Uber’s Lessons in Risk Management

Companies that can manage risk stand to have a significant advantage in the marketplace, says Karan Girotra, Professor of Technology and Operations Management at INSEAD, France’s leading business school. Unfortunately, risk is seen as a bad thing, as Girotra points out. Companies tend to shy away from it and don’t confront how to manage it like they should. In a recent interview with Big Think, former Treasury Secretary Timothy Geithner said that one of the key lessons he learned from the 2008 financial crash was that businesses must have the humility to prepare for the worst, even during the good times.


What’s a popular example of a company that gets risk right? Girotra points to Uber. The popular taxi service which rose up quickly in recent years has risk built into their core business model. Girotra explains:

"So we can think of in the transportation industry a company like Uber, which is this transportation network provider company with taxi hailing apps, as some of you might know, compare that to a traditional taxi service provider or a black car service provider.  Now a black car service provider has much more risk in its business model because it has to invest in a heavy asset load before any demand shows up.  A company like Uber on the other hand has a business model which has a lot lower risk, because it's the cost and revenue scale up together.  If a lot of people want taxi rides, Uber ends up bringing in a lot of drivers on board.  If nobody wants a taxi ride there are no drivers who are paid.  And that business model manages the demand risk in a superior fashion than a traditional taxi model does and that allows it to differentiate itself from the traditional model and provide a superior service to consumers..."

For more on Girotra’s discussion on risk management and how it can breed innovation, watch this clip from Big Think’s interview:

How to bring more confidence to your conversations

Entrepreneur and author Andrew Horn shares his rules for becoming an assured conversationalist.

content.jwplatform.com
Videos
  • To avoid basing action on external validation, you need to find your "authentic voice" and use it.
  • Finding your voice requires asking the right questions of yourself.
  • There are 3-5 questions that you would generally want to ask people you are talking to.
Keep reading Show less

Bespoke suicide pods now available for death in style

Sarco assisted suicide pods come in three different styles, and allow you to die quickly and painlessly. They're even quite beautiful to look at.

The Sarco assisted suicide pod
Technology & Innovation

Death: it happens to everyone (except, apparently, Keanu Reeves). But while the impoverished and lower-class people of the world die in the same ol' ways—cancer, heart disease, and so forth—the upper classes can choose hip and cool new ways to die. Now, there's an assisted-suicide pod so chic and so stylin' that peeps (young people still say peeps, right?) are calling it the "Tesla" of death... it's called... the Sarco! 

Keep reading Show less

Scientists find a horrible new way cocaine can damage your brain

Swiss researchers identify new dangers of modern cocaine.

Getty Images
Mind & Brain
  • Cocaine cut with anti-worming adulterant levamisole may cause brain damage.
  • Levamisole can thin out the prefrontal cortex and affect cognitive skills.
  • Government health programs should encourage testing of cocaine for purity.
Keep reading Show less