Is it a gamble when an individual, viz an entrepreneur, starts a new business ? In a way it is, in a way it is not. Who is an entrepreneur and what does he do?
In my mind, an entrepreneur is a person who has his eyes open for new business opportunities and when he sees them, he grabs them and tries to make a success of the business he creates on the base of these opportunities.
Benefits and drawbacks
He takes a risk in starting this business because there is no guarantee whatsoever that he will succeed. But that is a chance that he is willing to take. But here again he does not take the risk blindly. He works out the benefits and drawbacks of the potential business, he studies the markets, he takes into account his past experience, he discusses the venture with his business advisors, his financiers and other stakeholders and only then does he start off. He is taking a risk, after calculating pros and cons and therefore can be called a calculated risk-taker.
Yes he does depend on luck and chance also but this luck is tempered with information that he has collected and used to enter the fray. So it is a gamble but in a limited way.
Trusts totally to luck
A true gambler plays blindly. He has no idea which way the dice will fall. This is true of gamblers of any kind. He trusts totally to luck, there is no “information” or “data” that can indicate which way his luck will go. It is said that in casinos and other gambling houses, the house always wins –because the system is fixed in such a way that in the long run, a gambler cannot win. He can only make money off and on, not on a sustained basis. The risk therefore that a gambler takes is 100% chance.
The entrepreneur takes a risk when he decides to go ahead with a new venture. If he stops taking risks he stops being an entrepreneur. He cannot stop even after the business is up and running. He has to constantly gauge the market, see that his funds are sufficient, that his employees are motivated , that his suppliers are reliable, that his competition is not trying to kill his business, that his reputation is not being ruined – each of these constitutes a risk and a gamble of sorts.
Stomach for risk taking
An entrepreneur cannot succeed unless he has the stomach for risk taking and for failures. Some of his gambles will pay off, some will not. But the minute he stops taking risks, stops taking a chance, he stops being an entrepreneur. But unlike the gambler, he goes into the boxing-ring with some knowledge of what could happen. The markets are his to tap and exploit if he has the required knowledge and experience and expertise. The greater his background research, the more work he has put in before setting out of his entrepreneurial journey, the greater are his chances of succeeding.
So while starting a business is in some ways a gamble, it is a protected gambling because the entrepreneur can safeguard himself and his business against some of the possible losses because of the strategy that he is working with based on information, experience and knowledge.