Note: I first posted this in November 2015. It received 33k views and seemed to strike a chord. I have updated some of the references.
Before I started my first company I was employed as the General Manager of a small IT services company. I was 26 years old and for some reason the owner thought that I could revitalize (aka turnaround) his company, so he hired me to work out the wrinkles and develop the business.
One year later things had improved significantly and the company was now growing and making money. During that time I learned a tremendous amount about how a business works; the real difference between marketing and sales, the importance of customer relationships and the value of committed employees. But I had also unmasked some serious issues. I discovered how broken the company really was: the outstanding taxes owed, the strange (illegal) relationship with a major creditor (a much larger entity owned by the same person), and the promises made to employees that I knew couldn’t be kept.
In essence the business was insolvent. If we were to do the right thing, i.e. pay our taxes, regularize the relationship with the major creditor, and deliver on any part of the promises made to employees, then we would need to take all of the profits we had generated in the previous year, sell all of the company’s assets and shut the doors. I could not see how we could trade our way out of the difficulties. To continue was, in my opinion, highly unethical. Shutting down was going to be difficult, but I felt it was the right thing to do. So, I resolved to have a direct conversation with the owner (my employer) and recommend that we take that course.
The conversation did not go well.
“No company of mine is ever going to fail! Who the f*** do you think you are? Just go back and do the job I am paying you for.”
Not the warm and fuzzy heart-to-heart I was hoping for.
I now had two choices. I could continue in my reasonably well-paid job, taking solace from my efforts, and convince myself that I had done all that I could. Or, I could leave and take my chances that I would figure something else out.
I considered the risks. I had just bought a house and an expense mountain loomed before me. There were not that many jobs available. Some of my fellow graduate engineers were still unemployed. Having never really been employed as an engineer – the only profession for which I had a university qualification – it was unclear to me how I could make my resumé look attractive to an employer. But I just could not continue to do something I did not believe in, for someone who I had come to realize was morally moribund.
So I left.
About six months later, and having not been able to find a job, I started my first company – an Artificial Intelligence software business. The bank gave me a loan of £5,000 and my brother invested £5,000 for total working capital of £10,000. I negotiated a distribution agreement for another company’s AI software product and got 90-days credit on the products I bought from them. My job now was to sell those quickly and collect the cash before the 90-days ran out, meanwhile living on the £10,000. It all worked out well and 11 years later I sold that business to a publicly quoted US software company.
(The company I left closed down about 15 months after I left, and the other business owned by the same person followed suit six months after that.)
When I reflect on this period in my life I often wonder whether if when I started I had actually understood how hard it would be to build a company from scratch, would I actually have taken the risk? Being a CEO can be really tough. You always have to worry about making payroll – your employees depend on you for that. As a sole founder it is sometimes a lonely role. Customers (rightfully) expect that you will live up to the promises that any of your employees make. When an issue comes to you, there is nowhere else to go. The buck definitely stops here.
I had many challenges along the way, but the risk and obstacles were always overcome, and we survived. That’s what tends to happen with risk and obstacles, when you have to face them, particularly if you have jumped off a cliff with no parachute, you can generally figure it out. It is usually worth taking the (considered) risk.
There are few instances when I have regretted taking a chance, and definitely more cases where I regret not taking the leap even if I was not entirely sure what was on the other side.
That’s the thing about risk. I think about it as as the fellow traveller of ambition. Big ambition demands a willingness to take risk. Incremental changes can happen in a pretty safe way, but if you want something to be transformational, to change your life, your career, your business, then you need to think big, face down the risk, and figure out how to deal with it.
In today’s world of rapid change, status quo is not an option in business. We all need to strive for transformational change. The need to take chances is really the driver of the entrepreneurial attitude and initiative demanded by the current maelstrom of technological advances.
It is easy, and maybe safer to settle for mediocre, but if you want to get ahead of the pack, if you want to be an anomaly, then you have to act like one. Achieving your life, business, or career goals, demands that you take positive calculated risk. It is absolutely necessary, and while with any risk there is always something at stake, there are huge benefits.
Here’s my list of the top 10 Benefits of Taking Risks.
- You’re driven to learn new skills
- Embracing risk helps you to overcome the fear of failure
- It empowers you to break through self-imposed limits
- You become more creative
- It helps you clearly define what you really want
- You break free from ‘average’
- You uncover unforeseen opportunities
- Your self-confidence grows
- You learn to trust more, because you have to
- You don’t achieve your dreams by playing it safe
By not taking a risk, a moonshot, we run a bigger risk of being left behind. We often like to think that things will get better with time, but more often the opposite is true. Too often we focus on what might go wrong, but without taking initiative, in an effort to take the safest path, people sometimes end up with a life / business / career that they would never have consciously chosen.
I may be a riskaholic.
Altify is the fifth company I have started, and in some ways, when we started and built Dealmaker ten years ago it was the biggest risk ever. With a dream of smart sales transformation, in the cloud and on mobile devices, there were a lot of unknowns. But now, ten years later, with the confluence of smart, cloud and mobile as ever-present elements in the arsenal of modern sales organizations, we have a clear picture of what we want for our customers, – and that is to change the lives of their sales professionals for the better. So far, so good.
It was definitely worth the risk.
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Donal Daly is Executive Chairman of Altify having founded the company in 2005. He is author of numerous books and ebooks including the Amazon #1 Best-sellers Account Planning in Salesforce and Tomorrow | Today: How AI Impacts How We Work, Live, and Think. Altify is Donal’s fifth global business enterprise.