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Chapter 10. Managing Risk and Uncertainty > Risk Reduction Strategies

Risk Reduction Strategies

Successful technology entrepreneurs often manage risk and uncertainty by engaging in three activities to reduce the risk that their new ventures face: searching for information, minimizing investment, and maintaining flexibility. You will need to engage in these risk reduction strategies to be successful.

Searching for Information

You need to search for information before taking action if you want to reduce the level of risk in your new venture. Unsuccessful technology entrepreneurs often fire before they take aim. As a result, they bear unnecessary risks that could be easily avoided by searching for additional information. For instance, instead of figuring out what type of manufacturing equipment is most appropriate for producing a new product, the typical unsuccessful entrepreneur goes out and gets the standard equipment used in the industry and “gets started.” If, as is sometimes the case, the equipment chosen needs to be modified heavily to make the product, the entrepreneur has now set him or herself up to bear the risk that the modification cannot be done correctly or in time to meet a market window.


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