Contributed by Dr. Gleb Tsipursky.
One of the biggest dangers for entrepreneurs comes when their enterprise grows from being a small shop of 10 people to a midsized company of 100 or more. Entrepreneurial decision-making must change to account for this growth, but it often doesn’t due to our desire to avoid losses.
To illustrate why, let me tell you a story.
It’s your lucky day! You meet a kind stranger who offers you something for nothing. No tricks, really: You’re getting a free lunch.
She gives you US$45. Then she asks if you want to keep that money or give it to her in exchange for a coin flip. If it lands heads up, she’ll give you US$100. If it’s tails, you get nothing.
Which do you choose? Do you want US$45 cash in your pocket or are you willing to take a chance with the coin flip? Decide before reading further. (more…)