ENTREPRENEUR

Entrepreneur or Gambler?

Are you an entrepreneur or a gambler?
Copyright 2002 Peter Budvietas
Over the years, I've met a number of gamblers and entrepreneurs. I have looked at their similarities and differences. In this article, I would like to share some of these observations.
Both are aware of "the odds" in what they do. They both do a great deal of calculation to decide which path or option to take. When they pick an opportunity, they commit themselves fully to it. Both are very optimistic about what they are doing. And both know when to stop.
There are other similarities, but this article is too short to give an exhaustive evaluation of their similarities.
The biggest difference is the gambler enjoys taking risks. They concentrate on the reward that will come from the risk. They can even be called adrenalin junkies.
Entrepreneurs, on the other hand, try to eliminate as much risk as possible, and concentrate on getting reasonable results.
I conducted an experiment with an avid gambler and a successful entrepreneur to find out what they thought about business on the Web.
I didn't give them any figures or suggest that they really take part on the Web, but suggested that they start with $5,000.
"Wow!" said the gambler a few days later. "The Web is a fantastic place to make money! It's better than running a casino!"
"Hmmm!" said the entrepreneur. "It's not the soundest proposition for good results, but it is a possibility, if you are extremely careful. I don't think that many people are doing well on the Web."
"$43.1 billion spent on the Web, last year!" added the gambler. "And the bulk of it went to about 5% of the punters. So, it looks like odds of around 20 to 1 against success, but the returns can be as high as odds of 1000 to 1. So, if I bet something like $5,000, I can get back $5,000,000 instead of $100,000. Very much a big win - 50 times what I'd

normally expect."
The entrepreneur: "$43.1 billion in sales, last year, sounds like a fair amount of business, but it's spread out over a huge number of businesses. I'm not certain how many businesses, though. There's too many that just use the Web as a kind of brochure for their businesses. But, I figure that there's between 1,000,000 and 10,000,000 real businesses active at any time. So, I think we can do calculations on those numbers, and expect to be reasonably accurate. With 1 million businesses, the average return is around $43,000, and with 10 million, it's around $4,300."
"What does that mean?" I asked the entrepreneur.
"It means that, with 10 million businesses, you'd be losing money, a bad investment, unless you can find a way of improving your return. With 1 million businesses, you have a real chance of making a good profit. You can work out the averages for numbers between these two, but the closer to 10 million you get, the smaller the return."
"How would you use the $5,000?" I asked each of them.
The gambler: "First, look for the big success stories. They are the form indicators. Then look for something that is just starting, but is already beginning to show high returns. I saw about six of these while browsing, so there's probably a lot more."
"Why not go with the big successes?"
"Well, most have already run their shot. They've given the big returns, and they are being copied left, right and centre. They're slowing down. The new ones are only a little way past the start, but they're already showing that they're goers, and they'll peak in the next year or so. If you get in now, they'll give you the big returns. There's a couple of duds in that stage as well - they won't last long enough to become big winners."
The entrepreneur: "Very hard to say. Personally, I'd try to create something different from what's already there. Let the suckers

run after the current big successes; they only help the people already successful. You're too late to share in the real making of money. Find what people are looking for, and then build up a campaign to get it known. Your $5,000 is a bit light for a start-up, but it should be enough to fuel a business for at least three months."
"Chances of success?"
The gambler: "Initially, I thought the odds would be about 20 to 1. But, I'd lower those to about 6 to 1. The returns are not quite the 1000-1 that I thought, but I'd say you could turn your $5,000 into $500,000 in a year at those odds. That's better than I usually do."
The entrepreneur: "With care and planning, I'd say that the Web is a good place to start a business. The best chance is to get around a $30,000 return on your $5,000. That's something that you can plan out. I'd say that 60 to 70% of the businesses on the Web could do that. As for $100,000 or a million dollar returns, the chances are extremely small. But, if you plan on the $30,000 a year, you can never tell when luck and opportunity will make your business as big as you can handle or more."
Two different viewpoints. Both suggest that you can succeed on the Web. So, if you are doing business on the Web, which are you?
Gambler or Entrepreneur?
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Peter Budvietas is an information synthesist. For over 30 years he has been studying patterns in economics and business and observing social and development trends. He has written many articles and currently has four ebooks on business fundamentals available through either the online training program, Methods of Success, http://www.formula3-5.biz or occasionally on special through Taking Business to the eXtreme at http://www.formula3-5.com

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