The Risk-Takers: Businesses Who Gambled & Succeeded

When opportunity comes knocking, how do you respond? Do you play it safe or do you take a risk? For a lot of business, a risk-averse attitude seems like the best policy, but there are times when a well-calculated risk might be the only thing standing between you and success. In this article, we take a look at five companies that took risks and became better businesses for it.

In 1999, two grad students, Larry Page and Sergey Brin, owned a little start-up site called Google. In an effort to unload their pet project and focus on their studies, they approached Excite's CEO, George Bell, and attempted to sell their creation for $1 million USD. Though Bell negotiated them down to $750,000, he ultimately decided not to purchase the search engine.

Page and Brin were stuck with Google—a search engine with no revenue source or solid business model. They took a risk and stuck with it, and today we see how business savvy that risk truly was.

Google's fortunes changed in 2003, when they launched their AdWords campaign, which let businesses advertise on Google searches. That year, the company generated $1.5 billion USD in revenue, thanks in large part to AdWords - which still accounts for most of Google's total revenue and profits. Google's parent company revenue in 2024 was over $350 billion USD.

When it was first founded in 1998, PayPal wasn't the online payment company we know today. This company, then called Confinity Inc., was first conceived of as a cryptography company and later as a service that transmitted money via PDAs. PayPal took a risk by changing its business model multiple times before it settled into its niche.

PayPal's success stems from its flexibility. The company wasn't afraid to rebrand and rename their company, before eBay bought it for $1.5 billion in 2002. PayPal even faced significant fraud challenges that threatened to sink the company in 2001, but managed to treat to this problem by responding to it like a risk management issue instead of a legal one. They have subsequently grown and in 2024 their revenue was nearly $32 biliion.

When Amazon crossed the pond from America, they came into our lives as book retailers. They purchased bookpages.co.uk in 1998 and over the next two decades transformed it into the retail giant we know today. Amazon took a risk by expanding its market beyond books and into electronic goods.

Amazon UK's real success only began in 2016, with a rise to £7.3 billion revenue—recording a modest £7.3 billion revenue in 2016., but since then they have gone form strength to strength, and as of 2024 were the leading retailer in the UK, with global revenues of over $450 billion.

The Tesla factory in Fremont, California was almost a pipe dream. While Tesla Motors was officially founded in 2003, the company didn't post profits until ten years later in 2013. However, before they ever got to that point, Tesla was on the brink of collapse. The US economy flat lined in 2008 and Tesla Motors only survived because co-founder Elon Musk invested his last $35 million cash into the company.

Musk's calculated risk won the day. Tesla Motors is worth around $50 billion USD. While the company still struggles to turn a quarterly profit and has faced many setbacks (such as 2015's $3.5 billion loss following the release of the Model X), it continues to revolutionize the electric car industry. In 2015, Tesla's Model S became the world's best-selling plug-in car and by 2024 revenue was close to $100 billion.

In 1994, Sony launched their first video game console, the PlayStation, into a high risk industry. Nintendo and Sega, two well-established brands, were already battling over market share and both were poised to release "next generation" consoles that could compete with the PlayStation's then-revolutionary hardware. As if that wasn't enough, the video game industry was still recovering from the market crash in 1983.

Despite these challenges, Sony released their new system and their risk paid off. They remain a strong contender in the video game market today, with the PlayStation 4 outselling Microsoft's Xbox One by an estimated 2:1. The original PlayStation remains one of the best-selling video game systems of all time, with over 102 million units sold worldwide.

Their risk taking spirit hasn't stop with their launch either — they're one of the pioneers of Virtual Reality hardware, through the PlaystationVR and PlaystationVR2. As of 2024, their Games & Network Services segment had operating income of over ¥400 billion.

There's a world of difference between a gamble and a calculated risk. Knowing how to recognize one from the other is the difference between smart investments and flushing money down the drain.

However, even well thought out risks sometimes go south, which is why you need a risk management strategy. Your risks may not always pay off the way it has for these companies, but as Ronald Heifetz, a professor at Harvard Kennedy School, said, "Successful people are those who don't become disheartened, and try again."