Tuesday, August 10, 2010

Successful Entrepreneurs Aren't Risk-Takers

I read a great article the other day on the subject of Entrepreneurs and Success, by one of my favorite authors - Malcolm Gladwell. You might recognize the name from his recent works: The Tipping Point, Outliers, Blink, and What the Dog Saw. The article debunks the myth of the successful entrepreneur as a risk-taker, and introduces the Predator theory as one of the main reasons behind the success of many of the most famous and well-known entrepreneurs. The success of these entrepreneurs, as the article successfully points out, is not the result of their ability or willingness to take on risk, but rather their aversion to risk-taking, and their focus on the sure thing.

Put another way, these successful entrepreneurs wouldn't place a bet on a Yankees-Red Sox game, where there would be a 50-50 chance of either team winning. They would, on the other hand, put their money on the Yankees, if the first place Yankees were playing a last place team with a depleted starting rotation!

Little risk, high value, and a big pay-off may tend to explain the huge success and adoption of Software-as-a-Service (SaaS) within entrepreneurial start-ups; and small, medium, and large businesses that have stayed true to their entrepreneurial spirit. What SaaS represents is a huge deviation from the traditional software model, with little downside and a whole lot of upside:
  • There is no upfront investment - you don't have to buy any hardware or software, because SaaS can even replace things like your fax machine, phone system and email servers;

  • Little or no risk - you can try it before you buy it. If you buy it, then it's pay-as-you-go with no contracts involved. As well, since you're using a service/services that is used by thousands and/or millions, you know what you're getting from the get-go;

  • Value - sharing with hundreds of thousands (and in some cases, millions) of users also allows you to get a more robust service than you could get by running the software and/or hardware all by yourself. Most SaaS offerings provide small business with features and capabilities that were previously available only to large enterprises, and only at a steep cost;

  • Accessible from anywhere - the road, home, in an airport, etc. Mobility, whether for a small at-home business or a Fortune 500 company, is the new reality of business. Operating your business from a car while waiting for a customer is no longer just convenient, but necessary to get ahead.

These days, just about anything can be offered "as-a-service" from fax to phone systems; customer relationship management to accounting software to word processing. With the above advantages starting for as little as $10.00 per month, you can truly understand why, for most entrepreneurs, adopting SaaS...is almost a sure thing.

What do you think? Do you see entrepreneurs as risk-takers? Are you adopting SaaS successfully in your business? Take it to the comments...

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