Minimizing Risk In Entrepreneurship: Pattern Recognition, Iteration
Risk minimization leverages pattern recognition, pattern iteration and pattern replication.
By Larry Chiang (CEO, Duck9 & Stanford University EIR)
I have this theory that risk can be nearly eliminated.
I mentor academically smart female engineers to also be street smart. Street smart used to imply shady.
In this Women 2.0 blog post, it means compression of massive experience via pattern recognition that leads to pattern replication and pattern iteration.
Every street smart maneuver you have heard me do via urban legend is a pattern I’m replicating. It’s based on my mentor’s pre-laid and pre-organized patterns that the unknowing public calls “street smart”. Street smarts is not the Jedi knight’s mind trick. It’s more like R2D2 when he regurgitates the right stored message at the right time.
My theory in risk minimization leverages pattern recognition, pattern iteration and pattern replication. Risk mitigation and near risk elimination has been in my entrepreneurship practice since engineering school. Like my yoga practice, I also have a guru. In yoga, my mentor is Giselle Mari.
In the practice of entrepreneurship, my mentor is Mark McCormack. I reverse engineered his fully legal and ethical street smart maneuvers into signature recipes. Many are publicly available via his book: “What They Don’t Teach You at Harvard Business School”.
An entrepreneur example that is at the core of what he taught me is doing a sequel business to a business you did not start. Examples abound for you to pattern replicate:
- Wicked is a Sequel to a Play They They Didn’t Write: “The Wizard of Oz”
- Snow White Lost Her Dwarfs and Got a Sexy Huntsman
- Federal Express is a Sequel Business to the US Postal Service
- Facebook is a sequel business
- Duck9 is a sequel to a sequel
- Gua Gua Guacamole is a sequel to Lululemon
Another area of entrepreneurship without risk is doing a play business / lemonade stand business. The idea is to build up our skill sets PLAYING. For example, I started near prank franchises like “Reverse VC pitch”. It’s where tier one VCs pitch entrepreneurs and pay for that opportunity. To facilitate entrepreneurship education for engineers who don’t want to be founders, I have them co-found a franchise concept with me. These are lemonade stand concepts.
A lemonade stand concept franchise is for you if you spent your entire youth getting into either MIT or Stanford and never really worked. It simulates baby entrepreneurship. Mark Cuban wrote two articles about this – “Making Money as a Student” and “Don’t Follow Your Passion, Follow Your Effort”.
It allows you to get away from active risk avoidance and into the practice of entrepreneurship.
As my yoga guru Giselle says at the beginning each yoga practice that I will R2D2 regurgitate to you: Set an intention for your entrepreneurship practice. And tweet it to me.
Editor’s note: Got a question or answer for our guest blogger? Leave a message in the comments below.
Photo credit: Getty Images
About the guest blogger: Larry Chiang is CEO of Duck9. He scandalously uses his company’s credit card product to lead generate CS major founders by ‘selling’ a credit card that actually pays CS major undergrads called the “Larry Chiang Duck9ReverseAnnualFee.com” product. His fund is called “Larry Chiang Stanford G51 Fund of Stanford Founders”. He teaches ENGR 145 at Stanford as an EIR. Follow him on Twitter at @LarryChiang.