively risky things to get there.<p>There's a lot of overlap between scouting/explorer/pirate behaviour and entrepreneurship - certainly for me. The very same thing that keeps me going as an entrepreneur sees me exploring/climbing and hiking in dangerous but beautiful places. It's an odd personality trait, but one that's evolutionarily advantageous (now the islanders have all the fruit they need) :)
I see it a bit differently.<p>For me, the risk-taking comes partly from a confidence (that could sometimes be characterized as over-optimism) and partly from the feeling that my gains from the risk are worth it.<p>I like adventure, but I don't fall into the category of "They don’t need to be rewarded for risk, because they actually get utility out of risk itself." people.<p>Taking a risk (e.g. quitting my (Principal Dev manager) job at Microsoft and creating a startup) is rewarding in itself (regardless of how well the company does financially). However, for me, the primary reward is not the risk. The reward is what I get from taking the risk (e.g. work on more interesting stuff)
Ok all, we're going to settle this once and for all. I'll work with my prof (behavioral economics) tomorrow to set up a risk profile questionnaire (like an advanced Ask HN) and we'll know by Tuesday how well this claim holds up, empirically. (edit: unless we're comfortable making claims about risk preference WITHOUT data...)<p>edit 2: these are specialized, refined tests that construct risk preference from a number of decisions from hypothetical situations. Assessing risk preference is <i>not</i> a simple manner of direct question (ex: "Hi, are you risk tolerant or risk averse?") or introspection.
<i>> Most people have an aversion to risk, my college economics professor told me. Which means they have to be rewarded to take on that risk. The higher the risk, the higher the possible payout has to be for people to jump.</i><p>Here's a followup question your freshman econ professor would have asked:<p><i>> Should we create incentives to reward entrepreneurs for their risk aversion? Or should we leave it exclusively up to the free markets to offer the reward?</i><p>In other words, if an idea fails should society step in and help the entrepreneur out (thus creating an incentive for him to further innovate)?
While I like the entrepreneur-as-a-pirate-rebel sentiment it's not the risk that attracts me but the desire to change the world and build stuff that other people find value in.<p>To build something that other people use is an ego boost.<p>To build something that other people _pay for_ is even better.
This article is a flaming piece of crap, like most of techcrunch, designed to do little more than inflate egos and rouse people to come back to the profiteering gluttons that, by the way, make up most of his "circle of friends". You want to see a better rallying call for change, try this: <a href="http://goo.gl/hMH8" rel="nofollow">http://goo.gl/hMH8</a>