It’s time for tech startups and their funders to take “orphan risks” seriously
Technology companies need to stop ignoring hard-to-grapple-with risks that could potentially blindside them in the future
In 2002, Donald Rumsfeld famously sliced and diced the world of uncertainty into three chunks: the known knowns, the known unknowns, and the unknown unknowns. Rumsfeld was talking about the lack of evidence for weapons of mass destruction in Iraq, but his three types of uncertainty have since been widely used to characterize different types of risks, from those we have a pretty good handle on, to those that we don’t even know exist yet. What these divisions fail to highlight though is a category of risks that are “known knowns” if you’re looking in the right place, but aren’t taken as seriously as they should be, and as a result are threatening to trip up a growing number of enterprises — including startups.
These are so-called “orphan risks” — risks that are perceived as being too ill-defined, too complex, or too irrelevant to be worth paying attention to, yet have the power to derail entire enterprises down the line if they’re not paid attention to.
The concept of orphan risks is a new one, although the underlying reality is not. Anyone who’s set out to…
