Karl Hughes

Karl Hughes

Q&A: Decreasing Risk as an Entrepreneur

Q&A: Decreasing Risk as an Entrepreneur


What is one way for an entrepreneur to decrease risk when starting a business?


Validating your idea by getting paying customers is the best way to decrease risk. If you can get customers to pre-pay for your product or service, that will take a lot of risk off the table.

That said, there are a few other options you can explore:

Build a Customer Waitlist

If you can’t get customers paying for your product before you deliver it, building a list of interested prospects before you launch is a great way to de-risk your business. You can also ask these potential customers what they hope to use your offering for to help you further refine it.

Gain Social Proof

Press, podcast appearances, and flashy launch tactics are one way that entrepreneurs can decrease risk when they go full-time on their company. These signals can be fleeting, but often lend credibility that might help propel early sales.

Gather Investor Support

Raising financial support from investors will take risk off the entrepreneur in exchange for some equity in the new business. Raising money from investors isn’t right for everyone, but it’s a necessary step in many high-tech companies.

Prior Experience

Entrepreneurs with years of previous experience in their industry will have a natural advantage over newcomers to the field. Their network and understanding of the market will help de-risk their new business.

Interested in learning more about decreasing risk? I’ve published a list of my favorite books for startup founders here.

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