7 Examples of Risk Taking in Business That Should Inspire You

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Risk, gentlemen, is the lifeblood of conquest, the currency of the bold. It's not just a gamble; it's a declaration of intent, a testament to ambition. In the world of business, risk is the great equalizer, the line that separates the titans from the mere mortals.

An article by Forbes, “The Importance Of Taking Risks In Business” published in 2021, reported a staggering statistic that 70% of startups crumble into oblivion by their tenth year. Yet, every empire you've ever admired was built on the cusp of such failure. Take, for instance, the audacious moves of Elon Musk, who invested his entire PayPal fortune into SpaceX and Tesla, teetering on the brink of bankruptcy. He didn't just take a risk; he wagered his entire future on it.

Examples of Risk Taking in Business

Risk is directly connected to opportunity. The businesses that are in a constant state of progress are the ones that recognize and accept risk as a cost of opportunity. They are the ones who have a competitive advantage because they dare to venture where others hesitate. 

So, as the Invisible Man delves into the complexities of risk in business, remember this: risk is not just a variable in a business equation; it's the equation itself. It's the key to unlocking doors you didn't even know existed. 

A. Importance Of Risk Taking In Business

In essence, risk in business is the transformative force that turns base ambitions into golden legacies. To ignore it is to court mediocrity; to embrace it is to flirt with immortality. Risk is not an option; it's the only path to business transcendence.

A Harvard Business School study reveals that entrepreneurs with a proclivity for risk-taking are more likely to succeed. It's not just about embracing the unknown; it's about making calculated moves that promise a lucrative return on investment. Another ground-breaking study in the Journal of Business Venturing suggests that companies that court risk are nearly four times more likely to be pioneers in radical innovation. It's a straightforward equation: no risk, no ground-breaking reward.

But the allure of risk isn't just material; it's deeply psychological as well. The act of taking a risk triggers a dopamine release, a neurochemical high that fuels further audacity. It's a primal urge, etched into our genetic code. 

So, when faced with a business decision, understand that risk isn't just an element in your strategy; it's the strategy itself. It transforms the ordinary into the extraordinary, the ephemeral into the eternal. Hence, rather than avoid risk, the search should be for that one way for an entrepreneur to decrease risk altogether.

B. 5 Benefits Of Taking Risks In Business

5 Benefits Of Taking Risks In Business

1. The Catalyst For Skill Enhancement

Risk forges new skills. It's the relentless drill sergeant that pushes you beyond your comfort zone, forcing you to adapt, evolve, and improve. According to an article in Elorus, one of the most significant benefits of risk-taking is that it urges you to learn new skills and evolve existing ones. 

2. The Demolisher Of Fear

Risk is the antidote to fear. It's the liberating force that obliterates the paralyzing dread of failure. When you embrace a culture of risk-taking, the fear of failure gets obliterated. You realize that failure is not the end but a stepping stone to success.

3. The Incubator Of Creativity

Risk is the mother of invention. It's the chaotic workshop where creativity thrives, where conventional wisdom is challenged, and where groundbreaking ideas are born. Risk inspires creative thinking, forcing you to look at problems from different angles and come up with innovative solutions.

4. The Revealer Of True Objectives

In the heat of the moment, when faced with "fight or flight" situations, risk forces you to confront your true objectives. It's the litmus test that reveals what you genuinely value, what you're willing to fight for, and what you're willing to sacrifice.

5. The Builder Of Trust and Ownership

Risk fosters a culture of trust and ownership among employees. When the team takes risks together, they learn to rely on each other. This sense of collective risk-taking fosters a sense of ownership and camaraderie that is invaluable in business.

C. Risk Taking In Entrepreneurship With 7 Examples

7 Risk Taking In Entrepreneurship Examples

1. Patrick Soon-Shiong

In a world where most tread cautiously, Patrick Soon-Shiong dances on the edge of the abyss. Born to Chinese immigrants in apartheid-era South Africa, his early life was a crucible that forged an audacious spirit. This man didn't just become a doctor; he became a disruptor in the pharmaceutical industry. 

