Protecting What You Have vs Risking for More

I think we are all wired for risk aversions. Daniel Kahneman got a Nobel Prize on Prospect Theory for this. But we are all averse to losses it is just the way we are wired. Why gain something more?

This I believe is a condition of our view that loss is something bad and gaining something puts us into a new normal rather quickly of what success is. We can make more but if more is just what we are conditioned to a loss feels worst.

One of the things I am trying to train myself as of late is to go against prospect theory. How can I grain while reducing my loss.

As a SMB owner one of the things I realize is that I allow myself to do too many things. The following needs to be done instead to ensure that risk is being minimized:

  • Say no to things. Somethings are not in your wheelhouse and are not your competitive advantage say no to doing those.
  • Focus on fewer things. The fewer the things you do the better you will be able to do them well.
  • A business has a lifetime. Businesses do not need to love forever nor do they need to have the same owner. Figure out how to build something where if it doesn’t work out have someone else own it.

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