Reflecting on risk aversion

I’m more careful about risks than I was at the beginning of this experiment. I see more negative consequences when projecting the results of decisions, and I perceive more volatility. I tend to overestimate the probability and impact of negative possibilities, and I’m conservative about taking advantage of opportunities.

This is interesting to me because I expected the opposite result when I started this experiment. A safety net should enable me to feel comfortable with taking more risks. In particular, I would probably have expected to take more risks in terms of:

  • Tools: get better at seeing the possible improvements or new capabilities opened up by tools
  • Education: learn faster with other people’s help
  • Networking: connect with and help more people
  • Creation: make and ship more things
  • Delegation: working with other people to get even more done
  • Commitment, schedule: plan for larger things, and hustle in order to get more things done

Hmm. Come to think of it, even my perception about increased risk aversion is perhaps inaccurate. Over the past two years, I’ve learned a lot from taking risks in terms of business models, sales, delegation, and so on. Let me take a closer look at the categories I mentioned to see if I can come up with counterpoints:

  • Tools: Small hardware, software, and network upgrades have worked out well.
  • Education: I’ve learned that I can learn a lot from books, experimentation, and connecting online, which is why paid courses and conferences haven’t really been on my radar.
  • Networking: The Emacs Chat podcast is a new thing for me, and I’m slowly getting the hang of it. I’ve been moving to getting to know people online instead of focusing on in-person connecting, and I like connecting with peers or people I can help rather than trying to connect with high-flying celebrities. I think I like the direction I’m going, actually.
  • Creation: PDFs, guides, and e-mail courses are new for me. That’s working well. Free/PWYW helps me reduce risk and avoid being anxious about satisfaction.
  • Delegation: Not as good as I could be when it comes to assigning tasks, but still better than nothing.
  • Commitment, schedule: This is probably where the biggest difference is. I’m less inclined to schedule things, and I try to minimize my commitments in terms of time and energy. Every so often, I think about whether I should be hustling more, but I like my current pace.

Oh, that’s interesting. I think I’m surprised by the way I’m getting better at saying no, which is apparently a very useful skill. I’m getting better at not feeling guilty about it, too. I want to make sure I’m saying yes to some things, what I’m saying yes to is worth it for me, and that I’m not prematurely closing off things that do want.

How do I want to tweak this? I’d still probably minimize the number of commitments. I might take more notes on decisions. That would give me a better handle on risks that worked out well and risks that didn’t, because what I recall is biased by my mood. What I take notes on is biased by mood as well, but it’ll be easier to find contrary examples.

Also, when I find myself possibly overestimating the likelihood or impact of negative possibilities, I can sanity-check my perceptions with research and with other people. Hmm…

It’s kinda fun noticing when your brain is acting a little weird. =) We’ll see how I can work around things!

  • I think getting older generally increases risk aversion. Perhaps from experience, plus having more to lose.

    When I was 20, I really wanted to get an engineering internship, so I had my college’s internship office send out my resume to their contacts. A few months later, just before the Fall semester, I got a call for a phone interview and was offered an internship. Taking the semester off school, that gave me one week to arrange for an apartment by phone, drive 500 miles to a state I had never been before, live in a city I had never visited, and work for a company I had never heard of (before the phone interview). The nearest person I knew well would be 300 miles away. I spent the next four months sleeping on an air matress in an empty apartment since I could only take what would fit in the trunk of my sedan.

    That risk really paid off and changed my life. However, now almost a decade later, I wouldn’t do something as drastic again. I would approach the sitation much more cautiously, exploring more options before going deeper. Perhaps it’s because life is more complicated: I’m married now, have pets, and I have a lot more stuff. I also prefer a somewhat higher standard of living, and I have a more significant stake in my local community than when I was 19. It would seem I’m much less willing take take risks.

    • Yeah, I think you might be right. I was fine with packing a bag and visiting a research lab or a conference in a different country before (heck, moving countries!). Now, married, with cats, preferring home-cooked food over restaurants, etc… Staying home is pretty darn nice. Not that I’m really afraid of the loss, but that I see more alternative approaches that can give me the benefits I want with fewer costs. For example, conferences might be a way to learn from people and share what I’m learning, but the connecting over the Web is pretty cool too. =) (Like this conversation, and the one we’re having soon!) Thanks for sharing!