Why taking no risks is the biggest risk of all

Mickey Mikitani, Chairman and CEO, Rakuten Group

If you’ve ever climbed a mountain, you know the meaning of risk. As you stand at the bottom, looking up, the summit seems a universe away. You may well consider your options at that moment: drop your gear and go back to a place of guaranteed safety or move forward, look up and embrace the risk interwoven in any worthy endeavor.

“When you stand at the base of the mountain, the edge of a life change, or the cusp of a new business venture, consider all the risks — not just the risks that come if you move forward, but also the risks of doing nothing. Often, inaction is the biggest risk of all.”

MICKEY MIKITANI, CHAIRMAN AND CEO, RAKUTEN GROUP

We experience this moment of decision-making in our lives over and over again. It happens when we attempt something new, follow a dream everyone else deems “outrageous”, or reach out to make a connection with a new individual. Every day, we take risks, big and small.

This is certainly true in business. I know from experience that risk is a necessary ingredient of progress. All great achievements come with risk. That truth runs through Rakuten’s history.

A necessary ingredient of progress

• It was risky for Rakuten to get into the mobile business. Many expressed concern that we were branching out beyond our core business of e-commerce and moving into a highly competitive, high-stakes space. We launched our 4G service in April 2020. Six months later, we launched 5G NSA service. Meanwhile, doubters questioned the technology we were using, our commitment to the cloud and the rate of our deployment. Many said we would fail, but that’s not what happened. Rakuten Mobile received two of the mobile industry’s top five global awards at the 2021 Mobile World Congress (MWC) in Barcelona and network performance has delivered world-class scores when compared to other major city networks around the globe. And we are continuing to grow; As of August 23, 2021, the combined number of subscribers for our mobile carrier service and MVNO service has surpassed 5 million.

• It was risky for us to venture into financial services and fintech. We were just building our e-commerce business when we launched the Rakuten credit card a little over ten years ago. Now we’re a Japan leader in terms of shopping transaction volume, with over 23 million cards issued. Rakuten Securities is getting very close to recognition as number one in its field. Rakuten Bank is number one in online banks, recently surpassing 11 million bank accounts — a first for a domestic online bank in the country.

• I took a personal risk when I left my job at the Industrial Bank of Japan to found my own company. Many people advised me against it. And when I said I was going to start a company that would put retail on the Internet, many were aghast. After all, many big brands of the time, such as IBM, had already tried and failed to bring retailing to the Internet. Today, Rakuten Ichiba’s annual gross merchandise sales (GMS) are on track to surpass five trillion yen in 2021 and growth of this unique ecosystem of diverse services continues to accelerate.

Risk and reward: Two sides of the same coin

To be sure, not every risk has paid off. There have been times over the years when we have tried something bold and the result is not what we had hoped. That happens. When you attempt ambitious projects, you have to expect that some of them will end in failure. This is not a reason to avoid risk-taking. Failures are not signs that you should stop and be more conservative. Instead, failures offer you lessons on how you can improve and how you can be more certain of success the next time around.

“There are no guarantees in life or in business. But there is a reason the word ‘risk’ is often paired with the word ‘reward.'”

When you stand at the base of the mountain, the edge of a life change, or the cusp of a new business venture, consider all the risks — not just the risks that come if you move forward, but also the risks of doing nothing. Often inaction is the biggest risk of all.

There are no guarantees in life or in business. But there is a reason the word “risk” is often paired with the word “reward.” They are two sides of the same coin. You can’t have one without the other.