Entrepreneurial casino - rolling the dice
Sure, there is risk in any kind of venture, whether it be incremental investment in a long-running and "proven" business, or an attempt to commercialize a "new idea" or enter a radically new market, but the question is how to characterize and categorize these risks so that we can properly compare and evaluate them. A "bold" move will typically have a much higher risk of failure than a "conservative" move, but when a solid wall looms ahead that may block an existing business or business model the tamer move may in fact dramatically increase the risk that the business will not survive at all. Sometimes, but not all of the time. Tough call.
With an entrepreneurial venture we are by definition invoking a significant higher level of risk as we try to make a big splash. OTOH, that big leap may have a higher probability of surviving in the longer-term if it can make it beyond the "infant mortality stage." That can be a very wise tradeoff, but it also means that the venture can begin to look a lot more like a casino bet than a rational business decision.
We can also hedge our bet by leading with a smaller splash that is calculated to have a more robust appeal to a smaller audience. That can dramatically reduce short-term risk, but may also dramatically reduce the chance of retaining the degree of boldness to later break out of the niche to a much broader market. Essentially, you are not reducing total risk, but simply shuffling it around and making an implicit statement about your depth of vision. Figuring out how to balance the short-term and the longer-term is a core challenge.
Sure, you can always reduce the chance of a loss on a casino bet but placing a smaller bet, but it is still a casino bet at heart.
And if you feel that you have hedge enough to eliminate virtually all risk, you may ultimately find that you have eliminated your chance of a reasonable return as well.
Evaluating, balancing, and hedging. Good stuff, but at the end of the day you still have to finally roll the dice and let reality judge whether your reasoning is valid.
Timing is a factor as well. Sometimes being earlier is better, but being too early can be as risky as being too late. If an emerging market is not "ready" you may or may not have the resources to wait or force readiness. To a large extent this may be a matter of personal preference, but it does have implications for your risk profile as well. Either way, the dice must still be rolled.