Coming to Terms with the Risk

COMING TO TERMS WITH THE RISK

In 1994, Jeff Bezos had a comfortable, well-paying job in finance in New York City. He had been increasingly considering quitting to launch a company on this exciting new thing called “The Internet.”

But he wanted to make sure he had a clear view of the odds facing him. By his estimate, about 10 percent of internet start-ups grew into successful businesses. Bezos suspected that his skill level and business idea were better than average, but he also knew that wasn’t a justification for ignoring the baseline odds completely. All things considered, he gave himself about a 30 percent chance of success.

How did he feel about that level of risk? Could he stomach the possibility of failure? Bezos imagined being eighty years old and looking back at his life choices. Missing out on his 1994 Wall Street bonus wasn’t the kind of thing he would care about decades later. But passing up the chance to participate in the growth of the internet absolutely was. “If it failed, fine,” he decided. “I would be very proud of the fact when I’m 80 that I tried.”22 That’s what clinched his decision to take the plunge, quit his job, and start the company that would become Amazon.

The “self-belief” model of motivation assumes that if you acknowledge the possibility of failure, then you’ll be too demoralized or afraid to take risks. In that model, people who believe that failure is unthinkable are the ones who try the hardest to succeed. Accepting the possibility of failure can instead reduce the need to keep reassuring yourself that success is certain. For some people, deciding that the risk is tolerable makes it easier to proceed.

When one interviewer praised Elon Musk for being fearless in starting companies that other people think are crazy, Musk admitted that he actually feels fear very strongly. He’s just learned to manage that fear by coming to terms with the probability of failure. “Something that can be helpful is fatalism, to some degree,” he explained. “If you just accept the probabilities, then that diminishes fear. So in starting SpaceX, I thought the odds of success were less than 10 percent, and I just accepted that probably I would lose everything.”23

People working on hard projects who are conscious of their high risk of failure generally aren’t dwelling on that risk on a day-to-day basis. When they get up in the morning, they’re motivated by more concrete things—the pitch meeting coming up next week; the goal they’ve set for themselves to ship their first product next month; the challenge of putting out whatever the latest fire is; the progress they’ve made so far; the people who are counting on them.

But in those moments when they’re deciding what risks to take or stepping back to reflect on their life choices, being able to feel satisfied with the bet they’re taking—even if it fails—makes all the difference. There’s a line from a blog post I read years ago that has stayed with me, and still gives me a sense of resolve when I’m taking a bet I believe is worthwhile but risky. Maybe it will do the same for you: “You want to get into a mental state where if the bad outcome comes to pass, you will only nod your head and say ‘I knew this card was in the deck, and I knew the odds, and I would make the same bets again, given the same opportunities.’”24

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We have a choice of coping strategies for emotions like anxiety, disappointment, regret, and fear. Some coping strategies involve self-deception, and some don’t—so why settle for the former?

The same logic applies to our strategies for motivating ourselves to be ambitious, take risks, and persevere when things get tough. The soldier approach to motivation requires you to believe things that aren’t true—that your odds of success don’t matter as long as you believe in yourself, that failure is not an option, that “luck” is irrelevant.

Soldier morale can be effective, at least in the short term. But it’s a brittle kind of morale, one that requires you to avoid or rationalize away new information that could threaten your ability to keep believing in success.

Scouts rely on a different kind of morale. Instead of being motivated by the promise of guaranteed success, a scout is motivated by the knowledge that they’re making a smart bet, which they can feel good about having made whether or not it succeeds. A worthwhile bet can still fail. Repeated opportunities may improve the chance of eventual success, but that depends on the opportunities, their relationship to one another, and whether losses leave room to continue. Accepting a risk means considering those limits rather than assuming downturns must wash out.

The scout approach to morale doesn’t ask you to sacrifice your ability to make clear-eyed decisions. And it’s a robust kind of morale, one that doesn’t require protection from reality, because it’s rooted in truth.