Entrepreneurial success negatively correlated with optimism

My love/hate relationship with entrepreneurs (somewhat) explained:

A recent study examined the relationship between entrepreneurs’ optimism and the performance of their new ventures (Hmieleski, K.M. & Baron, R.A., 2009, Entrepreneurs’ optimism and new venture performance: A social cognitive perspective. Academy of Management Journal, 473-488).  This study of 207 entrepreneurs with an average firm age of 5.7 years found a negative relationship between optimism of the founders and performance of the new venture.  Furthermore, “the negative relationship between entrepreneurs’ optimism and the performance of their new ventures is strongest when entrepreneurs are high in previous business founding experience and lead their firms in dynamic environments” (p. 480).

That’s from Bret Simmons’ excellent blog POB (I think that’s the title, anyway).  Although I have tended to enjoy the energy of entrepreneurial ventures, I have often found the entrepreneurs themselves a paranoid, venal bunch when confronted with stressful situations, some to the extent of throwing mobile phones at people and kicking holes in walls.  This hasn’t been true for all entrepreneurs I have known, and I suspect there are many who are trusting, kind, clean, etc.  It would make sense, though, that those with a lot on the line might find themselves being protective of their investments.

That isn’t really what the study is about, though, at least not directly.  As I read it, the study is more about the entrepreneurs’ sense of what is realistic, and the ability to temper belief in one’s ideas with the facts of starting a business.  That probably has parallels in organizations of all sizes and stages.

[HT: Bob Sutton]

4 responses to “Entrepreneurial success negatively correlated with optimism

  1. Thanks for your post! Many entrepreneurs encounter peer pressure in business such as comparing themselves to others and wanting to be like someone else.


    • That’s an interesting perspective as well. It’s a very different personality than what makes it in other venues, but the ability to face reality and make the necessary changes seems critical.

  2. Pingback: Entrepreneurial success negatively correlated with optimism » Dig for Leadership - Stories that try to make the world a better place.

  3. Pingback: Week in Public Organizations, 20Jul2009 « PublicOrgTheory

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