Risk


This post is by Zach Shulman from ithaca VC


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Sorry for the big gap in posts!

As a bunch of you probably know, James Holzhauer is on a streak to set the record for Jeopardy game show wins.  I just read that the show picks back up on May 20th with “live versions” (which are actually taped).   I do not watch Jeopardy at all.   But, the news stories have caught my eye so I have read a few of them.   The other day I came across a print interview that included this question:  Would you describe the traditional way of playing “Jeopardy!” as overly risk-averse?

Holzhauer’s answer: “I would definitely say it’s too risk-averse. The funny thing is, my strategy actually minimizes the risk of me losing a game. There’s times in a football game where a team goes for a big TD pass. If you don’t take a risk like that, you’re not to win. Really, the big risk is never trying anything that looks like a big gamble.”

In case you don’t know, a core part of Holzhauer’s strategy is to go after the $1000 “answers” first so that he builds up a pot to bet when he hits a daily double.  This is why he is the fastest money winner in Jeopardy history.

Anyway, I loved his answer as it made me think of many entrepreneurs – they take risk all the time!  And guess what, so do VCs when they bet on those entrepreneurs!  Risk is a given and taking risks is required.