Description
Within this brief elucidation concerning face entrepreneurship failure aversion change in europe.
1
FACE Entrepreneurshi p
Failure Aversion Change in Europe
REPORT OF THE FACE PROJECT DELPHI RESULTS
by Prof. Dr. Jan Bri nckmann
2
Table of Contents
Table of Contents
1. INTRODUCCIÓN …………………………………………………………………………3
2. STUDY DESIGN…………………………………………………………………………....3
Advisory Board Workshop…………………………………………………………………....3
Sample of Experts……………………………………………………………………………..4
Delphi Study Authorship………………………………………………………………………4
Delphi Study Method ………………………………………………………………………....4
3. DELPHI STUDY FINDINGS……………………………………………………………….5
3.1. Insights from the First Round……………………………………………………………5
a) Causes of Fear of Failure………………………………………………………………….5
b) Consequences of Fear of Failure………………………………………………………....9
c) Approaches to Reduce the Fear of Failure………...…………………………………...10
3.2 Insights from the Second Round……………………………………………………….15
a) Causes of Fear of Failure………………………………………………………………...16
b) Factors that Increase the Fear of Failure……………………………………………….16
c) Factors that Reduce the Fear of Failure………………………………………………...17
d) Common mistakes of prospective founders…………………………………………....18
e) Common challenges that prospective founders face in the startup domain………...20
f) Common challenges that prospective founders face in the startup domain(2)……...21
g) Messages to address the Fear of Failure……………………………………………….22
h) Communication formats to address the Fear of Failure……………………………….23
4. EXECUTIVE SUMMARY AND CONCLUSIONS……………………………………….26
The study highlighted key fears of failure and their triggers:…………………………….26
Consequences of Fear of Failure…………………………………………………………...26
Addressing the fear of failure in a marketing campaign……………………………….….28
Formats to address the Fear of Failure…………………………………………………….30
Success-factors to create an effect campaign to address the Fear of Failure………....31
3
1. INTRODUCTION
The FACE (Failure Aversion Change in Europe) project aims at promoting
entrepreneurship through a marketing campaign in various European Union member
countries to address the risk perception of aspiring entrepreneurs. The FACE program
seeks to foster a risk-taking culture, to change the perception of risks and likely
obstacles that entrepreneurs face, and to focus the communication campaign on
raising the awareness for entrepreneurship as a learning journey.
As part of the FACE project, a Delphi study was designed to inform the conception,
design and refinement of the FACE project drawing on insights from various expert
profiles in the entrepreneurship field.
Goals of the Delphi Study
The Delphi study aims at obtaining diverse expert input regarding factors that cause
fear of failure in prospective entrepreneurs. Prospective entrepreneurs are those that
are considering or are in the process of launching their new ventures. The aim of the
research is to identify further, approaches that prevent or reduce the fear of failure and
as a result, stimulate entrepreneurial activity. The Delphi study seeks to achieve the
following goals:
1. Understand drivers of the Fear of Failure of prospective
entrepreneurs
2. Understand Consequences of the Fear of Failure of prospective
entrepreneurs
3. Understand factors to reduce the Fear of Failure of prospective
entrepreneurs
4. Obtain insights regarding the messages and formats to deploy an
effective communication campaign directed at reducing the Fear of
Failure and to empower prospective entrepreneurs
2. STUDY DESIGN
Advisory Board Workshop
The Delphi study commenced with a workshop of five entrepreneurship experts with
distinguished entrepreneur, investor and mentor profiles forming the advisory board
4
and the FACE program organizers to introduce participants to the goal and scope of
the FACE program, explore the Fear of Failure phenomenon, identify causes of the
Fear of Failure, explore approaches to address the Fear of Failure, define the goals of
the subsequent Delphi study and discuss the Delphi study road map.
Sample of Experts
Subsequently, each of the five advisory board members was asked to identify five
experts representing their respective profiles i.e. entrepreneur, investor or mentor-
profiles. From the 25 suggested entrepreneurship experts, finally 16 participated in a
two round Delphi study. All the experts had international profiles and while representing
expert entrepreneurs, investors and mentors frequently had expert level experiences in
different domains.
Delphi study Authorship
The Delphi study was designed by Prof. Dr. J an Brinckmann from ESADE Business
School with the feedback from the advisory board for each of the two Delphi study
rounds. Dr. J an Brinckmann is Entrepreneurship Professor at the ESADE Business
School, one of the leading international scholars in Entrepreneurship, is the co-founder
of three ventures and an active business angel. He is on the editorial review board of
the two most prominent scholarly J ournals and won various international research
awards. For further information about the author:
https://es.linkedin.com/in/janbrinckmann
Delphi study Method
The Delphi study is a structured multi-round research approach to abstract insights
from a panel of experts. The iterative, multi-round characteristic seeks to use enable
the experts to build on insights from a previous round and enable consensus building.
The structure of the Delphi study was set to two rounds. In light of the quite consistent
insights from the Delphi study a two round structure appears appropriate. Further,
given that the first round produced substantial salient and consistent insights in a
qualitative fashion, in the second round quantitative assessment formats were included
to provide enhanced insights on the Fear of Failure phenomenon.
Moreover, the second round was used to draw on the insights and network of the
experts to obtain suggestions regarding specific messages, formats and contacts that
could be used to enable an effective implementation of the FACE marketing campaign.
For the following qualitative and quantitative analysis, results have to be considered
with caution as the experts are making judgments about the prospective entrepreneurs
5
and hence the psychological phenomenon is only evaluated indirectly and the
evaluation is characterized by a small sample size. 25 experts were invited to
participate in the Delphi study and 16 completed the questionnaires in the first and
second round.
3. DELPHI STUDY FINDINGS
3.1. Insights from the First Round
The first round data collection was structured around three topics: 1. Causes of the
Fear of Failure, 2. Consequences of Fear of Failure and 3. Approaches to reduce the
Fear of Failure. If possible, the aim was further to illustrate specific context
considerations that may affect the Fear of Failure phenomenon.
a) Causes of Fear of Failure
Fear types
Fear of failure was linked to the perception of substantial, frequently essential risks and
fears that threaten the individual and are attributed to the starting of an own company.
The main fear categories identified concern financial related fears, career related fears,
competence related fears, self-perception related fears, individual liberty related fears
and social perception related fears. All of these fear categories were consistently
highlighted by the experts.
One of the most frequently highlighted fear was regarded financial fear. This included
losing the income, losing ways to finance the home (and losing the home in
consequence), losing the capability to pay expenses or losing money invested in the
venture or other assets that are used as collateral or otherwise invested in the new
venture. Hence, many saw the fear of ending up bankrupt and without a home a
common fear that prospective entrepreneurs face. The picture of ending up as a
penniless and/or homeless person in the streets seemed to capture many of the
common fears.
Regarding the career risks, the experts saw that fears originate from losing one’s life
efforts in the professional domain as a previously developed career could be ended.
This is especially hard as the individuals build their - often successful - careers over
many years. Returning to the prior job or working field might not be a possibility.
Hence, fears exist that one’s life’s efforts in the education and work domain might be in
vain. In addition to the fear of losing previous career achievements, further fears
regarded the new work environment and fears of not learning and advancing in the new
role as a founder.
6
Another important fear category highlighted by the experts concerned capability
related fears. These regarding fears of not having the information, knowledge, know-
how and abilities to be able to start a company and all the various aspects associated
with starting a company. Often the starting of a company is perceived as a very
challenging endeavor where needed tasks, required knowledge and consequences of
one’s actions are not clear. While facing this daunting task, often the entrepreneur
lacks connections to experts or others in similar situations to turn to obtain the
necessary insights. This leads to fears that founders feel all alone not knowing
how to carry on further.
Another fear identified by the experts was the fear of losing one’s freedom. While
starting a company and being your own boss, may at first sight appear to be a
liberating experience, the experts found fear exist that an individual may fear to lose
the freedom to spent time with family and friends or pursue hobbies due to the time
commitment and efforts required when starting a company.
