What is anything worth? Easy: The amount of fear, pain and suffering you are willing to risk to get it.
But of course we know the math is infinitely more complicated--especially for those suffused with fear, greed and hubris that inevitably fog the equation.
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The crisis on Wall Street, now coursing like a virus throughout the broader economy, is testament to our collective innumeracy when it comes to estimating risk. Complicating matters: a vast web of impenetrable financial contracts putatively designed to "absorb" risk (and reap billions in transaction fees) by sprinkling it throughout the entire financial system. Thanks to such securitization, thousands of people moved into homes they couldn't afford. No cash? No worries--there's plastic. And the band played on.
So the question remains: What's worth the risk? In search of illumination, we asked a slew of strivers--entrepreneurs, politicians, athletes and show-business types--what they consider to have been the riskiest moves of their lives.
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Their responses were as diverse as their careers, but all support the same conclusion: The best results come to those willing to take a chance--an important reminder for entrepreneurs, financiers and political leaders as the global economy braces for even rougher weather.
Several subjects spoke of moments when their careers hung in the balance--the sputtering start-up, a challenging job offer or the decision to walk away from what they knew to pursue far grander dreams.
Some sneered at death, or at least dismemberment. Take Kit DesLauriers, the first person to ski from all seven summits. Of her descent from the top of Mount Everest, she says: "There were no safety nets, no fixed lines established, freezing winds. We had to spend an unplanned night at 26,000 feet, with very little food and water.
The next day, we skied the Lhotse Face, 5,000 feet of blue ice on a 50-degree slope ... At one point, we ran out of oxygen. I kept telling myself: 'Don't sit down and die. Just keep going.' It's really easy to let your mind get a hold of you, but the journey taught me we are much more than our minds."
In 1992, Puneet Nanda, chief executive of Dr. Fresh, maker of oral care products, then based in New Delhi, decided to brave the burgeoning Russian market. "Everybody there had to pay a Mafia fee," he recalls. "These ex-KGB guys controlled everything."
One day, he continues, a new Mafia boss came by and chopped off his office manager's hand; later, thugs roughed up Nanda in his own home. Nanda fled Russia, but not the fight. Dr. Fresh products now sell in 42 different countries--including, just as of August, Russia.
Richard Jackson, chief executive of Jackson Healthcare--which provides clinician staffing, anesthesia management and heath-care IT services for U.S. hospitals--has a story for risk-taking entrepreneurs hunting for suddenly cheap assets. Two years ago, Jackson decided to acquire World Health Alternatives, a publicly traded medical-staffing firm which was then twice the size of Jackson's company.
Jackson recalls: "It was a hairy deal: [World Health] was pulling in $300 million in annual revenue but losing $1 million per month and rapidly approaching bankruptcy; its financial documents were inaccurate, the CEO had quit after some suspicious ethical behavior and the FBI was getting involved. But I believed we had the industry expertise to turn the business around. We paid $43 million for the company in 2006; last year, it took in $18 million on $220 million in sales. It was a huge risk--and an even bigger success."
Michael Chasen, co-founder of Blackboard, an education technology company, went so far as to jeopardize his new marriage. Despite making nice coin at KPMG, Chasen and college buddy Matthew Pittinsky decided to start their own company making software to facilitate instruction at schools that were outfitting fully Internet-wired classrooms and dormitories.
"The biggest risk was telling my fiancé one month before our wedding that I was going to quit my high-paying job to gamble on a 'big idea' with my old college roommate," says Chasen. "Not exactly what she had signed up for."
Still others we spoke with considered smaller, even mundane challenges to carry enormous risk. Case in point: Brian Binnie, whom Forbes.com interviewed for the first iteration of this article in 2007. Binnie piloted the craft that rocketed 69 miles above the earth in pursuit of the $10 million Ansari X Prize, funded by the likes of First USA Bank, a unit of JPMorgan Chase, and author Tom Clancy.
Ironically, the sky-scraping aviator's greatest risk was among the most down-to-earth: speaking in front of a public audience. "The choice between a poke in the eye or the opportunity for public speaking sends me into serious deliberation," admitted Binnie. (Still, an invitation to appear on The Late Show with David Letterman proved too tasty to pass up.)
Who better to assess risk then a guy who gets paid big bucks to do just that? When asked last year about his greatest risk, gold-plated venture capitalist Tim Draper, co-founder of Draper Fisher Jurvetson, recalled not one of his sizable bets on a promising (but by no means proven) young company; rather, he mentioned the time he mustered the courage to board an unknown, unsaddled horse.
"I don't remember all the risks I have taken, since if they worked out, they were no big deal," said Draper.
That's one way of looking at it.
