Wait... This is Risky, Isn't It?
When meeting with entrepreneurs exploring a new digital venture, we typically go through a process which looks like this:
- Initial Excitement and Huge Expectations
- Technical Exploration
- MVP / MVBP Refinement
- Quote Review
- Realization of Risk
Once you see the complete numbers of what it will take to get an app launched, the sun of bloated expectations gets obscured by some clouds so you can finally see risks clearly.
You ask yourself,
Wait… how will I make sure I reclaim my investment? What’s the risk here?
What is the risk?
It varies considerably based off of the context of the situation. Consider the following contexts:
This is my first business. I don’t really know who would want this, but I know it’s a fantastic idea.
We have high unknown risks. The client hasn’t gone through the unique pressures that come with running a business. The client doesn’t know who the target client is. The client has no proof that the business idea is valid.
I’ve never started a business before. But, I’ve shared this idea with a few past clients and I already have a waitlist of 25 people who’ve each paid me $100 to get early access.
Risk is still present. This company could still fail. This client still needs to learn to navigate the pressures of entrepreneurship. However, it’s risk is much clearer - we have early signals that it could be successful.
I’ve started 10 businesses before. And I know the simplest version I want to start testing. I need to move fast because I know other people want to jump on this, but even if it doesn’t pan out, it’s worth exploring because it has high potential.
Again, risk is still present. Just because you’ve started a few businesses before doesn’t mean instant and permanent success. But, those experiences have actually increased this client’s tolerance for risk - the risk of missing out on the opportunity is higher than the risk of investing in the simplest version of the idea and being first to market.
How clear do you need to see?
Research, experience, and testing all make the picture a little clearer.
However, there will always be some fog.
Risk is a certainty. How much risk you can tolerate is something that only you can answer.
So, my clients go one of three directions after realizing the risk:
- Pursue market research and come back later with a refined plan
- Simplify the initial product offering to decrease costs and limit the risk
- Blaze forward
And I support them each and every time.