I always joke that entrepreneurs are not risk takers. If we knew the risk that we take, there is no way we would do it. Mostly, it is just too crazy.
This morning, there was a study reported in the Chicago Tribune about how testosterone may fuel people who want to take risk and affect the financial returns associated with them.
“In a study published Monday, British researchers found that higher amounts of testosterone [for traders] in the morning translated into bigger returns at the closing bell, indicating that the same hormone behind chest hair, deeper voices and survival in the wild can work magic on a balance sheet too”
Most interestingly, professors at Stanford and Northwestern “showed erotic pictures to male college students, who then were asked to choose between two investments. Those who saw the sexualized images were more likely to pick the riskier investment, whereas those who saw photos of rotten food, for example, went with the safer investment.”
Is this why Las Vegas does so well? Sure sounds like a potent mix. Note that the study does not talk in terms of profitabilty. While typically the greater the risk, the greater the return but also the greater potential for the loss. If we take the risk, we need to be able to handle the outcome. Testosterone may get in the way of this when we get all pumped up about an idea or situation.
I talk in Bounce! how we need to look at Process over Outcome. Sometimes we get so focused on what the potential winning outcome can be, we forget about the step by step process we need to get to more successful outcomes. If we focus on the process, the outcomes will take care of themselves.
