There comes a time in the life of every person, and every business, when the safest thing to do is take what appears to be an enormous risk -- and when the most "reasonable" thing to do is jump off a cliff.
For individuals, examples include quitting a secure job without firm prospects for new employment, simply because you have outgrown the old one. Moving to a new place where you don't know anyone. Learning a demanding new skill.
Just as there is a time for individuals to jump off a cliff, there is also a time for a business to make a leap of faith. Starting a brand-new business is one example, especially in a new or unproven market. Another example is launching an unproven venture inside an existing business.
Every operator who expands from merchandise vending into amusements, or vice versa, is jumping off a cliff. Every street operator who tries FEC operations, and every "juke-and-pool" vendor who tries merchandisers, is jumping off a cliff.
Every manufacturer who introduces a product or concept is jumping off a cliff. The visionaries who developed the first digital downloading jukeboxes were making a leap of faith when they got started. Today, of course, we all know this class of product has saved the commercial jukebox, and the industry for some, from obsolescence.
Every distributor who rolls out a new type of service, sales or finance program, opens a new branch, or expands into a new line of equipment, is jumping off a cliff, too.
When you jump over a cliff, several things happen. First, you discover something very important about yourself. Are you a screamer or a flapper? Do you simply panic or do you attempt to fly? Second, of course, assuming that you are a flapper ... then you either crash or take wing.
After receiving a few insults from her former husband and business partner, Barbara Corcoran founded her own New York real estate company to prove that she could succeed in business without any help from her ex. In the 1970s, Ms. Corcoran was one of the first to specialize in Manhattan's then-new market for converting apartments into condos. Twenty years later, she launched one of the first real estate websites.
Corcoran, who later sold her company for $66 million, said the biggest lesson she learned is that risk is indispensable for personal and financial growth.
"I've learned that if you jump off a cliff, guess what? You find the confidence while you're falling through the air," she said. "You find a solution. But it's jumping off the cliff with blind faith and stupidity, frankly, that makes you find the solution on your way down."
Another successful business innovator who believes in jumping off "the right cliff at the right time" is financier Jordon Weirs, who started flat broke at age 19 and became a multimillionaire by age 23.
"Everyone has to take risks," Weirs declared. "The CEO's job is to take an educated risk and to ensure that no unnecessary risks are taken. Martha Stewart puts it this way: 'Take risks, not chances.' The difference between a risk and a chance is information and assessment."
The art of jumping off "the right cliff at the right time" is the essence of growth-oriented capitalism. We live in a risk-reward society. The bigger and smarter the risk, the bigger the potential reward. But the real wonder of capitalism is, sometimes a very small risk can lead to an unbelievably large reward.
Examples of "small risk, big reward" are plentiful in the amusement machine industry. In fact, this industry was launched more than 100 years ago by a San Francisco innovator who "jumped off a cliff" by risking a very small investment. His name was Louis Glass ... and he turned Edison's failed phonograph into the forerunner of the jukebox by adding a coin mechanism and prerecorded music. The resulting device, called Nickel-In-The-Slot, became an overnight sensation.
More than half a century later and nearly 400 miles south, a 52-year-old single mother in Los Angeles decided the time had come for her to jump off a cliff. Faith Guthrie had very little business experience when she purchased her first two used cigarette vending machines. But that investment was the crucial first step in a business that evolved into a powerhouse called G&G Amusements. For decades, G&G was the largest jukebox operation on the West Coast.
Is your business is stalled? Are revenues slower and lower than you would like? Maybe it's time to start looking for the right cliff.