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.