I read this fabulous piece (http://www.collaborativefund.com/blog/nobody-planned-this-nobody-expected-it/)   by Morgan Housel of the Collaborative Fund today and cannot stop thinking about field mice defeating German tanks. It is such an amusing anecdote that makes an incredible point as well. Giants are often slayed by the smallest mistakes. (Editor’s Note- Read Morgan Housel! He is a fantastic thinker and writer. You will enjoy it even more than this blog)

 

                In Financial Planning we work with clients to help identify some of the big risks in their life and develop a plan to lessen the impact of these risks as much as possible. Morgan has me pondering how do we plan for the “unexpected” mice that eat away at the financial plan’s Panzer division?

 

                This is the part of the piece that got me.

 

I have seen this skill at work with startups we’ve backed. Ask a founder to list the biggest risks they face, and the usual suspects are mentioned. But beyond the predictable struggles of running a startup, here are a few issues we’ve dealt with among our portfolio companies in the last few months:

Water pipes broke, flooding and ruining a company’s office.

A company’s office was broken into three times.

A company was kicked out of its manufacturing plant.

A store was shut down after a customer called the health department because she didn’t like that another customer brought a dog inside.

A CEO’s email was spoofed in the middle of a fundraise that required all of his attention.

A founder had a mental breakdown.

Several of these events were existential to the company’s future. But none were foreseeable. None had previously happened to comparable companies we’ve dealt with. None had easy, or known, solutions. Nobody planned this, nobody expected it.

 

That’s what actual risk is

 

                It is really hard to plan for these events. But when considering your own plan, you shouldn’t discount them as not possible. Anything IS possible. Having a redundant plan that you use in case of emergency might be the best idea. Similar to an airplane having multiple electrical systems “just in case”.

 

                Much more to ponder on this point.