Aug 242011

Are Entrepreneurs Gamblers?

I often get asked the question, “Are entrepreneurs gamblers”?  I think how you answer this question has everything to do with how you define “entrepreneur” and how you define “gambler,” so let’s start there.

For me, an entrepreneur is someone who starts a business with the intention of growing it, in order to make a profit.  Further, an entrepreneur takes pleasure in creating something that previously didn’t exist and growing it into something that “matters”.  Clearly, it is possible to be “entrepreneurial” in non-profit organizations and in for-profit organizations that already existed before you showed up – there are various types of entrepreneurship.  The simplest definition of an entrepreneur is “someone who looks for business opportunities and invests time, money and/or other resources to take advantage of those opportunities”.  You most often hear the word “entrepreneur” used in the case of startup businesses, but that is not the only scenario where the term is applicable.

Now, a “gambler,” for me, is someone who places bets, hoping to win by chance, usually against the odds.  There are various types of gambling, not all of which happen in a casino, but even within a casino, there are many different forms of gambling.  If we look at a casino as the place we most often find “true gamblers,” we quickly realize that, usually at least, when they’re playing against the house (the casino), in such games as blackjack, craps, roulette, etc, they have to get quite lucky to win on any particular occasion.  Further, if instead we look not at a specific occasion, but over a period of time and several occasions, unless they are cheating or exploiting some other advantage that is against casino rules, their probability of winning is almost zero.  The games were created that way, by the casinos.  No wonder the odds are stacked in favor of the house.

Ok, so back to the question:  Are entrepreneurs gamblers?  Based on the definitions I laid out above, I think you’d have to say, no, entrepreneurs are not gamblers.  Entrepreneurs may count on luck just as gamblers do, but I don’t think we can say that over time entrepreneurs’ probability of succeeding is almost zero, as it is for gamblers as defined above.

So if entrepreneurs are not gamblers, what are they?  They are risk takers.  To be more specific, good entrepreneurs are calculated risk takers.  They see an opportunity and like gamblers, they place a bet.  They bet their capital, their time, and other resources that they will be able to exploit the identified opportunity and create a successful business based on it.  They do depend on luck to some extent, but if they are experienced and/or have good partners and advisors, they know how to “stack the deck” in their favor, so that they don’t have to depend on luck so much.  I guess if you wanted to compare them to gamblers, you could compare them to those gamblers I mentioned above who use “card counting” or other techniques that go against the house rules.  They do not enter the game, or in the case of entrepreneurs, the venture, without some advantage or set of advantages that they, and their investors if they have any, believe will allow them to succeed in that particular business.

Frankly, I don’t really like hearing entrepreneurs compared to gamblers, at least not given the definitions I provided above.  I don’t think such a comparison does the entrepreneur, at least not the “good” entrepreneur, justice, as it has too many connotations of “shooting from the hip” and just hoping to get lucky.

As one of my close entrepreneur friends says, “without risk, there is no reward”.  It is inevitable that anyone who dares to initiate anything, including a new business venture, is taking a risk.  They are “risk-takers,” by definition.  They’re not “gamblers” though, at least not per my definition of the word.

If you are just starting on the entrepreneurial path, or even if you’ve been on it for a while, make sure you’re a “good” entrepreneur – a calculated risk taker, not a gambler.

P.S. You may have seen me compare entrepreneurship to a poker tournament elsewhere.  This is because poker is not a game you play against the house.  It is played against other players.  It is still a form of gambling, but not the type of gambling I referenced above.  While it absolutely does involve some luck, it also involves strategy and allows you to be more of a “calculated risk taker” than games against the house.

I look forward to your thoughts and comments.  Please leave a comment below or in the top right corner of this post.

Paul Morin

  • Yup I agree with the title that entrepreneur are Gamblers as running a business is a risk..And running a successful business is a biggest gamble you play with your money…!!

  • If we define “gambler” simply as “risk-taker,” I agree. There is no denying that by starting and running a business, one is taking a risk!

  • WG Cinema

    I often find myself justifying the fact that having a unique vision and trying to build something from nothing, a business venture, in a specific industry, with a specific strategy and where there’s clear opportunity for growth, and essentially, going down the road less travelled, or where no-one has ever travelled before, is NOT gambling!! Entreprenuership takes a specific, unique and special mindset, yes, but it is far from the gambler’s mindset…

  • Agreed, Arturo. It is a unique mindset, but it’s not a “gambler’s” mindset, at least not the way I define gambler in this article. Clearly starting and growing any entrepreneurial venture involves taking risk. You are not a gambler. You are a calculated risk taker with a vision. You have a much higher probability of “winning” over time than the stereotypical gambler who keeps hoping for a miracle playing against the house and against stacked odds.

  • WG Cinema

    Exactly right, Paul! Thanks for making so much sense out of the psychology behind the entrepreneurial mindset!

  • Sure, Arturo. As you know, it’s not a simple mindset! But for the “good” ones, it’s all about calculated risk taking.

  • I agree 100% with you, Paul. Some gamblers want to be called entrepeneurs though. = )

  • That’s true! And some gamblers ARE entrepreneurs! 🙂

  • A pleasure to read, Paul.
    Too many folks (many of whom want to adorn themselves with the mantle of entrepreneurship) lack sufficient understanding of the needs to discern the risk/reward concept. It’s why so many ersatz entrepreneurs believe that the $ 9.99, $29.99, $297 (or whatever) program that hucksters sell will, indeed, confer upon them instant success.
    We need trained minds (no, not PhD’s or MBA’s, although some of them probably are qualified) to develop their visions, create their missions, and accomplish their goals. All the while knowing the risks involved in achieving these goals- which also makes the success developed that much more relished. It serves as proof that the risk was calculated properly and that the path- even if it were modified and altered by life’s and business’ exigencies- was duly calculated.

  • Thanks for sharing your thoughts, Roy. You touch on a key reason that I wrote this article: too many people don’t fully understand that risk taking is at the core of entrepreneurship, but gambling is not. I didn’t touch on the concept of instant success in the article, as you did in your comments, but I think it’s a *great* observation. The gambler mindset is highly correlated with the appeal of programs that promise “instant success,” whereas the calculated risk taker (an “entrepreneur” by my definition) understands that the success will not be instant. They understand that they are charting a risky course, taking a journey really, and the final destination may be where they originally thought, or it may be somewhere else. All the while though, they are not expecting to “beat the house,” rather they are carefully navigating a path and course correcting as they go. Thanks again for your comment. It was thought-provoking. Paul

  • John

    I would like to suggest that if you are a new gamblers then avoid to invest in bet. Just do practice or see first how to play what are the rules and get some experience from other gamblers and then try to pay with bet. There are various betting games such as casino, poker, bingo etc. I like to play bingo, poker etc. for betting purpose, because these are very simple and easy to play.

  • betting sites uk

    Correctly said that “without risk, there is no reward”. As the whole life is a game of risk. We don’t know what will happen next, but then also we try new things. We can call entrepreneurs as a gambler because like gamblers they also take risk to gain something. In short, we can say that all these things totally depend on luck.

  • Yes, life is a game of risk and without risk, typically there is no reward. I wouldn’t say that all these things totally depend on luck though; in most endeavors there is at least some element of skill and we can turn “luck” in our favor by developing our skills and awareness as much as possible.