Chicago Booth is a place that challenges its students to stretch and take risks that they might not take elsewhere. Tell us about a time when you took a risk and what you learned from that experience (maximum of 750 words)
Lovely. This one comes down to understanding one tiny little word: risk. Let’s play out a few scenarios shall we?
Suppose you had a total of 1 million dollars in your savings account. Life savings, all in.
We’re gonna play out two scenarios. (Stay with me…)
Scenario 1 – I have next to me TWO bags filled with cash. 1 bag has $975,000. The other bag has $1,100,000. You can’t tell which is which, they look identical.
I ask you to give me your bag of 1 million dollars, and you get to pick one of the two bags (again, you can’t tell what either bag contains).
Would you do it? You could lose $25K or make $100,000. 50/50 chance.
Scenario 2 – I have two bags filled with a different amount of cash. 1 bag has $50,000. The other has $50,000,000.
Same deal, I ask you to give me your bag of 1 million dollars, and you get to pick one of the two bags (can’t tell what either bag contains). You could lose $950,000 or walk away with FIFTY MILLION.
Which deal do you wanna make?
We all know the concepts of risk averse and risk seeking. And that the guy who picks Scenario 1 is more risk averse than the guy who picks Scenario 2. But what IS risk?
Risk requires two crucial components. Potential GAIN… and potential LOSS. In order for there to be serious RISK… you need both. And they both need to be high.
In the first scenario, the potential loss was relatively low, $25K. The gain was also relatively low, $100K. Compared to the second scenario, not nearly as “risky.” That guy (Scenario 2) stands to lose nearly all of his savings. But, he also stands to gain enough to be SET for the rest of his LIFE.
You can’t have just ONE either (high potential gain OR high potential loss). If your choice was to hand over the 1 millions and you could either receive 1 million or 100 million… the potential gain is astronomical! But you stand to lose nothing. There’s nothing risky about it.
Likewise, if I said, give me a million dollars and you can walk away with a bag that contains $1 or a bag that contains $0… well, that’s just pure downside. Even though there’s huuuuuge potential loss, it’s not RISKY, it’s… just a bad decision! No one would ever make that deal.
There needs to be both. High potential gain AND high potential loss.
Okay, so what does that mean for your bschool essays?! Well, whatever feels to you like your riskiest story is probably the correct instinct. Go with that instinct.
But, as you’re setting it up, you have to amplify what you stood to GAIN, and it has to clearly be attractive and meaningful in some way. You have to spell this out. If it isn’t readily obvious, sell us on it. The gain might be personal and intangible for example. Either way, we need to know what it was.
Next, you have to amplify what you stood to LOSE. And it needs to be steep. If there was no real danger, you will not be able to fake it. You have to play out a scenario to show how you could have lost BIG. Live it out in the essay, show us what COULD have happened.
That will most likely be your opening paragraph or opening section. The setup.
Now show us the mechanism of WHY you chose to take this risk versus NOT taking it. Surely there was an option—in fact, there HAS to be an option otherwise you didn’t take a risk! (Risk implies choice.) You could have chosen the safer path. So why didn’t you? Why enter into a situation where you could have won or lost? Usually the answer is that either winning or losing is still a better outcome than not taking the risk at all for whatever reason. And we just need to understand why.
Great essay. Lends to great drama. The key here is to understand how you make decisions. Your judgment is (again) being judged. The first section will likely be the setup. The other section will be letting us inside your head so that we can see the gear churning.