In the cutthroat world of pharmaceuticals, Soon-Shiong did the unthinkable. He invented Abraxane, a cancer drug that would become a blockbuster. But the creation of Abraxane was not a linear path; it was a labyrinth of clinical trials, FDA approvals, and endless skepticism from the medical community. The risk was not just financial; it was reputational. A failure would not just be a monetary loss but could potentially discredit his entire career. Yet, he persevered, and Abraxane became a revolutionary treatment for pancreatic cancer.

But why stop at pharmaceuticals? Soon-Shiong sold two of his drug companies for a staggering $9.1 billion. This wasn't a mere transaction; it was a high-stakes gamble in the volatile market of pharmaceuticals. The risk was monumental, but the payoff was astronomical. And then, as if to defy all norms, he plunged into the media industry, acquiring the Los Angeles Times and San Diego Tribune for $500 million. A seismic shift, far removed from the clinical sterility of pharmaceuticals, yet he took the plunge.

When the Covid-19 pandemic engulfed the world, Soon-Shiong's ImmunityBio was selected for the federal government's "Operation Warp Speed." This wasn't a business opportunity; it was a race against time, a gamble with human lives at stake. Yet, he took on the challenge, further solidifying his reputation as a calculated risk-taker.

According to a study in the Journal of Business Venturing, the most successful entrepreneurs engage in "effectual reasoning," a form of decision-making that involves taking calculated risks. This perfectly encapsulates Soon-Shiong's approach to business and life. He doesn't just take risks; he calculates them, weighs them, and embraces them.

2. John Mackey

John Mackey, the co-founder of Whole Foods Market, is a living embodiment of audacious risk-taking in the business. In 1978, with a mere $10,000 loan and an additional $35,000 scraped together, Mackey and his then-girlfriend Renee Lawson dared to open SaferWay in Austin, Texas. The market was already saturated with health food stores, but Mackey was unyielding. He envisioned a different kind of marketplace—one that would not only sell organic produce but would also operate on the principles of "Conscious Capitalism," a philosophy that transcends the mere accumulation of wealth.

Two years later, Mackey took another gamble. He merged SaferWay with Clarksville Natural Grocery, a move that could have diluted his burgeoning brand. But Mackey was playing a different game. He was building an empire. The newly formed Whole Foods Market was his canvas, and he was the audacious artist, splashing bold strokes of innovation and ethical business practices onto it.

But Mackey didn't stop there. In 2007, he orchestrated the acquisition of Wild Oats Markets, Inc., a direct competitor. The business world watched, jaws dropped, as the Federal Trade Commission tried to block the deal, citing antitrust concerns. Mackey fought back and won, further solidifying Whole Foods' position as a juggernaut in the organic food industry.

What makes Mackey's risk-taking even more compelling is his unorthodox approach to wealth. He slashed his own salary to a symbolic $1 per year and donated his stock portfolio to charity. For Mackey, the thrill was never in the accumulation of wealth; it was in the audacity of the risks he took to build something monumental.

Research corroborates the effectiveness of Mackey's audacious risk-taking. A study published in the Journal of Business Ethics found that companies operating under the principles of Conscious Capitalism outperformed the S&P 500 by a factor of 10.5 over a 15-year period. Mackey's Whole Foods Market became a Fortune 500 company, with a market value peaking at $13 billion. His influence has rippled through the business world, challenging entrepreneurs to take risks not just for profit, but for a greater, more ethically sound vision.

3. Sir John Law

In financial history, few figures embody the essence of risk-taking as vividly as Sir John Law, a Scottish economist and financier who lived from 1671 to 1729. Law was a man ahead of his time, pioneering ideas that would later become cornerstones of modern economics. Yet, his audacious ventures also serve as cautionary tales, illustrating the fine line between visionary entrepreneurship and catastrophic overreach.

Risk Taking Entrepreneurs Examples

Born into a family of bankers and goldsmiths, Law was no stranger to the world of finance. He began his career in the family business but soon found himself drawn to the high-stakes world of gambling and speculative investments. His early years were marked by both brilliance and scandal, including a duel over a love affair that led to a murder charge. Law managed to escape the hangman's noose, fleeing to Amsterdam where he honed his financial theories.

