Contrary to popular belief, successful entrepreneurs are quite risk averse and their corporate counterparts are often absurdly reckless. How so? Here are seven ways:

1. Entrepreneurs work on the basis of affordable loss, rather than promising a definitive ROI. This limits their downside, keeps their plans flexible and stops them throwing good money after bad.

2. Entrepreneurs only care about what works in practice, not what works on paper. By contrast corporations will often sign off on $Xm projects based solely on some eye candy in PowerPoint, supported by generic, desk-based research.

3. Entrepreneurs are willing to learn and adapt, whereas managers within large corporations tend to stick to the plan, even when it becomes obvious that its fundamentally flawed. 

4. Entrepreneurs start selling earlier — considering the sales process as a form of research. Corporations often foist new products onto their sales teams with little idea whether people will want it.

5. Entrepreneurs get traction then optimize. By contrast, large organizations often invest insane amounts polishing products or services when there isn’t yet any proven demand.

6. Entrepreneurs care mostly about whether now is the right time for a new product or service. Corporate types tend to think timing is largely irrelevant as long as they have the right features and price, so often enter the market too early or too late.

7. Entrepreneurs focus on what creates the most value for the customer. Corporate types tend to fuss over unique selling points or differentiators, which have comparatively little appeal to customers and narrows the potential buying base.
 
So there you have it. In reality entrepreneurs are comparatively risk averse. Or to put it another way, they embrace uncertainty as part of their process. 

All of this and much much more is explained in Mastering Uncertainty — cowritten with the mighty Csaba Konkoly — out at the end of this month.

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