Successful entrepreneurs tend to be willing to take risks. In addition to the risks facing any entrepreneur, life sciences entrepreneurs must deal with the unpredictability and uncertainty of science. As scientists know, research may not go as expected. Additionally, many products in the biotechnology/biomedical industry have a long development time, as long as 15 years. The many steps along the way need to succeed for the product to reach the market. On top of that, many biotechnology/biomedical products need to pass regulatory requirements.
People vary in their risk-taking comfort level, from thrill-seeking at one extreme to thrill-avoiding at the other extreme.1
- Thrill-seeking: Liking high intensity, unpredictability, and novelty.
- Thrill-avoiding: Liking the predictable, low-key, and familiar.
The DOSPERT, a validated risk-taking assessment, can help you self-evaluate your comfort level and see how you compare to entrepreneurs vs. non-entrepreneurs.
Leslie’s answers to questions taken from the DOSPERT risk-taking assessment are described below. The questions cover social, recreational, and financial risk, which are the domains that correlate strongly with entrepreneurship.
Case: Leslie Bowen, PhD
Description: 41-year-old Leslie Bowen is an associate professor and neuroscientist with an idea for a product made using a novel approach to laboratory-grown neurons with potential clinical applications. She thinks it will be marketable.
Scenario, Part 2: In this scenario, Leslie self-evaluates her risk-taking tendencies by answering questions from the Domain Specific Entrepreneurial Risk-Taking scale (DOSPERT) (Blais & Weber, 2006). The questions ask if you would engage in the described activity or behavior in various situations.
Leslie’s responses to the DOSPERT are marked with checkmarks. Questions are marked for being in the social (S), recreational (R), or financial (F) domain.
|Admitting that your tastes are different from those of a friend (S)|||
|Going camping in the wilderness (R)|
|Betting a day’s income at the horse races (F)|
|Investing 10% of your annual income in a moderate growth mutual fund (F)|
|Disagreeing with an authority figure on a major issue (S)|
|Betting a day’s income at a high-stakes poker game (F)|
|Investing 5% of your annual income in a very speculative stock (F)|
|Going whitewater rafting at high water in the spring (R)|
|Betting a day’s income on the outcome of a sporting event (F)|
|Investing 10% of your annual income in a new business venture (F)|
|Taking a skydiving class (R)|
|Choosing a career that you truly enjoy over a more secure one (S)|
|Speaking your mind about an unpopular issue in a meeting at work (S)|
|Bungee jumping off a tall bridge (R)|
|Piloting a small plane (R)|
|Moving to a city far away from your extended family (S)|
|Starting a new career in your mid-thirties (S)|
Leslie’s mean scores for each domain of risk-taking
- Social risk: 5.5 out of 7 (Mean for entrepreneurs is 5.4)
- Recreational risk: 3.8 out of 7 (Mean for entrepreneurs is 3.8)
- Financial risk: 2.5 out of 7 (Mean for entrepreneurs is 3.5)
Interpretation: Leslie’s mean scores are comparable to that of entrepreneurs for social risk and recreational risk. However, she scored lower than entrepreneurs generally on financial risk-taking.
(Blais & Weber, 2006; Curry, 2014)
Discussion of Leslie’s Risk-Taking Assessment Results
Scenario: Laila Robinson, from the Technology Transfer Office, and Leslie have a follow-up video call after Laila reviews Leslie’s results.
Hello, Laila. I’m here to discuss my risk-taking profile and whether entrepreneurship is a good fit for me.
Hello. We can review your risk-taking profile and use it to look at some ways you can use your results to your benefit.
Your risk-taking survey results show that your likelihood of engaging in risk depends upon the type of risk. That’s true for most people. Your score for social risk-taking is your strongest.
Yes, I’m willing to speak up for things I feel are important, even if my comments are risky.
Great! Social risk-taking has the strongest correlation with entrepreneurial success. That is a strength you can use in promoting a business. You are similar in recreational risk-taking to entrepreneurs on average. However, your financial risk-taking score was much lower than the average entrepreneur’s. So the financial aspects of entrepreneurship may feel risky for you.
I think that’s true. If something goes wrong socially, I can recover, and I do all right in risky recreational pursuits. But if I lose my money, I won’t be able to meet my family’s basic needs. Small businesses fail fairly often, so the risk seems real.
It’s good to be clear about where you stand with respect to each type of risk.
Does this mean I’m not cut out for entrepreneurship?
Not necessarily. There are ways to legally protect your personal finances by separating them from the business. But I understand you may not want to invest a lot of effort and have it come to nothing since some businesses do fail. You might prefer options that involve less risk, such as selling your idea.
I don’t want to let someone else develop my idea either.
Based on your survey responses, you most want to avoid complete uncertainty of finances and need some feeling of control over them.
Yes, I don’t know a lot about financial things, but have a general understanding that starting a business is risky.
We often see more risk when we don’t understand something or lack the skills needed. Your willingness to take financial risks may change as you gain more financial skills.
That is true. I guess what I need to consider is whether I am willing to spend time developing more financial skills or want to put that time and effort into my science work. I wonder whether the potential rewards are worth it if I branch out into business.
One more thing to consider is that you don’t have to be good at everything to be an entrepreneur. You can form partnerships to complement your strengths—in your case, someone with financial skills.
That makes sense and makes the idea of entrepreneurship sound more like a possibility to me.