Taking Risks in Business

I’ve been running Internet Businesses since the nineties. Before that I set up my first business writing and running Murder Mystery events just in the middle of Thatcher’s recession. Some would say I have succeeded… others would say I have a way to go yet.

I can confirm that I indeed have a way to go yet… but many other good friends fell along the way…

But if everything I had tried had gone well… I would have been knighted. If more of the things I tried had gone wrong, I would be pushing shopping trollies. I think I have played the game by taking considerably less risk than most on the Internet. I feel the Internet has in general been akin to the wild, wild west frontier – where the only two weapons were faith and guns and neither of these have much of a place in business.

Sure – I took a big risk when I left university, choosing to start a business with less than £1,000 borrowed from a friendly bank manager. But I had no money to lose anyway… so how big was this risk compared to six or seven figure VC funding for an unproven P&L model? Very little. If I had failed, I could – at that age – have picked myself up and the damage would have been less than if I had written off a motorbike. It FELT like  a risk at the time, but it really wasn’t great.

Then when the Internet came along, I was learning about search engines – or rather how I might influence the algorithms – and found myself going to a group called “First Tuesday” It was an alien world to me, where VCs and entrepreneurs met in what Bob Geldof – the night’s speaker- observed was a “Sea of Greed”. He was right… so I set up a smaller consultancy, with about £30,000 worth of cash as I recall, shared between my mortgage and my business partner’s cash. Hardly a king’s ransom. By contrast, Bob Geldof”s Internet business – worth £30 Million at its height – was eventually sold for £150,000 in just 2003. I may have risked my house – but my risk was nothing compared to the guy that thought the others in the room smelt of greed. I have to wonder how spectacularly some of the others in that room must have risked and lost compared to me.

Now I have again taken a risk – by working with some incredible people trying to crawl the Internet. You would think that there are some other pretty spectacular companies already doing this rather well, with Google and Bing leading the field. But as you grow older, you learn to better assess risk. I don’t believe we have risked anything like Microsoft risking the farm with $1 trillion. Now I would happily sell out for that $1 trillion – but I think that the point is that I saw innovation and commitment in the guys at Majestic and thankfully they saw some kind of value in me. Majestic IS successful and I am convinced will continue to be so, but the risks are far from Casino like in nature. Sure, when you play a game you want to create a winning strategy, but try not to leave your back door open… a Fox will come in to take your first born.

Don’t risk more than you can afford to lose.

I am also rubbish at Poker.