Fear of failure – another unhelpful cognitive bias

Much is written about how the fear of failure is a strong disincentive to entrepreneurs here in the UK. Most of the explanations are societal – law punishes bankrupts more severely here than in the US and failure carries greater social stigma.

These explanations have always seemed a bit too simple to me, largely because some level of fear of failure is rational. When businesses fail it hurts. Founders suffer emotionally and financially as do many of their employees. Understanding this issue properly requires a more nuanced understanding of what level of fear of failure is appropriate and how to get to the right point, as individuals and as societies.

The following passage from the excellent brainpickings throws some light on the psychology of the fear of failure:

“impact bias” — our tendency to greatly overestimate the intensity and extent of our emotional reactions – …. causes us to expect failures to be more painful than they actually are and thus to fear them more than we should.

Then the article goes on to describe our “psychological immune system” which fights “threats to our mental health” but operates “largely beneath our conscious awareness” causing us to avoid taking risks that might cause us pain, partly by underestimating our resilience in the event of failure.

Thus fear of failure is another cognitive bias.

It’s irrationality is evidenced by the fact that when we look back on life our regrets are not focused on the failures we suffered but the things we didn’t attempt in the first place. Regrets of inaction outnumber regrets of action by two to one.

As with seemingly all things in life there is a balance to be struck. Not taking action leads to regret, but at the same time being reckless isn’t sensible either. For most of us, however, our psychological bias takes us down the path of inaction more often than it should. That’s something to bear in mind.

 

 

  • Rait Ojasaar

    These are good and important points that every entrepreneur’s life is affected by. Couple of additional observations on the topic.

    The startups we work on often become extensions of our personalities. When startups fail, we fail with them, personally. This explanation (as offered by life coach & former VC Jerry Colonna) has resonated with my own experience as well as surfaced in talks with many other entrepreneurs. To lower the risk of breaking together with the startup, one should not merge the two. Extremely difficult to achieve due to the intensity of startups. A good mentor can help a lot in this case.

    Also, there seems to be a wide perception that entrepreneurs are in general much less risk averse than others. I have always felt a bit disconnected from this point of view. As a serial entrepreneur, I would rather opt to play it safe, if it only were possible… But what entrepreneurs seem to be better at is believing in their own ability to find some kind of solution to avoid / cope with / overcome the risky situations they face (this was also concluded by one study 5+ years ago that I have unfortunately lost and can’t link to).

    And the last point – looking back at our lives and regretting the inactions and failures is very human because the rear view mirror is always clearer than the windshield. It all becomes obvious once you know it. If we could see the future with the same clarity, then most would not dare to start anything in the first place. Especially when considering the tendency to overestimate the intensity and extent of our emotional reactions…

  • http://www.theequitykicker.com brisbourne

    Hi Rait – keeping the personal separate from the startup is great advice. I will remember that. Regarding your second point, personal exceptionalism – the belief that we are special and can overcome obstacles that would beat others – is a trait of successful entrepreneurs. It’s a positive cognitive bias.

    thanks.

  • gregallon

    Interesting stuff. I went into my first venture a couple of years ago, and regularly grappled with the fear of failure before taking the plunge – no question, it’s a powerful disincentive to entrepreneurial activity.

    What I eventually recognised was that for as long as I treated “failure” as a vague, undefined personal calamity, my fear of failure retained its power. I found that a useful mental exercise was to articulate, as specifically as possible, the worst case scenario. This essentially comprised a combination of financial and social consequences. The financial ones would be potentially painful, but I knew I could ultimately deal with them and move on. Similarly the social consequences would be unpleasant, but all manageable.

    Of course we all very much want to avoid the worst case scenario, but just as the article explains that we have a greater resilience to pain than we realise, I think that the very act of asking ourselves “what’s the worst that could happen?” can help us to recognise that resilience in advance, and overcome the inaction which might otherwise occur.

  • http://www.theequitykicker.com brisbourne

    Yes. Mapping out worst case scenarios in a bit of detail is a good practice. It helps get over the bias to inaction and makes sure you don’t end up with disaster.