Monday, July 25th, 2016
Reduce risk, increase revenue. That’s the goal of most business. Amazon CEO Jeff Bezos, however, takes it one step farther. He believes that a company should identify risks and not just reduce them, but eliminate them completely.
According to Bezos, the best entrepreneurs don’t like risk and work to identify it and remove it in the early days of a business. He says:
“Good entrepreneurs don’t like risk; they seek to reduce risk…Starting a company is already risky, and then you systematically eliminate risk step by step in those early days….you kind of need to systematically identify risk and then as the company gets bigger and more robust, you can start taking risks again but in those early days a lot of it is about ‘okay I have a good idea, how do we reduce risk?’”
We have to eliminate risks, gradually, until we have a viable business: so we need a systematic way of identifying risks in our product development and distribution chain.
Summing-up: Grow a business based on its core strengths and build the trust of industry and customers. Once you are running at a low risk, only then consider small expansions that might change the business.