The technology industry’s hype-machine would have us believe that all new ventures require only the god-like foresight of a deep-pocketed VC and engineering savants living lean until their stock options are liquid.  So why are the odds of success close to 50-1?  Those odds might improve with better risk-management skills:


Beating the Odds When You Launch a New Venture

By Clark Gilbert and Matthew Eyring , Harvard Business Review From the May 2010 Issue

For nearly 20 years the case study used to introduce Harvard Business School’s Entrepreneurial Management course has been Howard Stevenson’s “R&R.” It looks at Bob Reiss, an entrepreneur who launches a venture in the board-game industry. Students are encouraged to explore all the production, development, distribution, and marketing costs associated with the new venture.

What has become clear to us is that the most effective corporate innovators are the ones who follow the same discipline Bob Reiss did. Success comes to those who quickly identify and systematically eliminate risks in the right order, using the right level of resources and the right methods.

Recognize That Not All Risks Are Created Equal

New ventures fairly bristle with risks. If managers attempted to eliminate all of them, the products or services would never get to market. The key question is “What’s the most important uncertainty?” and the answer should be targeted early. In considering how to answer that question, we have found it useful to think in three broad, sometimes overlapping categories:

  • Deal-killer risks
  • Path-dependent risks
  • Risks that can be resolved without spending a lot of time and money

Read the entire article

It’s not just risk of failure, but risk of missing success that must be managed.  To learn how we can help your venture manage that success Contact Us