Nearly twenty years ago, I co-authored an academic paper with Professor Papagiannidis that explored how entrepreneurs manage risk while developing new products. Its title may have been a mouthful—Entrepreneurial E-Business Development: Mercenary Risk Theory—but the underlying idea was straightforward: entrepreneurs often need to take unconventional, even “mercenary,” approaches to managing risk.
One of the case studies we used still fascinates me today. Burt Rutan, the aerospace engineer behind SpaceShipOne, lacked the funds to test his designs in a formal wind tunnel. Instead, he strapped his prototype spaceship to the roof of a car and drove it at high speed. Ingenious, unorthodox, and risky—but it worked. That very spacecraft went on to win the $10 million Ansari X-Prize and laid the foundation for Virgin Galactic.
So, what is the central idea of Mercenary Risk Theory (MRT)?
In essence: Which is cheaper—the cost of failure, or the cost of prevention?
For entrepreneurs, the answer is often the cost of failure. When resources are scarce, it can make more sense to risk failing and try again than to spend money on preventative measures.
Fast forward twenty years: the corporate lens
At Clear Visibility, we see businesses facing exactly the same fundamental question, but the calculus has flipped. In a corporate environment, prevention is almost always cheaper than failure.
Take some simple but critical examples:
Should a business know where all its PCs are?
Should they ensure devices are patched?
Should they verify that every piece of software is authorised and correctly licensed?
From an entrepreneurial perspective, these might once have seemed like “nice-to-have” measures. But for corporates, the cost of not knowing—whether through cyber breach, compliance fine, or reputational damage—is eye-watering compared to the cost of prevention.
MRT as a guide for today’s leaders
Mercenary Risk Theory still holds timeless value. It reminds us that risk management is not about eliminating all risks but about balancing prevention with the true cost of failure.
For start-ups, innovation sometimes demands creative shortcuts. For established businesses, resilience requires investing in controls that prevent catastrophic losses. Both are valid interpretations of MRT, applied to very different contexts.
At Clear Visibility, we help organisations strike this balance with clarity. By shining a light on device inventories, patching gaps, licensing risks, and compliance blind spots, we make the cost of prevention transparent—and far more affordable than the alternative.
Because whether you’re strapping a spaceship to a car or managing thousands of endpoints in a global enterprise, the principle is the same: understand your risks, and manage them wisely.
📩 Want to learn more about how Clear Visibility can help you reduce risk, cut costs, and improve compliance? Get in touch at [email protected]
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