In his enormously entertaining and insightful interview on the Kevin Pollak Chat Show, director and actor Eli Roth (Hostel, Inglourious Basterds, Hemlock Grove) made an important point about the movie business, and why it was hard to work with many studios:

“People don’t make movies they think will be successful; they make movies they think won’t fail.”

Studio executives have a great job–they get to collect fat salaries, take pitches from directors and producers, and decide which pitches to green light.  It takes so long to make movies that as long as the decisions they make are justifiable, they can keep their jobs for years, even if all their movies eventually flop.

Sound familiar?

Many of the same incentives affect and infect the venture world.  VCs hear pitches all day long, but are ultimately responsible to their Limited Partners.  Take a risk and lose, and you’re in for harsh criticism.  Avoiding risks might kill your returns in the long term, but it makes your life easier in the short term.

As an entrepreneur, you need to understand this effect.  The feedback you get will often focus on risk mitigation, and avoiding failure.  But you need to remember that in the startup game, the results are binary–either you make money or you don’t.  If you make money, it doesn’t matter how eccentric you are (cough…Zuck…cough), you’ll be hailed as a genius.  If you lose money, it doesn’t matter how much sense your decisions made at the time.

Do what you think will make you successful; there is no way to eliminate all chance of failure.