Risk means different things to different people. Some people are willing to go all-in on a hand of poker on a whim, while others believe that eating from a taco truck is risky. It’s a very natural human instinct to avoid risk, but there are different ways of looking at risk, and most people don’t tend to look the at entire picture.

Earlier this week, I had the pleasure of sitting down for lunch with Alan Chiu, a partner at XSeed Capital. XSeed Capital is a venture capital firm in Palo Alto which invests in early stage companies. Alan had been at three startups; two of these startups were acquired and one failed. However, his desire to build companies led him into the world venture capital.

During the lunch, a number of topics came up, ranging from career advice to how life is like in Vancouver, where he is from. The topic that struck me the most, however, was our conversation about the topic of risk. Alan said, “a lot of people equate uncertainty with risk, but they are two very different things.” In some cases, perhaps debating the next move in a high-stakes game of poker, they may be similar, but the truth of the matter is that uncertainty and risk are two entirely different animals.

A lot of people equate uncertainty with risk

I agree with him. In most decisions that we make in life, we consciously or subconsciously ask a plethora of questions to decide what course of action we should take: What is the benefit? What is the cost? How likely are the outcomes? What if I do nothing? And many more. Obviously, some decisions are inherently riskier than others, while some are more uncertain than others.

Having the entire contents of your bank account withdrawn as cash and stored inside your pillowcase allows you to feel the pile of money, to let the smell gently lull you to sleep, and to give you the quiet, comfortable certainty that it’s there. It’s also outrageously risky.

Perhaps another example that isn’t so outlandish could be like this: let’s say you have to decide whether you want to stay at your current job or not. If you stay at your current job, there is much less uncertainty, but what about risk? Look at the bigger picture and find trends that are happening today, but at the same time look inside yourself and see if what you’re doing now aligns with what you want in the future.

One of the current trends that we are seeing, especially in the technology sector today, is that the barrier to entry for a tech job is becoming lower and lower. Additionally, many companies don’t mind hiring younger, less experienced, cheaper talent to replace long-time employees. In this light, staying at your job might not be risky right now, but what about in two or three years? Do you have a strategy for that far ahead? These are questions I’ll let you answer for yourself.

There are a number of things that I would consider to be high risk. Here is a list of them, and I try to live my life in a way to prevent these things:

• Looking back when I’m old, wishing I had done more in my youth
• Being in a place where I’m not continuously learning
• Growing old and bitter
• Not being open to new experiences, especially in an ever-changing world

Alan told me to look for things that have a very limited downside with a huge potential upside and invest my time into those things. If there is a large amount of uncertainty, there still may be a manageable amount of risk, depending on the amount of downside and upside. Evaluate the entire picture. It’s advice that I’ve taken to heart, and I hope that you will also consider evaluating the bigger picture when you look at risk.