Balancing Risk and Innovation: A Tale of Two Mindsets

I’m fortunate to be a recognized cybersecurity and risk professional with partnerships in venture capital firms. I frequently advise startups across multiple industries and spend a lot of time listening to their plans to disrupt and innovate. It’s easy to find myself caught between the entrepreneur's and the cybersecurity risk practitioner's mindsets, though the two don’t often perceive risk in the same way. Heck, I’ve even heard entrepreneurs say, “No revenue, no risk.” Some of you are likely nodding in agreement, while others may have just felt a shiver run up your spine.

Below are some risk categories I often discuss with entrepreneurs (CxOs, VCs) and risk practitioners (CISOs, security professionals). My intent in writing these down is to present both points of view, sharing the “opposing” perspective and providing some insight. Risk, cybersecurity, and project management practitioners may already be familiar with these categories, sometimes referred to as the “4Rs of Risk.” I’ve added an additional two categories to the entrepreneurs’ list while retaining the original four, which I think practitioners are less aware of.

Risk Practitioners’ (CISOs, Security) 4Rs of Risk:

• Revenue
• Reputation
• Resilience
• Regulation

Entrepreneurs’ (CxOs, VCs) 4Rs of Risk:

• Revenue
• Reputation
• Regret
• Remorse

🤖 TL;DR: Entrepreneurs and cybersecurity risk practitioners often view risks differently. While both value revenue and reputation, they diverge on other critical aspects such as resilience, regulation, regret, and remorse. Entrepreneurs prioritize rapid growth and momentum, sometimes overlooking potential long-term risks, while risk practitioners focus on sustainability, compliance, and protecting the business from threats. Success lies in balancing bold innovation with thoughtful risk management—making informed, decisive decisions with a clear understanding of the associated risks.

BOTH LISTS

• Revenue: Without revenue or a path to it, a business cannot exist. This one is obvious, so I don’t want to spend much time on it. It’s worth noting that this risk, along with reputation, appears on both lists. Instead of talking about revenue, let’s look at the different common Points of View (PoV).
  • Risk Practitioner: Current and future revenue can be at risk. We are aware that without risk, there can be no reward, but we need to balance risk.
  • Entrepreneur: Only current revenue can be at risk—if there is any. We are in a startup/growth stage. We have nothing to lose and everything to gain—go, go, go!

• Reputation: It’s been said that in the end, all you have is your reputation, and that applies to companies too. A company’s reputation can be impacted by many factors, including bad press, breaches, etc. Reputation is second on both lists to revenue, so let’s again focus on the different, common PoVs:
  • Risk Practitioner: Future revenue and current agreements are at risk, as well as “my/our” personal reputations. We need to balance risk for everyone’s sake.‍
  • Entrepreneur: Any short-term hit to the company’s or any individual’s reputation will be overshadowed by the success of the company as a whole. Our successes will drown out any failures.

RISK PRACTITIONERS’ (CISOs, SECURITY) LIST

• Resilience: Resilience and availability are not strangers to risk practitioners. Keeping the product, the infrastructure, and the business up and running is a risk that we tackle day in and day out. It’s ingrained in everything we do, with “maintain availability and business continuity” being part of our core competencies. Entrepreneurs should know that risk practitioners take threats to the entrepreneur’s business very seriously and want everyone, including the business, to succeed.

• Regulation: Regulations—whether legal, financial, industry-specific, or governmental—are an essential part of doing business. Ignoring them can lead to severe consequences, including loss of revenue, reputation, resilience, and even personal freedom (e.g., jail time). Some entrepreneurs may view relaxed financial practices, weak cybersecurity, or withholding breach reports as acceptable risks in privately held companies. However, this perspective very often conflicts with that of risk practitioners, who, like accredited medical and financial professionals, adhere to a strict code of ethics. This ethical commitment to protecting society, acting honorably, and upholding the law can put practitioners at odds with entrepreneurial risk-taking. This difference in mindset is worth a deeper conversation between opposing viewpoints.

ENTREPRENEURS’ (CXO’s VC’s) LIST

A lot of a leader’s job is focused on building and maintaining energy and momentum. You may have already noticed a pattern while reading this. Risk practitioners tend to rely on things that can be measured, we are trained to do so, while entrepreneurs rely more on the intangible during the early stages of a company. Entrepreneurs know that it isn’t always about metrics, the score, or something you can count. Sometimes it’s about the things you cannot. It’s about the feelings, the motivation (good and bad). Regret and remorse are two negative emotions that put a business’ momentum at risk. While both are nearly synonyms for sorrow, we’re going to use them below in a more nuanced fashion.

• Regret: Regret in this context is associated with a missed opportunity—such as when a company decides not to pursue a particular deal or fails to close a sale. This regret stems from the realization that the opportunity could have led to financial gain or market advantage, but the decision or execution didn’t yield the desired result. It’s not just about revenue or numbers in a column; it’s about lost velocity or wasted energy. Entrepreneurs and startup veterans know that you have to quickly shake this feeling off—or better yet, never experience it—but for some, this must be a learned discipline. Culture and experience often help mitigate this risk; in fact, the pace of a company can mask these feelings. When everything is moving at hyperspeed, it can be difficult to focus on perceived failures.

• Remorse: Remorse is grander in scale than regret. It can arise when a company had the chance to do something meaningful or disrupt the market but failed to deliver or chose a path that was either ethically questionable or misaligned with the company’s values. If the decision leads to negative consequences—such as harming the environment, betraying customer or investor trust, or contributing to social issues—remorse may follow. This remorse is tied to a deeper recognition of having made a choice that led to final outcomes or went against moral or ethical principles, not just missed profits or growth in a period. Remorse can erode confidence—it’s “failure in a bottle.”

I’d be lying if I said I’ve never felt regret and remorse; most of us have at some point. It’s part of the process. How does one mitigate these feelings? You make mistakes, learn from them, and teach others in the hope they will too. But beyond that, it’s about making decisions—quickly, confidently, decisively—with a clear understanding of the associated risks. I know that can be difficult, and for some, it’s easier said than done.

The dance between risk and innovation drives progress. Entrepreneurs and risk practitioners may view things differently, but their goals align in the pursuit of success. By acknowledging and respecting each other’s perspectives, you can build a resilient business that thrives with integrity. Take the leap, but do so with eyes wide open—the future belongs to those who can balance boldness with caution.

In the end, success isn’t just about taking risks but about taking the right risks. Let’s build the future with a balance of bold innovation and thoughtful caution.

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