How Entrepreneurial Fear of Failure Hurts and Helps Your Start-up

Framework curated by Luke DeCoste, Entrepreneur-in-Residence and MindFrame Connect Advisor

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How Entrepreneurial Fear of Failure Hurts and Helps Your Start-up

“Fear of failure, as we all know as entrepreneurs, is one of the greatest fears in life. It's one of the things that stop us in our tracks and keeps us from trying something,” said Sara Blakely, the billionaire founder of the pioneering shapewear brand, Spanx.

Fear of failure is real for all entrepreneurs. It’s not whether you experience it that matters though, it’s how you respond to it, says Dr. Gabriella Cacciotti, a world-leading researcher of Entrepreneurial Fear of Failure.

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Background

Dr. Cacciotti and her colleagues have completed paradigm-shifting research on the topic. They define Entrepreneurial Fear of Failure as a negative emotional reaction based on cognitive assessments of the potential for failure in the uncertain context of entrepreneurship.

Present Amongst Nascent and Active Entrepreneurs

While Entrepreneurial Fear of Failure had been shown to prevent individuals from starting businesses, Cacciotti’s research showed that it was also present in entrepreneurs actively building their ventures.

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Context-Specific

Through interviews with Canadian and UK entrepreneurs, Cacciotti and her colleagues identified seven sources of Entrepreneurial Fear of Failure:

• financial security
• ability to fund the venture
• personal ability/self-esteem
• the potential of the idea
• threats to social esteem
• the venture’s ability to execute
• opportunity costs

“Fear of failure and the impact of a fear of failure on behaviour is very contextualized,” said Cacciotti. Several studies, for example, have shown that fear of failure may disproportionately impact women looking to start businesses, raising questions about how ecosystems can remove barriers for women entrepreneurs.

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‍Fear of Failure Promotes both Action and Inaction

Entrepreneurial fear of failure was historically assumed to stop entrepreneurs from acting. Cacciotti and her colleagues, however, showed that it can also help entrepreneurs act. “Fear really works as a motivator. It can be the source of determination to succeed,” Cacciotti said. This is a key takeaway from her research - the impact of fear depends on how you respond to it. If it causes you to avoid action, it could be a problem. But if it motivates you to move forward, fear can be helpful.

If what matters is how we respond to fear of failure, where do we go from here? Cacciotti and other researchers have identified several helpful strategies. We’ll summarize four approaches using the categories of MindFrame Connect’s resilience model - behavioural, emotional, social, and cognitive.

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Cognitive

“The first thing that entrepreneurs should do,” argues Cacciotti, “is rationalize the fear that they have and understand the clear source – is this coming from anxieties related to your product? Is this something about your ability?”

It’s about how you think in response to your fear. “People shouldn't think I feel fear about this; therefore, I shouldn't do it. It's normal to feel fear" said the world’s wealthiest entrepreneur, Elon Musk in an interview with famed entrepreneurship accelerator, YCombinator. “There are times when something is important enough, and you believe in it enough, that you do it in spite of fear,” said Musk. “It’s not as though I just have the absence of fear. I feel it quite strongly,” he continued.

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Emotional Awareness and Regulation

Learning to work with difficult emotions is also important. “You as an entrepreneur should become mindful that you have chosen an occupation that is by default uncertain and unsecure.” Instead of rejecting the emotions you’re experiencing, learning to accept, and even embrace them is a powerful antidote. “Cherish the feeling. This is the message entrepreneurs should hear,” says Cacciotti.

One approach shown to help with the fear of failure is self-compassion, an act of treating yourself kindly and not judging yourself for your failures. Research out of the Netherlands led by Dr. Yuval Engel 2021 found that self-compassion “may help entrepreneurs to cope with the experience of fear of failure when facing a threatening venture obstacle”.

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Social

Social networks are also key to working with the fear of failure. “For entrepreneurs in a constant battle with fear of failure, mentors and networks can be a vital source of reassurance,” wrote Dr. Cacciotti and her colleague Dr. James Hayton in Harvard Business Review.

Sara Blakely’s views on failure were guided by her father. “He would high-five me and say congratulations, way to go, and what it did was just reframe my definition of failure. Failure for me became not trying.”  

Every entrepreneur feels failure and Cacciotti encourages incubators to facilitate conversations that let entrepreneurs see that they’re not alone.

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Behavioural

The strategies above help you manage your fear, but whether fear is a positive or negative force “depends on the behaviour of the entrepreneur,” argues Cacciotti. If the entrepreneur is doing something about it, for example seeking more information, this can be very good for the business.  She notes, however, that if fear causes someone to stop doing anything, it could be an unhealthy response.  

Sara Blakely said her fear of dealing with people motivated her to learn better how to build relationships in business. As her father modeled, she now celebrates failure in her company.

As Wharton Business School organizational psychologist Adam Grant has written “When most of us fear failure, we walk away from our boldest ideas. But great entrepreneurs have a different response to the fear of failure. Yes, they’re afraid of failing, but they’re even more afraid of failing to try.”

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