Social perception related fears where another prominent category. These included
fears regarding what others may think or say as starting a company may be considered
a “crazy”, not the norm or “not normal” choice. Further, there the founders may fear to
be exposed to friend, family, coworkers and other people who may doubt or even
ridicule the intended venture idea. Another important fear dimension, in the social
perception domain regards reaction by the environment - oftentimes dear and close
friends and family, colleagues or the society in general - that may consider the founder
that failed a failure for life and may not provide further opportunities later.
Further underlined were fears that results from failures in the financial, career,
capability and/or social domain which are fears regarding the own self-perception.
These resulting fears express themselves in self-doubt and considering one-self a
failure and may have lasting psychological impact.
As a final consideration, the experts suggested that frequently, a mix of these various
fears either prominently or in the back of the head and with changing intensity affects
the prospective founder. The emotional “ fear-cocktail” may further results in a broad
fear of “ losing it all” when starting a new firm.
Contexts that affect the fear of failure
Different situations increase the above described fear of failures. The experts
suggested that increases in prior achievements especially in the career domain
may increase the fear of failure as the individual has more to lose. Further, family
7
responsibilities such as having children especially when they are recently born and
being the bread-winner of the family may substantially increase the fear of the
prospective entrepreneur. Age was highlighted as a potentially important factor. It was
suggested that younger persons may have less to loose and hence could face the new
venture with less fears, take more risks and more open to learn. However, the fear of
lack of experience and lack of know how may be more pronounced. It was also stated
that the lack of awareness of the various tasks needed may and a certain degree of
naivety may be a blessing in disguise as fears might not substantiate.
One respondent laid out an interesting age related dynamic:
“- Young people up till 27-30 just go for it without much thought. They usually feel free
as a bird, have a lot of self-confidence, plunge in and aren’t much afraid of the
consequences of their actions.
- From 27-30 to mid 40. It’s another phase. Usually they get involved in a serious
relationship, starting a family, having more responsibility, which undoubtedly is having
an effect on their risk-taking behavior. I think fear is increasing in this phase
enormously. It’s on ‘its’ top.
- The 35/40 to 45/50 phase in which experience is paying off. Fear is diminishing but
still there on another level. Cause they are more afraid of losing what they have. The
main focus is on steady growth.
- From 45/50 on people have reached their goals or not. I think their former success or
lack of success determinate and influence their fear behavior on future actions.”
Mixed effects where ascribed to the prior success and wealth effects of a
prospective entrepreneur. While the prior success may provide a financial cushion and
a safety net, the bar of what constitutes success and failure also is increased.
Regarding gender related aspects, the assessment was mixed. Different experts saw
effects as being similar while others identified differences. One expert considered men
to be more afraid of not realizing their full potential, while women may be more afraid of
losing the things they have and that women may be born with a higher level and sense
of responsibility. Others felt that men overestimate themselves while women
underestimate and doubting themselves. Further, given that there are substantially less
female founders the women may be more in the spotlight and hence face greater
performance pressure.
8
Also the founding process was identified as a factor that affects the fear of failure and
that swings in the fear of failure are common and may shift from one day or moment to
the next. The many-fold triggers for fear of failure in the startup process highlighted by
the respondents are product delays, sales approaches that are not successful,
potential investors that do not invest, legal issues that arise.
A final important factor highlighted by the experts where the national founding
context, the culture and venture support situation. The following statements reflect
common perceptions:
The perception of failure in a country:
“In the US to fail in a venture is not a failure, it’s a formative experience to add to your
resume. Failing in other countries as Spain is considered a shame or even an
humiliation though.”
“In Spain role models are soccer players but not entrepreneurs. In USA kids get to
know Bill Gates and Steve Jobs and when they grow up they want to be like them.
They´ve learned in school that they can sell lemonade at the gate of their school and
they will get cheered for that.”
Career choices:
“In Sweden, where there is a lot of career mobility, low unemployment and relatively
high earning power, fear of failure will play less of a role in would be entrepreneurs
than in Spain, where there is high unemployment, not a whole lot of career mobility and
less earning power.”
Government support:
“well there are some countries in which government reinforces subsidies when you
startup, like not to have to pay social security until your business gets revenues, or still
get an amount similar to your unemployment fee while starting… so probably that
eases the way in some cases.”
General culture:
“In countries with a higher family culture (Mediterranean countries) people tend to take
less risks as they feel the family pressure/responsibilities more. In Western countries
9
with a high education level people tend to be more individualistic and risk taking. In
Eastern countries that have suffered under restrictive regimes and are still suffering
economically, there is a sense that everything is possible and people tend to take more
risks.”
“In Spain, social pressure plays a key part. Sometimes we cannot recognize the
success of other people, we do not tend to look up to them but to criticize them. I think
there is a huge difference in the education in several countries and in the values you
are promoting. There is a huge difference on how success is perceived in the Northern
Europe compared to Southern Europe, maybe because the protestant roots.”
b) Consequences of Fear of Failure
The consequences resulting from Fear of Failure were predominantly negative
although the respondents generally also acknowledge potential positive results from
Fear of Failure.
Negative consequences
Common consequences are that prospective entrepreneurs delay their startup often
for long times or never start. The entrepreneurs end up over-analyzing, over-thinking
or wait for the perfect idea which normally never comes. They may also start the
venture only part-time due to their fears which could reduce the chances of making the
venture work. If they start the venture, they may further end the venture too soon due
to the Fear of Failure or not take the necessary decisions and lack of energy to
make the venture a success. Absorbed by a Fear of Failure the entrepreneur is
generally not able to persuade and motivate employees, investors or customers. If their
venture failure fails, they may not start over again due to a Fear of Failure and remain
with psychological problems such as self-doubt and feelings of regret.
Positive consequences
However, many experts also associated positive consequences to Fear of Failure as
long as it does not become excessive. Positive consequences are the creation of a
sense of urgency and push. One respondent captured this idea as: “Fear of failure is
a driver to do everything to gain success.” Given the social reputation fears, an
entrepreneur might also work harder to proof to potential nay-sayers that one is
capable of making a specific business idea work. Respondents also said that is was in
fact very important that entrepreneurs are aware that failure is a likely outcome to
better plan their efforts, plan the resource dedication, consider alternative plans and
minimize potential risks.
10
One respondent captured the tension between positive and negative outcomes
resulting from different levels of fear of failure in the following:
“[Ignoring fear of failure may lead to] ‘casino’ behavior (everything on black and you
either double or loose) and running around like a headless chicken and on the other
end of the spectrum: too much fear and failure will stop people from acting at all. So
finding a balance will do the trick.”
c) Approaches to Reduce the Fear of Failure
General considerations
Some respondents suggested that Fear of Failure is linked to an individual’s
disposition and is generally hard to affect implying that likely an extended and
intensive exposure over various media formats may be needed. Further, the
experts pointed to the individual self-perception and general disposition as a key
factor in addressing the fear of failure. In this regard it was highlighted that individuals
with greater self-confidence and a desire to be their own boss and work independently
are generally more likely to face and overcome their Fear of Failure and start their
venture.
Still there was a general consensus that various means exist to affect the fear of
failure. A common theme was that the understanding of the Fear of Failure needs to
be altered. Though prospective entrepreneurs frequently experience Fear of Failure
leading to the above mentioned consequence such as over-analyzing, delaying and
half-heartily pursing the venture, these individuals could benefit from reconsidering the
meaning of failure in the entrepreneurship domain. A prominent perspective was that
Failure and its related Fear of Failure are inherent aspects of a startup. They need
to be acknowledged, accepted and can have various positive outcomes such as
creating a sense of urgency, fighting harder or focusing on reducing risks. Further,
however, the understanding of failure itself needs to be altered. While novice
entrepreneurs frequently consider failure as the end with devastating consequences for
the individual, the experts underlined that failure is never permanent, but rather just an
intermediate phase as long as the individual applied precaution and persists in the
difficult times. In fact, failure was highlighted as a necessary and positive event that
helps the entrepreneurs learn and become a much stronger and better entrepreneur.
