It’s a question that can make some people feel uncomfortable. The proverb “a bird in the hand is worth two in the bush” means that it is better to have something that is certain than take a risk to get more, where you might lose everything. It is a warning against giving up a sure thing for something speculative.
Under what circumstances might this rule or proverb not apply?
I was listening to a presentation the other day by the Singaporean entrepreneur Jack Sim who told how he had an enjoyable sales job which he was good at but his boss was replaced with a “nasty” boss. Jack decided to leave his difficult boss and go out on his own. He formed 16 different companies.
In this instance Jack gave up the bird in his hand because of untenable circumstances.
Entrepreneurial ventures are often started by people who don’t have a bird in the hand. They may have lost their job, be unemployable because of their lack of skills or experience or be in a situation where their position has become redundant.
In this situation they would look for opportunities where they can use their experience, skills and resources to create an income for themselves. Whatever they choose to do they will still face deciding on the probability of the investment that they will make. If they have an investment opportunity whether it be creating a new product or service or a new venture and the probability is 1 they would have 100% chance of success. But such sure-fire investments are highly unlikely under most circumstances. There are also too many elements out of the control that can increase the risk.
At the moment there are a number of business people who have been impacted by the economic downturn and have chosen to start restaurants. As a general rule, the probability of success in starting a new restaurant business is about 10% (0.1). Yet an owner of a shoe factory which was closed down because of Chinese imports has started a restaurant in the local community and after six months is doing so well that his restaurant is fully booked on a Saturday evening.
How did this restaurant owner reduce or mitigate the risks involved in a restaurant? Among the measures he took was to find a location where there was a reasonably healthy middle-class family orientated clientele, a location outside of a shopping centre, a restaurant menu that most customers would be familiar with and he would be present full-time in his restaurant. He also told me that a review in a national Sunday newspaper made a big difference to attracting customers to his restaurant.
It would not make sense for a family person with a decent job and a house and car to go out and start something from scratch. Here the risk would be too high. There would be too much to lose.
If the “bird” was diminishing because of, say, inflation, rising costs, the strain of new family members or even the threat of job loss because of policy changes, then people with a reducing bird in the hand may be pushed to go the entrepreneurial route.
Yet there is another category of person and that is the entrepreneur. They are not always satisfied with the bird in the hand and wish to go after more believing that you will never become rich in a job no matter how safe and secure it is.
Under stable conditions the proverb “a bird in the hand is worth two in the bush” holds true going all the way back to 13th century Latin use. It implies that it is best to not take risks with a low probability of success. But those whose attitude or appetite for risk differs might be more attracted to another popular proverb “A bird in the hand is good, but a bird in the bush might sing”.