Law's most audacious venture was the establishment of the Banque Générale in France in 1716, which was later nationalized and renamed Banque Royale. This was effectively the nation's first central bank, and it was backed only partially by silver, making it a fractional reserve bank. Law also founded the Mississippi Company, aiming to consolidate the trading companies of Louisiana into a single monopoly. His idea was to replace gold with paper credit, thereby stimulating the economy. The term "millionaire" was even coined to describe the beneficiaries of Law's schemes.

However, the Mississippi Bubble, as it came to be known, burst spectacularly. Share prices soared to unrealistic levels before crashing, leading to a financial crisis. Law was dismissed from his position and fled France, his reputation in tatters. Yet, despite the catastrophic failure, Law's ideas about paper money and central banking were revolutionary and influenced economic thought for generations to come.

Law's life is a testament to the transformative power of risk-taking in entrepreneurship. His willingness to challenge conventional wisdom, to innovate, and to stake his entire reputation on untested theories make him a compelling study. Yet, his story also serves as a warning about the perils of hubris and the volatile nature of financial markets.

4. Ferdinand Magellan

Ferdinand Magellan, the Portuguese explorer who dared to circumnavigate the Earth, epitomizes the audacity of risk-taking in a realm far removed from the boardrooms and stock markets we associate with modern entrepreneurship. Yet, the essence of his venture was entrepreneurial in nature—staking everything on an unproven hypothesis, challenging the status quo, and venturing into the unknown with nothing but a vision and the will to realize it.

Born into a minor noble family, Magellan wasn't content with the limitations of his birthright. He sought to expand his horizons, both literally and metaphorically. His audacious plan was to find a westward route to the Spice Islands, bypassing the established and perilous route around Africa. The idea was heretical, dismissed by the so-called experts of his day. Yet, Magellan was undeterred.

In 1519, with the backing of the Spanish crown, he set sail with five ships and a crew of 270 men. The journey was fraught with hardships—mutinies, starvation, and confrontations with indigenous peoples. Yet, Magellan's leadership and unyielding belief in his vision held the expedition together, even as they entered the treacherous straits that would later bear his name. 

Though he would not live to complete the journey, killed in the Philippines, his expedition did. His fleet, reduced to a single ship, returned to Spain in 1522, proving that the world was indeed round and revolutionizing the understanding of geography and global trade.

Magellan's voyage led to the first accurate measurements of the Earth's circumference, a feat that had profound implications for navigation and trade. The spices brought back from the voyage were worth more than the cost of the expedition, proving the commercial viability of the westward route. Finally, Magellan's journey was not just a physical expedition but a psychological one. The mental fortitude required to undertake such a venture has been studied in the context of entrepreneurial risk-taking.

5. Hernán Cortés

Hernán Cortés, the Spanish conquistador who led the expedition that resulted in the fall of the Aztec Empire, is a figure shrouded in both glory and infamy. Yet, regardless of the ethical implications of his actions, Cortés was an entrepreneur of risk in its rawest form. He ventured into uncharted territories with not just the aim of exploration but with a vision of conquest and the establishment of new trade routes for Spain.

Born in 1485 in Medellín, Spain, Cortés was not content with the life that awaited him. He was drawn to the allure of the New World, a place rife with both danger and opportunity. In 1519, against the direct orders of his superiors, Cortés set sail for Mexico with 600 men, 20 horses, and 11 ships. Upon arrival, he made the audacious decision to scuttle his ships, eliminating any possibility of retreat. This was not just a military tactic; it was a psychological gambit, a clear message to his men that failure was not an option.

Cortés' gamble paid off. Through a combination of military prowess, strategic alliances with local tribes, and sheer audacity, he managed to topple the mighty Aztec Empire. The risks were astronomical. He was operating thousands of miles away from any form of support, in a hostile environment, against a vastly superior force. Yet, he succeeded, and his success had profound implications, opening up Mexico and much of Central America to Spanish colonization and trade.

Cortés' actions led to the introduction of new crops to the New World, including sugar and wheat, which had a significant impact on local economies. His decision to scuttle his ships has been studied in business schools as a lesson in commitment and the psychology of leadership. Cortés was also an early adopter of the "divide and conquer" strategy, leveraging local rivalries to his advantage, a tactic that has been employed in various business contexts.