In this regard, respondents depicted that entrepreneurs gain experience and increase
their market value in the entrepreneurship domain and beyond as they have relevant
and unique experience even if their venture ultimately ceased to exist. A quote from
one of the respondents captures this:
11
“Society should treat failing in a venture as an experience and something positive for
the founder and not as a failure. In the US , to fail in a venture is considered positive
because it implies a great experience and it’s supposed that the founder will learn from
his mistakes for further ventures.”
In addition to altering the perception and understanding of failure and hence in
consequence reduce the Fear of Failure, the respondents pointed to
educational/communication efforts, social support and governmental support as
effective ways to reduce the Fear of Failure.
In the educational/communication domain, information about how to start up a
venture, an analysis of different scenarios including the worst case scenario,
contingency plans, ways to reduce risks, approaches to obtain early startup success
and providing examples of other entrepreneurs, especially successful entrepreneurs,
were considered important. The experts highlighted the importance of showing a step
by step process how to start up and hence providing direction and focus, providing
information about how to effectively finance ventures and create early sales. These
education/communication efforts should be wide spread using various media and
should start early in the education system.
Further, it was underlined that a strong antagonist of the Fear of Failure is the Focus
on Opportunity, the Fear Of Missing Out (FOMO) as well as individual desires and
dreams. By focusing on the “Upside” of the venture, the “Fear of Failure” as a
potentially excessive focus on the “Downside” can be counteracted.
In terms of a supportive environment and social support, the respondents
highlighted that having mentors and a supportive family environment is beneficial.
Moreover, there was a broad and strong sentiment that government has an important
role in fostering entrepreneurship and creating an entrepreneurship friendly society. In
terms of important levers of government support funding support, a beneficial tax
treatment in early stages, providing information and consultative support as well as an
effective social safety net were considered important.
In the following, more specifically the ideal context for starting a venture as well as key
aspects in terms of message, format and content will be presented.
12
Beneficial founding context to reduce Fear of Failure
A key factor in terms of a supporting founding context is the immediate family and
friends. The immediate family and friends need to know that it will be a challenging
process and that their support potentially also financially might be crucial. Having a
young family might be a specially challenging context to commence as an
entrepreneur. Further having entrepreneurial role models in your family or immediate
circle of friends is further important. Since many, however, might not have these
immediate role-models, it is important for society to create access to role-models e.g.
through media and communication and meet-ups.
With regards to the financial situation the experts suggested that it is beneficial that
the partner/spouse has a second income and that the prospective entrepreneur has
personal savings and a low personal expense situation combined with a venture that
does not need much upfront financing but can generate revenues fast. Not having to
seek outside financing may be the best form to start a company.
Further having knowledge about how to start a company, having a strong founding
team and mentor network further provides prospective entrepreneurs with advantages
in overcoming Fears of Failure.
In an ideal setting, the individual is “hungry” and has a strong drive for creating a
successful company, but has an otherwise balanced life, a sound economic situation
and alternatives to turn to should the venture not work out as planned.
Messages to address the Fear of Failure
In the following key messages that the expert panel suggested are presented. Based
on the initial round there were different themes, but not a clear indication about the
main theme:
Failure is part of starting up:
“All great entrepreneurs have failed.”
“Setting up a business has a 95% chance of failure so you have to set it up with that in
mind.”
“Fear of Failure is normal.”
Success will come, if you put all your efforts into it. Failure is only temporary:
“World never ends with failure, most prominent successes came from learning from
previous failures.”
13
“Success is not final, failure is not fatal: it is the courage to continue that counts” -
Winston Churchill
“Great things were born because of what had been thought to be a failure.”
“Fail so you can succeed.”
“Failure is part of the success; learn from it and you will get closer to the success.”
Failure is positive. It is a learning experience. It keeps you focused:
“You learn more about yourself and business when you fail.”
“We fail because we need to learn to pick ourselves up.” - Cite from Batman Movie
“Fear of failure helps you to remain sharp and create a sense of urgency.”
“Failure is good, you learn more then you ever will.”
“There is not failure. Only Feedback.” – Robert Allen
Live the life to the fullest:
“Build a company is an experience that will be worth it both if you are successful as if
you fail, once that you have decided to start a company leave your fears behind and
focus on it 100%, take the opportunity.”
“Follow your dreams as you only live once.”
“Life is short and nothing in life is final. Don’t cling to what you have and do not miss
out on the chance of making something special happen.”
You are not alone:
“You are not alone, we will always be someone to hold you if you fall”.
Additionally, there were different calls for educational communication, to consider the
worst case scenario, different alternatives, define goals, reduce risks and show the
process of starting up.
Further, a dominant theme was to show various personal stories of real founders
that started and have them discuss their successes and failures.
Closely related was also a theme around the various positive meanings of what it
means to be an entrepreneur much beyond monetary means.
It should be also made clear that entrepreneurship is not a game but a risky and
challenging undertaking which commands all of the entrepreneur’s efforts.
In terms of messages to avoid, the experts suggested not to communicate that starting
up is easy, simplifications like “J ust do it” or that starting up is like a game. This can
14
undermine the importance and trivialize the Fear of Failure. Further words of caution
were raised regarding showing hardships of starting up excessively.
Formats to address the Fear of Failure
One of the most important and effective formats suggested by the vast majority of the
respondents was to focus of self-told stories by real entrepreneurs that can act as
role models. In this regard the experts especially suggested focusing on
entrepreneurs that initially failed but then succeeded. Further it was suggested to
use a wide variety of famous and not famous entrepreneurs from different industries
and business types but especially highlight also famous entrepreneurs.
These real stories could be communicated using talks with interactive Q&A formats
and discussions. Further, workshops that featured real entrepreneurs were
suggested. The workshops could further focus on helping the individuals prepare for
the launch of their own venture.
Additionally a broad range of media formats where suggested including
infographics, podcasts, conferences, tweets, webinars, and especially videos
(especially on social media such as YouTube and Facebook). Especial emphasis
should be placed on interactive formats. Further, different experts stressed the benefits
of a mentorship program.
The communication approaches should especially focus on key entrepreneurship
events, but also diffuse beyond these. A focus could be on tech events, hackatons,
Startup Weekends, workshops by the Chamber of Commerce, entrepreneurship and
programming classes in schools and universities, open houses for students and people
in industry to visit incubators, accelerators or company builders.
In term of target group of the marketing activities, the experts suggested to start the
communication early in life for instance include schools and also focus on
universities.
The experts further stressed the need to test the effectiveness of both message and
format before rolling it out to larger audiences.
15
Formats that were considered especially beneficial are:
· A short video series in YouTube featuring success entrepreneurs that share
their authentic stories including a discussion of failures.
· A discussion series where entrepreneurs come to discuss their stories and
address questions and concerns.
Success-factors to create an effect campaign to address the Fear of Failure
A few recurring themes regarding an effective marketing campaign could be identified
based on the experts statements:
· Be authentic. Use real entrepreneurs as examples. Do not create fake or
artificial stories.
· Include well-known entrepreneurs.
· Include an emotionally appealing communication.
· Also present fact based arguments.
· Test the effectiveness of both message and format before rolling it out to
larger audiences.
The experts felt that the above formats could appeal to broader audiences irrespective
of gender or age. Some experts however suggested that younger or less experienced
entrepreneurs look more for guidance and mentorship, while older or more experienced
individuals are looking more for investors, partners and a beneficial government
treatment including the tax regime.
When asked about initiatives that they knew that addressed the Fear of Failure most
were not aware of any initiatives. However, some experts mentioned the following
related examples to study:
- Re-empresa in Cataluña which helps in transitioning business to new management
- Accelerator programs
- www.Clarity.fm
- ww.Startups.co
- www.thefailcon.com
Further examples are the following video platforms focusing on entrepreneurs:
http://ecorner.stanford.edu/
http://mixergy.com/
In addition there are many videos about entrepreneurs stories on YouTube.
