This blog might seem like clickbait for the technically-minded who expected a sermon on how to build highly-available data communications networks. Not so. I'd like to share my thoughts on risk management instead, and for the techies, I'm sure you'll see some obvious parallels.
I want to frame the discussion around three types of risk. Think about it from a business perspective. For this example, I'll assume that in actuality, you are someone else's full-time employee. What customers do you have? Probably just one; your employer. How much of your annual revenue comes from that customer? Probably all of it. What is the impact of a competitor winning this business away from you? Staggering, as you'd be on the street. I'll call this concentration risk. What's better, one revenue stream of $100,000 per year, or five revenue streams of $20,000 per year?
In case it wasn't clear, I'm claiming that full-time employment by itself is a single point of failure and is risky, even if the job is "stable" (whatever that means). Let's assume you decide to author some books on the side. What's better, 10 books from one publisher or 2 books per 5 different publishers? I'd again argue the latter is the smarter choice. Suppose you choose the first option, as many authors do. Though you've augmented your full-time salary with some passive royalty income, you have exposed yourself to platform risk. Suppose your primary publisher folds. Suppose the content is video-on-demand and the publisher has a long-term web outage. Suppose the publisher has a public relations disaster unrelated to you and their brand sinks. Where are your residuals now?
Ever wonder why I produce small volumes of content across a large variety of media channels? For example: recorded training, live training, regular text books, and soon to be audio books. All of these delivery methods are negotiated with different companies with different payment terms. I can't always get paid quickly, but many great deals won't pay up cash front. I reduce my credit risk by properly managing my cash flow. The last thing I want is most of my revenue stuck in accounts receivable with a dying, insolvent customer. This is all part of a strategy to address the market from a variety of avenues and business relationships. If you are a niche specialist, you don't necessarily have to diversify your skills, but expand your sales scope and your brand widely.
Like Rich Dad teaches us, a full-time job with a big company is risky. This blog summarizes the three risks I work hard to avoid. Naturally my top risks will change as the business landscape changes. Yours should too.
Subscribe by adding "www.njrusmc.net" to your RSS/Atom reader!