Wise Risks

Richard Branson has had a relatively flamboyant entrepreneurial career.

Early on, he signed the Sex Pistols, Phil Collins, the Rolling Stones and the Spice Girls to Virgin Records deals.

Later, he took on British Airways’ monopoly over air travel in the UK.

His career timeline is also dotted with stunts, including attempting to fly around the world in a hot air balloon, drove a tank down Fifth Avenue in New York City, and

Counterintuitively, in his memoirs, Branson claims that he has always been extremely preoccupied with risk and was meticulous about avoiding ruin.

How does one square these two seemingly opposite indicators?

By diving into the details.

When Branson launched Virgin Airways, he leased all the jets used to transport his customers. Each lease has a one year escape clause where Branson could return the jets without obligation to pay further.

Would he have lost some money and faced public scorn? Absolutely. But, he could go forth boldly to the field of entrepreneurial competition with the knowledge that his downside was capped.

Set up more asymmetric deals. Downside capped if you lose and stratospheric gains if you win.

Tesla and Edison had an epic entrepreneurial rivalry. Watch this video to learn about the deal Tesla took for his technology and how Edison hired, then competed with his inventing rival.

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