16
3.2 Insights from the Second Round
After the first round provided already highly consistent and detailed insights, the
second Delphi round focused on getting the experts insights regarding priorities and
importance of different approaches, messages, and formats as well as to identify target
entrepreneurs and contacts that could be used to implement an effective marketing
campaign.
a) Causes of Fear of Failure
Exhibit 1 presents the importance of the different fears as assessed by the experts on a
10 Point Scale (0 Being not important at all and 10 Being Extremely Important). The
financial fears (losing income, house, assets, not being able to pay bills) is the
salient fear category with very high rating. It seems of utmost importance to address
these type of fears in the marketing campaign. Further, critical are career related fears
(losing professional standing, professional development). Interestingly, social
fears (Fear of Failure in eyes of family and friends) and self-perception related fears
(losing self-esteem, confidence in one self) were judged important, but less important
than the other two fears. The feeling of losing it all and losing personal freedom appear
less relevant.
Exhibit 1: Causes of Fear of Failure
17
b) Factors that Increase the Fear of Failure
Exhibit 2 depicts the factors that experts consider to increase the likelihood and
severity of the Fear of Failure. The salient factors are related to the actual situation of
the entrepreneur. Dominating the list are family responsibilities. Having children and
being the single bread winner in a house-holder is the prime driver for the Fear of
Failure according to the panel. A lack of personal funds that can help buffer shortfalls
in income and relays in another critical driver combined with problems in the
venturing process. Hence, these results again highlight the importance of financial
aspects of the Fear of Failure. Experiencing unexpected financial problems, having no
personal financial reserves and being responsible for the family income can escalate
the Fear of Failure. As another group of factors disbelief by experts, by the immediate
family and friends, a lack of startup knowledge and role models are further important
aspects that may increase the Fear of Failure.
Exhibit 2: Factors that Increase the Fear of Failure
18
c) Factors that Reduce the Fear of Failure
Exhibit 3 presents the main factors that the experts regarded as factors to reduce the
Fear of Failure. As the list shows, a variety of factors may facilitate to reduce the Fear
of Failure. At the top of the list is achieving actual venture progress. As the
entrepreneurs experience progress their Fear of Failure decreases. This could suggest
for example a focus on creating early wins and establishing achievable goals that
provide confidence in the process. Further, a supportive family situation was
considered of utmost importance. Here the marketing campaign may be able to
communicate that specific person can be important supporters (the family and partners
as a team-member that do not let the person stand in the rain). The next factor is
experience related and could build on the theme that entrepreneurship is a career path
that one can prepare for e.g. by previously working in a high growth firm. Further
communication themes could center on starting with a founding team instead of starting
by oneself and getting mentors on board.
Exhibit 3: Factors that Reduce the Fear of Failure
19
d) Common mistakes of prospective founders
When the experts were asked about common mistakes that founders make, they
presented a wide variety of common mistakes. These may serve to identify challenges
and problems that are common and show how failure in those domains can be
overcome:
Strategy related
- No Vision
- Not being willing or able to change the business idea or business model
- Choosing a bad location
- Quitting too early
- Creating a project in a small market or difficulty to monetize
- Not discussing the idea with others due to fear that idea will be stolen
- Waiting too long to get the offering out into the market
- Not thinking international (including potential competition)
- Not having a business model defined
- Lack of a plan with clear milestones
Market Related
- Not talking to their customers and learning from them
- Overestimating the attractiveness of their offering/products
- Overestimating market size and market penetration speed
- Obsession over product features but ignoring customer demands
- Not measuring effectiveness of marketing activities
Technology Related
- Underestimate the requirements to build the product
Team Related
- Lack a sense of urgency to perform
- No or the wrong co-founders
- Hiring wrong people e.g. they incorporate friends into their start-up instead of looking
for people with the skills they are missing
- Hiring too fast and don't dismiss too fast (Better "Hire slowly and fire fast")
- Internal team member fights
- Not wanting to do many roles
- Not wanting to give up equity
- Not having correct shareholder agreement with your co-founders
20
- Unaware of legal requirements and regulations
- Listen to wrong advisers, attract wrong angel investors.
Finance related
- Burning too much cash
- Creating high fixed costs
- Not raising enough cash
- Giving up too much equity
- Lack of financial knowledge
- Inadequate financial planning
e) Common challenges that prospective founders face in the startup domain
Given that many of the triggers of Fear of Failure were related to challenges in the new
venture, experts were asked to identify common challenges that commonly perceived
as most threatening by prospective founders. The challenges can be grouped in the
following way. Notably, threats in not being able to obtain enough financing were by far
the most frequent mentioned threat. Further team related issues of finding the right co-
founders especially in the technology domain and finding paying customers are the
main perceived threats:
Strategy related
- Challenge of finding product market fit
- Threat that the business might not be feasible
- Threat of competition - though competition can be positive
Market related
- Threat of not getting paying customers
Team Related
- Threat of not being able to build and lead the team - especially finding tech people
- Not having enough experience
Finance related
- Threat of not being able to raise enough financing
Legal related
- Threat of not addressing legal matters adequately
21
f) Common challenges that prospective founders face in the startup domain
Exhibit 4 shows the most important concepts that the experts felt prospective founders
should know. Strikingly, the four most important concepts relate to experimentation
and iteration, working with scenarios including considering the worst case
scenario and develop contingency plans. Also important was to provide a step by
step guidance and make them aware about the avoiding personal liabilities.
Exhibit 4: Important concepts to teach prospective founders
In addition to the presented concepts, the experts could state additional important
concepts. The clearly dominant theme were concepts relating to the Lean Startup
Approach. Close to all experts highlighted the usefulness of the Lean Startup
Approach. Another dimension related to the importance of getting support both at the
family and entrepreneurship level:
Strategy
- Be flexible
22
- SCRUM methodologies
- Lean Startup methodology
- Project management
- A step by step process
- Importance of intensive and early customer interaction
Having support
- Assure family support
- Inform founders about the entrepreneurship support ecosystem (e.g. Accelerators,
funding opportunities, meetups)
g) Messages to address the Fear of Failure
Exhibit 5 shows the key messages that the experts consider relevant to address the
Fear of Failure. Notable, various messages received very high consensus ratings. Key
messages are that Failure is an inherent part of entrepreneurship and starting up, even
great entrepreneurs have failed before, entrepreneurship is not a game but you have to
fight to be successful, failure enables learning, personal development and can help you
in your career and that in the end lifetime is limited and trying is better than living with
the regret of having never tried.
Exhibit 5: Important Messages to address the Fear of Failure
23
To further focus the experts and get a second look on the key message, they were
asked to state the message that they would choose if they would only have one
message. As shown in exhibit 6 the message “ Failure is part of the success; learn
from it and you will get closer to success” was the preferred message. Also popular
was the message that “ Life is short and nothing is final. Try and make something
special happen.”
Exhibit 6: The key message to address the Fear of Failure
h) Communication formats to address the Fear of Failure
Exhibit 7 shows the communication formats that were considered most effective to
address the Fear of Failure. Clearly the talk/workshop format was the most popular
combined with a mentorship program and a video series on social media. The
talks/workshops were suggested to take place in universities, at startup events and in
schools. Creating other audiovisual content was also considered helpful.
24
Exhibit 7: Effective formats to address Fear of Failure
To further identify formats that experts might have missed in the first round and to
obtain a second perspective, the respondents were asked to state about additional
effective formats they would suggest:
- Formats that allow for personal interaction with entrepreneurs
- Formats that feature real entrepreneurs and their evolution
- Embrace the existing various video websites and blogs on the topic
- Videos must be short and focused on specific subjects
- Documentary production about an entrepreneurs life from the beginning to the end
such as movies on famous entrepreneurs as Steve J obs or Mark Zuckerberg in the
Social Network
25
In order to enhance the understanding of who should be the protagonist in the
suggested formats, different specific protagonist groups were offered. Exhibit 8 shows
that a variety of entrepreneurs including especially successful entrepreneurs
discussing their personal stories would be most effective to address the Fear of
Failure. Further effective is considered video content of star entrepreneurs that
shows how they address challenges. Also, enacted content of common challenges
and videos on a variety of entrepreneurs presenting their successes and failures
might be effective though to a lesser extent than the above formats. Peer workshops
were considered less effective, suggested that learning and being inspired by others
might be more important than working with peers that are also just beginning.