In the context of our exploration of risk-taking in entrepreneurship, Hernán Cortés serves as a stark example of how audacious risks can lead to monumental rewards but also carry ethical implications. 

Risk Taking Entrepreneurs Examples In History

6. P.T. Barnum

P.T. Barnum, the man who declared, "There's a sucker born every minute," was not just a showman but an entrepreneur who understood the art of risk as spectacle. Born Phineas Taylor Barnum in 1810, he was a natural salesman from a young age, peddling snacks and cherry rum to soldiers by the time he was 12. His audacity knew no bounds; he even exhibited an elderly slave named Joice Heth, claiming she was 161 years old and a former nurse for George Washington, raking in an estimated $1,500 per week.

Barnum's most audacious risk, however, was the creation of what would become the Ringling Bros. and Barnum & Bailey Circus. He launched this traveling spectacle in 1871, referring to it as "The Greatest Show on Earth." But before the circus, there was the Barnum American Museum, a collection of oddities and curiosities that was the precursor to his later ventures. When the museum burned down—twice—he didn't retreat but doubled down, entering the circus business.

The circus was not just entertainment; it was a calculated risk, a business venture that required meticulous planning, aggressive marketing, and the ability to manage a large, diverse workforce. Barnum's risks often paid off spectacularly, as with the acquisition of Jumbo, an 11.5-foot, 6.5-ton elephant, which became a sensation and a massive revenue generator.

Barnum's knack for promotion has been studied as a case in brand building. His ability to create hype around his ventures was unparalleled, a skill that modern entrepreneurs still strive to emulate. His decision to enter politics and philanthropy, serving multiple terms in the Connecticut legislature and even as the mayor of Bridgeport, shows the breadth of his risk-taking abilities. And ultimately, Barnum's legacy endures not just in the entertainment industry but also in the world of business. His strategies in advertising, public relations, and business operations are still studied today.

7. Satoshi Nakamoto

In the discussion of entrepreneurship and risk taking, few figures are as enigmatic and impactful as Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Nakamoto's identity remains one of the internet's greatest mysteries, but their contribution to the world of digital currencies is indisputable. In 2008, Nakamoto published a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System," laying the groundwork for a decentralized digital currency that would operate without the need for intermediaries like banks. By January 2009, Nakamoto had released the first version of the Bitcoin software and mined the genesis block, marking the birth of Bitcoin.

The risk involved in this venture was astronomical. Nakamoto was challenging the very foundations of global financial systems and risking legal repercussions. The creation of Bitcoin required not just exceptional skills in computer science and cryptography but also the courage to introduce a disruptive technology that could fail spectacularly. Nakamoto collaborated with other developers until mid-2010 and then handed over control of the Bitcoin source code repository to others, effectively disappearing from public view. As of November 2021, it was estimated that Nakamoto owns between 750,000 and 1,100,000 bitcoins, which would have made their net worth up to $73 billion when Bitcoin reached its highest value.

The impact of Nakamoto's risk-taking is monumental. Bitcoin spawned an entirely new industry of cryptocurrencies and blockchain technology, influencing sectors from finance to healthcare. It has also sparked debates about the future of money, privacy, and the centralized systems that govern our lives.

D. Conclusion

Where men wander through the corridors of ambition and desire, risk is not just a concept; it's a rite of passage, the element that separates the titans from the mere mortals. We've journeyed through the lives of seven men who didn't just flirt with risk; they seduced it, tamed it, and made it their own. From the enigmatic Satoshi Nakamoto, who revolutionized our understanding of currency, to the audacious P.T. Barnum, who turned spectacle into a business model—these men are not just entrepreneurs; they are architects of fate.

The very essence of risk is deeply rooted in our primal instincts. The hunter-gatherers of yore took risks when they ventured into unknown territories, seeking new hunting grounds and resources. The same primal drive fuels the modern man's pursuit of entrepreneurial ventures. It's not just a business strategy; it's a return to our ancestral roots, a manifestation of the hunter-gatherer within us.

So, what are you waiting for? The playground is open, and risk awaits you. Will you cower in the dark corners, or will you draw your sword and face it fearlessly? The choice is yours, but remember: immortality is reserved for those who dare.