Why is research so risk averse?

This post started life as a response to Ellen Woods’ well thought out Greenbook post on the paradox of risk, which you can read here. However, here is an extended version of my thoughts on the difference between the herd and good for the individual, in terms of risk, risk avoidance, and its implications for marketers and market researchers. In this post I want to concentrate of two issues: 1) the difference between what is good for the economy and the individual, and, 2) the difference between the short-term and the long-term. The difference between what is good for an economy and what is good for an individual. Most innovations fail, most entrepreneurs fail, most new products fail – the failure rate is typically quoted as being in the 80% to 90% range. Given these high failure rates, the logic for each individual entrepreneur is that they should not risk everything on some new change, idea, or innovation. However, the benefits to the economy of the few innovators and entrepreneurs that succeed is massive. Indeed, I think the number of entrepreneurs in the US is one of the keys to its success over the last 100 years – a success […]