Exhibit 8: Profile types to be presented to address the Fear of Failure
4. EXECUTIVE SUMMARY AND CONCLUSIONS
The study highlighted key fears of failure and their triggers:
The financial fears (losing income, home, assets, not being able to pay bills, etc.)
was the salient fear category with the highest importance rating by the experts. It
seems of utmost importance to address these type of fears in the marketing campaign.
Further, critical are career related fears (losing professional standing, professional
26
development). Interestingly, social fears (Fear of Failure in eyes of family and friends)
and self-perception related fears (losing self-esteem, confidence in one self) were
judged as being important, but less important than the other two fear categories.
Combined with other diffuse fears the emotional “ fear-cocktail” may further results in
broad feelings of fear to start a company.
The fears further substantially increase with family responsibilities such as having
children especially when they are recently born and the prospective entrepreneur is the
bread-winner of the family.
If founders are younger, they especially fear the lack of experience and lack of
know how.
Also the founding process was identified as a factor that affects and triggers the fear
of failure. Swings in the intensity of the fear of failure are common. Triggers of Fear of
Failure were related to challenges in the new venture. Experts were asked to identify
common challenges that are perceived as most threatening by prospective founders.
Strategy related (Challenge of finding product market fit, Threat that the business
might not be feasible, Threat of competition etc.), Market related (Threat of not getting
paying customers), Team Related (Threat of not being able to build and lead the team
- especially finding tech people, Not having enough experience), Finance related
(Threat of not being able to raise enough financing and Legal related (Threat of not
addressing legal matters adequately) were highlighted.
The study also identified various specific and common founding mistakes that can
additionally trigger Fair of Failure in the Strategy domain (Not being willing or able
to change the business idea or business model, Creating a project in a small market or
difficulty to monetize, Not discussing idea with others due to fear that idea will be
stolen, Waiting to long to get the offering out into the market, Not thinking international
(including potential competition), Not having a business model defined, Lack of a plan
with clear milestones), Market Related (Not talking to customers and learning from
them, Overestimating the attractiveness of one’s offering/products, Overestimating
market size and market penetration speed, Obsession over product features but
ignoring customer demands etc.), Technology Related (Underestimate the
requirements to build the product), Team Related (Lack a sense of urgency to perform,
No or the wrong co-founders, Hiring wrong people, etc.) or Finance related (Burning
too much cash, Creating high fixed costs, Not raising enough cash, Giving up too much
equity etc.).
27
A final important factor highlighted by the experts where the national founding
context, the culture and venture support situation. The following statements
reflected common perceptions:
“In the US to fail in a venture is not a failure, it’s a formative experience to add to your
resume. Failing in other countries as Spain is considered a shame or even an
humiliation though.”
“In Spain role models are soccer players but not entrepreneurs. In USA kids get to
know Bill Gates and Steve Jobs and when they grow up they want to be like them.
They´ve learned in school that they can sell lemonade at the gate of their school and
they will get cheered for that.”
Consequences of Fear of Failure:
Common consequences are that prospective entrepreneurs delay their startup often
for long times or never start. The entrepreneurs end up over-analyzing, over-
thinking or wait for the perfect idea which normally never comes. They may also
start the venture only part-time due to their fears which could reduce the chances of
making the venture work. If they start the venture, they may further end the venture
too soon due to the Fear of Failure or not take the necessary decisions and lack of
energy to make the venture a success. Absorbed by a Fear of Failure the entrepreneur
is generally not able to persuade and motivate employees, investors or customers. If
their venture failure fails, they may not start over again due to a Fear of Failure and
remain with psychological problems such as self-doubt and feelings of regret.
However, many experts also associated positive consequences to Fear of Failure as
long as Fear of Failure does not become excessive. Positive consequences are the
creation of a sense of urgency and push. One respondent captured this idea as:
“Fear of failure is a driver to do everything to gain success.” Given the social reputation
fears, an entrepreneur might also work harder to proof to potential nay-sayers that one
is capable of making a specific business idea work. Respondents also said that is was
in fact very important that entrepreneurs are aware that failure is a likely outcome to
better plan their efforts, plan the resource dedication, consider alternative plans and
minimize potential risks.
28
Addressing the fear of failure in a marketing campaign
Some respondents suggested that Fear of Failure is linked to an individual’s
disposition and is generally hard to affect implying that likely an extended and
intensive exposure over various media formats is needed.
Based on the marketing campaign prospective entrepreneurs could benefit from
reconsidering the meaning of “Failure” in the entrepreneurship domain. A prominent
perspective was that Failure and its related Fear of Failure are inherent aspects of
starting a company. They need to be acknowledge, accepted and can have
various positive outcomes such as creating a sense of urgency, fighting harder or
focusing on reducing risks. Further, however, the understanding of Failure itself
needs to be altered. While novice entrepreneurs frequently consider failure as the end
with devastating consequences for the individual, the experts underlined that Failure is
never permanent, but rather just an intermediate phase as long as the individual
applied precaution and persists in the difficult times. In fact, failure was highlighted as a
necessary and positive event that helps the entrepreneurs to learn and become a
much stronger and better entrepreneur. In this regard, respondents depicted that
entrepreneurs gain experience and increase their market value in the
entrepreneurship domain and beyond as they now have relevant and unique
experience even if their venture ultimately ceased to exist. A quote from one of the
respondents captures this:
“Society should treat failing in a venture as an experience and something positive for
the founder and not as a failure. In the US , to fail in a venture is considered positive
because it implies a great experience and it’s supposed that the founder will learn from
his mistakes for further ventures.”
In the educational/communication domain, information about how to start up a
venture, an analysis of different scenarios including the worst case scenario,
contingency plans, ways to reduce risks, approaches to obtain early startup
success and providing examples of other entrepreneurs, especially successful
entrepreneurs, were considered important. The experts highlighted the importance of
showing a step by step process how to start up and hence providing direction and
focus, providing information about how to effectively finance ventures and create
early wins especially sales.
Further, it was underlined that a strong antagonist of the Fear of Failure is the Focus
on Opportunity, the Fear Of Missing Out (FOMO), as well as individual desires and
29
dreams. By focusing on the “Upside” of the venture, the “Fear of Failure” as a
potentially excessive focus on the “Downside” can be counteracted.
A key factor in terms of supporting founding context is the immediate family an
friends. The immediate family and friends needs to know that it will be a challenging
process and that their support personally as well as financially might be crucial.
With regards to the financial situation the experts suggested that it is beneficial that
the partner/spouse has a second income and that the prospective entrepreneur has
personal savings and a low personal expense situation combined with a venture
with low upfront financing but can generate revenues fast.
Based on the various rounds, key messages emerged:
Key themes were that success will come, if you put all your efforts into it. Failure is only
temporary:
“World never ends with failure, most prominent successes came from learning from
previous failures.”
“Success is not final, failure is not fatal: it is the courage to continue that counts” -
Winston Churchill
“Great things were born because of what had been thought to be a failure.”
“Fail so you can succeed.”
“Failure is part of the success; learn from it and you will get closer to the success.”
Failure is positive. It is a learning experience. It keeps you focused:
“You learn more about yourself and business when you fail.”
“We fail because we need to learn to pick ourselves up.” - Cite from Batman Movie
“Fear of failure helps you to remain sharp and create a sense of urgency.”
“Failure is good, you learn more then you ever will.”
“There is not failure. Only Feedback.” – Robert Allen
As well as inspirational messages of living life to the fullest:
“Build a company is an experience that will be worth it both if you are successful as if
you fail, once that you have decided to start a company leave your fears behind and
focus on it 100%, take the opportunity.”
“Follow your dreams as you only live once.”
