ABC (the TV network) rolled the dice this morning. And lost.
The space shuttle Endeavour launched for the last time this morning. My wife paused to watch before heading out the door to take the kids to school.
As the countdown neared zero, water poured onto the launch pad, the solid fuel boosters fired up, smoke billowed, and moments later, we had liftoff.
After a few seconds showing a long-distance shot of the shuttle climbing into the sky, the image switched to an overexposed picture of the underside of the shuttle and it's connection to the external fuel tank. Nothing much to see there. A second or two later we were back to a long-distance shot.
And then, inexplicably, ABC went back to the overexposed underbelly shot. And stayed there. For a long time.
It couldn't have been more boring.
So why did they focus on that shot for so long? I don't have ABC's producers on speed dial, so I can't confirm this, but I think it was a calculated risk.
I think they were hoping to broadcast a live shot of foam insulation, or some other part, falling off. I honestly can't imagine any other reason that a broadcast professional would spend so much time in such a historically significant broadcast on something so unprofessional looking and mundane.
Huge Upside Potential
If the bet had paid off -- if they'd gotten the shot -- the payoff would have been enormous. They'd have shown the shot over and over and over and over and over until the shuttle was safely back on the ground, bragging about how they'd broadcast it live.
They would have trotted an endless stream of experts across the stage to analyze the risks to the crew. (The experts would say the risk is small, while ABC would harp on questions like "but if a critical system was damaged, it could result in a huge fireball and a horrific death for the crew, right?" To which the experts would reply, "uh, well, yeah, I suppose that's not entirely impossible.")
They would have tugged at our heartstrings with speculation over whether Rep. Gabrielle Giffords' husband should have been on this risky flight when she's already suffered so much.
And their ratings would have soared into low earth orbit.
Small Downside Risk
If, on the other hand, nothing fell off (which it didn't -- at least not in ABC's coverage), what'd be the downside? Unless some marketing blogger decided to call them out to make a point and a lot of people linked to his post and clicked the Facebook "Like" button at the bottom (hint, hint! :-), the boring coverage would soon be forgotten.
To me, this morning's coverage made ABC look less like a serious news outlet, and more like like a tabloid, rolling the dice and hoping to hit the jackpot. I guess ABC was banking on people like me being a small minority.
We entrepreneurs are, by definition, less risk-averse than the average person. And that's a good thing if we choose our risks wisely. But it can cause problems when we dive in head first without checking the depth of the water.
A few things to consider when evaluating business risks:
- How big is the upside? Is the potential payoff if things go well big enough to justify the risk?
- How big is the downside? Are you doing something stupid because it looks fun, like an adrenaline junkie with a wife and kids who risks his life for the rush? Or is the risk small, like "what if nobody notices?" A lot of times, if you ask yourself "what's the worst thing that could possibly happen?" you'll realize that there's really very little risk at all.
- What are the fixed costs of trying? When considering the downside risk, don't forget that even if nothing bad happens, there's still the risk that you simply won't get a good return on your investment -- your opportunity costs in time and money.
- What kinds of downside risks are there? For example, if you're considering doing a webinar, and the biggest downside risk is that you'll forget what to say and look like an idiot, that's a lot different than the risk that you'll come across as a bigot and alienate your best customers and business partners. If the risk is emotional, then suck it up and forge ahead. If the risk is to the health of your business, then you need to think it over more carefully.
- How likely is each potential outcome? If the odds of success are like the odds of winning the lottery (which I once calculated to be about as likely as picking the right one-foot strip of freeway somewhere between Grand Island, Nebraska and Orem, Utah), then there'd better be very little downside risk, even if the upside is huge. If the risk of catastrophic failure is large, then forget it. No matter how big the upside.
- Are you going to have to cross this bridge sooner or later? If the thing you're considering doing is an integral part of the business you're building, then you either need to pull the trigger, or go get a job. Yes, you should prepare and do what you can, within reason, to maximize your odds of success. But if, when you're honest with yourself, you have to admit that you're not willing to do what's necessary, then don't waste time fooling yourself. And endlessly tweaking and hoping to remove all the downside risk is the same thing as being unwilling to do what's necessary, because it's impossible.
As I wrote last month, entrepreneurs have to face down their fears if they want to succeed.
How sad to struggle in your business because you avoid what you fear instead of just doing it -- and becoming one of the successful few who've even tried. The things we fear the most are often the most important and powerful things we could possibly do.
One of the saddest things I can imagine is for someone to spend their entire life living a small fraction of their potential because they decided to accept their fears as true limitations, never stretched beyond where they thought their limits were, and never realized how few limits they really had.
Fear is a pretty sorry reason for running from risk. But the reasons behind fear -- the actual risks -- may or may not be good reasons.
My kids were a minute late to school today because of the space shuttle launch. ABC, you could have made it a lot more worth it by spending more time showing the low-risk image of the shuttle climbing into the sky.