30
“Life is short and nothing in life is final. Don’t cling to what you have and do not miss
out on the chance of making something special happen.”
Overall, key messages are that Failure is an inherent part of entrepreneurship and
starting up, even great entrepreneurs have failed before, entrepreneurship is not
a game but you have to fight to be successful, failure enables learning, personal
development and can help you in your career and that in the end lifetime is
limited and trying is better than living with the regret of having never tried. Other
variants are: “ Failure is part of the success; learn from it and you will get closer
to success” which was a preferred message. Also popular was the message that
“ Life is short and nothing is final. Try and make something special happen.”
Additionally, there were different calls for educational communication, to consider
worst case scenario, different alternatives, define goals, reduce risks and show
the process of starting up.
Further, a dominant theme was to show various personal stories of real founders
that started and discuss their successes and failures.
Closely related where also theme around the various positive meanings of what it
means to be an entrepreneur much beyond monetary means.
It should be also made clear that entrepreneurship is not a game but a risky and
challenging undertaking which commands all of the entrepreneur’s efforts.
In terms of messages to avoid, the experts suggested to avoid messages that starting
up is easy, or simplifications like “ Just do it” or that starting up is like a game. This
can undermine the importance and trivialize the Fear of Failure. Further words of
caution were raised regarding showing hardships of starting up excessively.
Formats to address the Fear of Failure
One of the most important and effective formats by the vast majority of the respondents
was to focus of self-told stories by real entrepreneurs that can act as role models.
In this regard the experts especially suggested focusing on entrepreneurs that initially
failed but then succeeded. Further it was suggested to use a wide variety of famous
and not famous entrepreneurs from different industries and business types but also
include famous entrepreneurs.
31
These real stories could be communicated using talks with interactive Q&A formats
and discussions. Further, workshops that featured real entrepreneurs were
suggested. The workshops could further focus on helping the individuals prepare for
the launch of their own venture.
Additionally a broad range of media formats where suggested including
infographics, podcasts, conferences, tweets, webinars, and especially videos
(especially on social media such as YouTube and Facebook). Especial emphasis
should be placed on interactive formats. Further, different experts stressed the benefits
of a mentorship program.
The communication approaches should especially focus on key entrepreneurship
events, but also diffuse beyond these. A focus could be on tech events, hackatons,
Startup Weekends, workshops by the Chamber of Commerce, entrepreneurship and
programming classes in schools and universities, open houses for students and people
in industry to visit incubators, accelerators or company builders.
In term of target group of the marketing activities, the experts suggested to start the
communication early in life for instance include schools and also focus on
universities.
The experts further stressed the need to test the effectiveness of both message and
format before rolling it out to larger audiences.
These are considered core-formats:
· Talk/workshop format was the most popular where entrepreneurs come to
discuss their stories and address questions and concerns.
· Combined with a mentorship program
· And a short video series in YouTube featuring success entrepreneurs that
share their authentic stories including a discussion of failures.
Success-factors to create an effect campaign to address the Fear of Failure
A few recurring themes regarding an effective marketing campaign could be identified
based on the experts statements:
· Be authentic. Use real entrepreneurs as examples. Do not create fake or
artificial stories.
· Include well-known entrepreneurs.
32
· Include an emotionally appealing communication.
· Also present fact based arguments.
· Test the effectiveness of both message and format before rolling it out to
larger audiences.
The experts further provided a longer list of entrepreneurs to include in the marketing
campaign and general characteristics these featured entrepreneurs should have.
Overall, a high degree of consensus on the above aspects of the marketing campaign
could be observed.
33
doc_959537991.pdf
Within this brief elucidation concerning face entrepreneurship failure aversion change in europe.
1
FACE Entrepreneurshi p
Failure Aversion Change in Europe
REPORT OF THE FACE PROJECT DELPHI RESULTS
by Prof. Dr. Jan Bri nckmann
2
Table of Contents
Table of Contents
1. INTRODUCCIÓN …………………………………………………………………………3
2. STUDY DESIGN…………………………………………………………………………....3
Advisory Board Workshop…………………………………………………………………....3
Sample of Experts……………………………………………………………………………..4
Delphi Study Authorship………………………………………………………………………4
Delphi Study Method ………………………………………………………………………....4
3. DELPHI STUDY FINDINGS……………………………………………………………….5
3.1. Insights from the First Round……………………………………………………………5
a) Causes of Fear of Failure………………………………………………………………….5
b) Consequences of Fear of Failure………………………………………………………....9
c) Approaches to Reduce the Fear of Failure………...…………………………………...10
3.2 Insights from the Second Round……………………………………………………….15
a) Causes of Fear of Failure………………………………………………………………...16
b) Factors that Increase the Fear of Failure……………………………………………….16
c) Factors that Reduce the Fear of Failure………………………………………………...17
d) Common mistakes of prospective founders…………………………………………....18
e) Common challenges that prospective founders face in the startup domain………...20
f) Common challenges that prospective founders face in the startup domain(2)……...21
g) Messages to address the Fear of Failure……………………………………………….22
h) Communication formats to address the Fear of Failure……………………………….23
4. EXECUTIVE SUMMARY AND CONCLUSIONS……………………………………….26
The study highlighted key fears of failure and their triggers:…………………………….26
Consequences of Fear of Failure…………………………………………………………...26
Addressing the fear of failure in a marketing campaign……………………………….….28
Formats to address the Fear of Failure…………………………………………………….30
Success-factors to create an effect campaign to address the Fear of Failure………....31
3
1. INTRODUCTION
The FACE (Failure Aversion Change in Europe) project aims at promoting
entrepreneurship through a marketing campaign in various European Union member
countries to address the risk perception of aspiring entrepreneurs. The FACE program
seeks to foster a risk-taking culture, to change the perception of risks and likely
obstacles that entrepreneurs face, and to focus the communication campaign on
raising the awareness for entrepreneurship as a learning journey.
As part of the FACE project, a Delphi study was designed to inform the conception,
design and refinement of the FACE project drawing on insights from various expert
profiles in the entrepreneurship field.
Goals of the Delphi Study
The Delphi study aims at obtaining diverse expert input regarding factors that cause
fear of failure in prospective entrepreneurs. Prospective entrepreneurs are those that
are considering or are in the process of launching their new ventures. The aim of the
research is to identify further, approaches that prevent or reduce the fear of failure and
as a result, stimulate entrepreneurial activity. The Delphi study seeks to achieve the
following goals:
1. Understand drivers of the Fear of Failure of prospective
entrepreneurs
2. Understand Consequences of the Fear of Failure of prospective
entrepreneurs
3. Understand factors to reduce the Fear of Failure of prospective
entrepreneurs
4. Obtain insights regarding the messages and formats to deploy an
effective communication campaign directed at reducing the Fear of
Failure and to empower prospective entrepreneurs
2. STUDY DESIGN
Advisory Board Workshop
The Delphi study commenced with a workshop of five entrepreneurship experts with
distinguished entrepreneur, investor and mentor profiles forming the advisory board
4
and the FACE program organizers to introduce participants to the goal and scope of
the FACE program, explore the Fear of Failure phenomenon, identify causes of the
Fear of Failure, explore approaches to address the Fear of Failure, define the goals of
the subsequent Delphi study and discuss the Delphi study road map.
Sample of Experts
Subsequently, each of the five advisory board members was asked to identify five
experts representing their respective profiles i.e. entrepreneur, investor or mentor-
profiles. From the 25 suggested entrepreneurship experts, finally 16 participated in a
two round Delphi study. All the experts had international profiles and while representing
expert entrepreneurs, investors and mentors frequently had expert level experiences in
different domains.
Delphi study Authorship
The Delphi study was designed by Prof. Dr. J an Brinckmann from ESADE Business
School with the feedback from the advisory board for each of the two Delphi study
rounds. Dr. J an Brinckmann is Entrepreneurship Professor at the ESADE Business
School, one of the leading international scholars in Entrepreneurship, is the co-founder
of three ventures and an active business angel. He is on the editorial review board of
the two most prominent scholarly J ournals and won various international research
awards. For further information about the author:
https://es.linkedin.com/in/janbrinckmann
Delphi study Method
The Delphi study is a structured multi-round research approach to abstract insights
from a panel of experts. The iterative, multi-round characteristic seeks to use enable
the experts to build on insights from a previous round and enable consensus building.
The structure of the Delphi study was set to two rounds. In light of the quite consistent
insights from the Delphi study a two round structure appears appropriate. Further,
given that the first round produced substantial salient and consistent insights in a
qualitative fashion, in the second round quantitative assessment formats were included
to provide enhanced insights on the Fear of Failure phenomenon.
Moreover, the second round was used to draw on the insights and network of the
experts to obtain suggestions regarding specific messages, formats and contacts that
could be used to enable an effective implementation of the FACE marketing campaign.
For the following qualitative and quantitative analysis, results have to be considered
with caution as the experts are making judgments about the prospective entrepreneurs
5
and hence the psychological phenomenon is only evaluated indirectly and the
evaluation is characterized by a small sample size. 25 experts were invited to
participate in the Delphi study and 16 completed the questionnaires in the first and
second round.
3. DELPHI STUDY FINDINGS
3.1. Insights from the First Round
The first round data collection was structured around three topics: 1. Causes of the
Fear of Failure, 2. Consequences of Fear of Failure and 3. Approaches to reduce the
Fear of Failure. If possible, the aim was further to illustrate specific context
considerations that may affect the Fear of Failure phenomenon.
a) Causes of Fear of Failure
Fear types
Fear of failure was linked to the perception of substantial, frequently essential risks and
fears that threaten the individual and are attributed to the starting of an own company.
The main fear categories identified concern financial related fears, career related fears,
competence related fears, self-perception related fears, individual liberty related fears
and social perception related fears. All of these fear categories were consistently
highlighted by the experts.
One of the most frequently highlighted fear was regarded financial fear. This included
losing the income, losing ways to finance the home (and losing the home in
consequence), losing the capability to pay expenses or losing money invested in the
venture or other assets that are used as collateral or otherwise invested in the new
venture. Hence, many saw the fear of ending up bankrupt and without a home a
common fear that prospective entrepreneurs face. The picture of ending up as a
penniless and/or homeless person in the streets seemed to capture many of the
common fears.
Regarding the career risks, the experts saw that fears originate from losing one’s life
efforts in the professional domain as a previously developed career could be ended.
This is especially hard as the individuals build their - often successful - careers over
many years. Returning to the prior job or working field might not be a possibility.
Hence, fears exist that one’s life’s efforts in the education and work domain might be in
vain. In addition to the fear of losing previous career achievements, further fears
regarded the new work environment and fears of not learning and advancing in the new
role as a founder.
6
Another important fear category highlighted by the experts concerned capability
related fears. These regarding fears of not having the information, knowledge, know-
how and abilities to be able to start a company and all the various aspects associated
with starting a company. Often the starting of a company is perceived as a very
challenging endeavor where needed tasks, required knowledge and consequences of
one’s actions are not clear. While facing this daunting task, often the entrepreneur
lacks connections to experts or others in similar situations to turn to obtain the
necessary insights. This leads to fears that founders feel all alone not knowing
how to carry on further.
Another fear identified by the experts was the fear of losing one’s freedom. While
starting a company and being your own boss, may at first sight appear to be a
liberating experience, the experts found fear exist that an individual may fear to lose
the freedom to spent time with family and friends or pursue hobbies due to the time
commitment and efforts required when starting a company.
Social perception related fears where another prominent category. These included
fears regarding what others may think or say as starting a company may be considered
a “crazy”, not the norm or “not normal” choice. Further, there the founders may fear to
be exposed to friend, family, coworkers and other people who may doubt or even
ridicule the intended venture idea. Another important fear dimension, in the social
perception domain regards reaction by the environment - oftentimes dear and close
friends and family, colleagues or the society in general - that may consider the founder
that failed a failure for life and may not provide further opportunities later.
Further underlined were fears that results from failures in the financial, career,
capability and/or social domain which are fears regarding the own self-perception.
These resulting fears express themselves in self-doubt and considering one-self a
failure and may have lasting psychological impact.
As a final consideration, the experts suggested that frequently, a mix of these various
fears either prominently or in the back of the head and with changing intensity affects
the prospective founder. The emotional “ fear-cocktail” may further results in a broad
fear of “ losing it all” when starting a new firm.
Contexts that affect the fear of failure
Different situations increase the above described fear of failures. The experts
suggested that increases in prior achievements especially in the career domain
may increase the fear of failure as the individual has more to lose. Further, family
7
responsibilities such as having children especially when they are recently born and
being the bread-winner of the family may substantially increase the fear of the
prospective entrepreneur. Age was highlighted as a potentially important factor. It was
suggested that younger persons may have less to loose and hence could face the new
venture with less fears, take more risks and more open to learn. However, the fear of
lack of experience and lack of know how may be more pronounced. It was also stated
that the lack of awareness of the various tasks needed may and a certain degree of
naivety may be a blessing in disguise as fears might not substantiate.
One respondent laid out an interesting age related dynamic:
“- Young people up till 27-30 just go for it without much thought. They usually feel free
as a bird, have a lot of self-confidence, plunge in and aren’t much afraid of the
consequences of their actions.
- From 27-30 to mid 40. It’s another phase. Usually they get involved in a serious
relationship, starting a family, having more responsibility, which undoubtedly is having
an effect on their risk-taking behavior. I think fear is increasing in this phase
enormously. It’s on ‘its’ top.
- The 35/40 to 45/50 phase in which experience is paying off. Fear is diminishing but
still there on another level. Cause they are more afraid of losing what they have. The
main focus is on steady growth.
- From 45/50 on people have reached their goals or not. I think their former success or
lack of success determinate and influence their fear behavior on future actions.”
Mixed effects where ascribed to the prior success and wealth effects of a
prospective entrepreneur. While the prior success may provide a financial cushion and
a safety net, the bar of what constitutes success and failure also is increased.
Regarding gender related aspects, the assessment was mixed. Different experts saw
effects as being similar while others identified differences. One expert considered men
to be more afraid of not realizing their full potential, while women may be more afraid of
losing the things they have and that women may be born with a higher level and sense
of responsibility. Others felt that men overestimate themselves while women
underestimate and doubting themselves. Further, given that there are substantially less
female founders the women may be more in the spotlight and hence face greater
performance pressure.
8
Also the founding process was identified as a factor that affects the fear of failure and
that swings in the fear of failure are common and may shift from one day or moment to
the next. The many-fold triggers for fear of failure in the startup process highlighted by
the respondents are product delays, sales approaches that are not successful,
potential investors that do not invest, legal issues that arise.
A final important factor highlighted by the experts where the national founding
context, the culture and venture support situation. The following statements reflect
common perceptions:
The perception of failure in a country:
“In the US to fail in a venture is not a failure, it’s a formative experience to add to your
resume. Failing in other countries as Spain is considered a shame or even an
humiliation though.”
“In Spain role models are soccer players but not entrepreneurs. In USA kids get to
know Bill Gates and Steve Jobs and when they grow up they want to be like them.
They´ve learned in school that they can sell lemonade at the gate of their school and
they will get cheered for that.”
Career choices:
“In Sweden, where there is a lot of career mobility, low unemployment and relatively
high earning power, fear of failure will play less of a role in would be entrepreneurs
than in Spain, where there is high unemployment, not a whole lot of career mobility and
less earning power.”
Government support:
“well there are some countries in which government reinforces subsidies when you
startup, like not to have to pay social security until your business gets revenues, or still
get an amount similar to your unemployment fee while starting… so probably that
eases the way in some cases.”
General culture:
“In countries with a higher family culture (Mediterranean countries) people tend to take
less risks as they feel the family pressure/responsibilities more. In Western countries
9
with a high education level people tend to be more individualistic and risk taking. In
Eastern countries that have suffered under restrictive regimes and are still suffering
economically, there is a sense that everything is possible and people tend to take more
risks.”
“In Spain, social pressure plays a key part. Sometimes we cannot recognize the
success of other people, we do not tend to look up to them but to criticize them. I think
there is a huge difference in the education in several countries and in the values you
are promoting. There is a huge difference on how success is perceived in the Northern
Europe compared to Southern Europe, maybe because the protestant roots.”
b) Consequences of Fear of Failure
The consequences resulting from Fear of Failure were predominantly negative
although the respondents generally also acknowledge potential positive results from
Fear of Failure.
Negative consequences
Common consequences are that prospective entrepreneurs delay their startup often
for long times or never start. The entrepreneurs end up over-analyzing, over-thinking
or wait for the perfect idea which normally never comes. They may also start the
venture only part-time due to their fears which could reduce the chances of making the
venture work. If they start the venture, they may further end the venture too soon due
to the Fear of Failure or not take the necessary decisions and lack of energy to
make the venture a success. Absorbed by a Fear of Failure the entrepreneur is
generally not able to persuade and motivate employees, investors or customers. If their
venture failure fails, they may not start over again due to a Fear of Failure and remain
with psychological problems such as self-doubt and feelings of regret.
Positive consequences
However, many experts also associated positive consequences to Fear of Failure as
long as it does not become excessive. Positive consequences are the creation of a
sense of urgency and push. One respondent captured this idea as: “Fear of failure is
a driver to do everything to gain success.” Given the social reputation fears, an
entrepreneur might also work harder to proof to potential nay-sayers that one is
capable of making a specific business idea work. Respondents also said that is was in
fact very important that entrepreneurs are aware that failure is a likely outcome to
better plan their efforts, plan the resource dedication, consider alternative plans and
minimize potential risks.
10
One respondent captured the tension between positive and negative outcomes
resulting from different levels of fear of failure in the following:
“[Ignoring fear of failure may lead to] ‘casino’ behavior (everything on black and you
either double or loose) and running around like a headless chicken and on the other
end of the spectrum: too much fear and failure will stop people from acting at all. So
finding a balance will do the trick.”
c) Approaches to Reduce the Fear of Failure
General considerations
Some respondents suggested that Fear of Failure is linked to an individual’s
disposition and is generally hard to affect implying that likely an extended and
intensive exposure over various media formats may be needed. Further, the
experts pointed to the individual self-perception and general disposition as a key
factor in addressing the fear of failure. In this regard it was highlighted that individuals
with greater self-confidence and a desire to be their own boss and work independently
are generally more likely to face and overcome their Fear of Failure and start their
venture.
Still there was a general consensus that various means exist to affect the fear of
failure. A common theme was that the understanding of the Fear of Failure needs to
be altered. Though prospective entrepreneurs frequently experience Fear of Failure
leading to the above mentioned consequence such as over-analyzing, delaying and
half-heartily pursing the venture, these individuals could benefit from reconsidering the
meaning of failure in the entrepreneurship domain. A prominent perspective was that
Failure and its related Fear of Failure are inherent aspects of a startup. They need
to be acknowledged, accepted and can have various positive outcomes such as
creating a sense of urgency, fighting harder or focusing on reducing risks. Further,
however, the understanding of failure itself needs to be altered. While novice
entrepreneurs frequently consider failure as the end with devastating consequences for
the individual, the experts underlined that failure is never permanent, but rather just an
intermediate phase as long as the individual applied precaution and persists in the
difficult times. In fact, failure was highlighted as a necessary and positive event that
helps the entrepreneurs learn and become a much stronger and better entrepreneur.
In this regard, respondents depicted that entrepreneurs gain experience and increase
their market value in the entrepreneurship domain and beyond as they have relevant
and unique experience even if their venture ultimately ceased to exist. A quote from
one of the respondents captures this:
11
“Society should treat failing in a venture as an experience and something positive for
the founder and not as a failure. In the US , to fail in a venture is considered positive
because it implies a great experience and it’s supposed that the founder will learn from
his mistakes for further ventures.”
In addition to altering the perception and understanding of failure and hence in
consequence reduce the Fear of Failure, the respondents pointed to
educational/communication efforts, social support and governmental support as
effective ways to reduce the Fear of Failure.
In the educational/communication domain, information about how to start up a
venture, an analysis of different scenarios including the worst case scenario,
contingency plans, ways to reduce risks, approaches to obtain early startup success
and providing examples of other entrepreneurs, especially successful entrepreneurs,
were considered important. The experts highlighted the importance of showing a step
by step process how to start up and hence providing direction and focus, providing
information about how to effectively finance ventures and create early sales. These
education/communication efforts should be wide spread using various media and
should start early in the education system.
Further, it was underlined that a strong antagonist of the Fear of Failure is the Focus
on Opportunity, the Fear Of Missing Out (FOMO) as well as individual desires and
dreams. By focusing on the “Upside” of the venture, the “Fear of Failure” as a
potentially excessive focus on the “Downside” can be counteracted.
In terms of a supportive environment and social support, the respondents
highlighted that having mentors and a supportive family environment is beneficial.
Moreover, there was a broad and strong sentiment that government has an important
role in fostering entrepreneurship and creating an entrepreneurship friendly society. In
terms of important levers of government support funding support, a beneficial tax
treatment in early stages, providing information and consultative support as well as an
effective social safety net were considered important.
In the following, more specifically the ideal context for starting a venture as well as key
aspects in terms of message, format and content will be presented.
12
Beneficial founding context to reduce Fear of Failure
A key factor in terms of a supporting founding context is the immediate family and
friends. The immediate family and friends need to know that it will be a challenging
process and that their support potentially also financially might be crucial. Having a
young family might be a specially challenging context to commence as an
entrepreneur. Further having entrepreneurial role models in your family or immediate
circle of friends is further important. Since many, however, might not have these
immediate role-models, it is important for society to create access to role-models e.g.
through media and communication and meet-ups.
With regards to the financial situation the experts suggested that it is beneficial that
the partner/spouse has a second income and that the prospective entrepreneur has
personal savings and a low personal expense situation combined with a venture that
does not need much upfront financing but can generate revenues fast. Not having to
seek outside financing may be the best form to start a company.
Further having knowledge about how to start a company, having a strong founding
team and mentor network further provides prospective entrepreneurs with advantages
in overcoming Fears of Failure.
In an ideal setting, the individual is “hungry” and has a strong drive for creating a
successful company, but has an otherwise balanced life, a sound economic situation
and alternatives to turn to should the venture not work out as planned.
Messages to address the Fear of Failure
In the following key messages that the expert panel suggested are presented. Based
on the initial round there were different themes, but not a clear indication about the
main theme:
Failure is part of starting up:
“All great entrepreneurs have failed.”
“Setting up a business has a 95% chance of failure so you have to set it up with that in
mind.”
“Fear of Failure is normal.”
Success will come, if you put all your efforts into it. Failure is only temporary:
“World never ends with failure, most prominent successes came from learning from
previous failures.”
13
“Success is not final, failure is not fatal: it is the courage to continue that counts” -
Winston Churchill
“Great things were born because of what had been thought to be a failure.”
“Fail so you can succeed.”
“Failure is part of the success; learn from it and you will get closer to the success.”
Failure is positive. It is a learning experience. It keeps you focused:
“You learn more about yourself and business when you fail.”
“We fail because we need to learn to pick ourselves up.” - Cite from Batman Movie
“Fear of failure helps you to remain sharp and create a sense of urgency.”
“Failure is good, you learn more then you ever will.”
“There is not failure. Only Feedback.” – Robert Allen
Live the life to the fullest:
“Build a company is an experience that will be worth it both if you are successful as if
you fail, once that you have decided to start a company leave your fears behind and
focus on it 100%, take the opportunity.”
“Follow your dreams as you only live once.”
“Life is short and nothing in life is final. Don’t cling to what you have and do not miss
out on the chance of making something special happen.”
You are not alone:
“You are not alone, we will always be someone to hold you if you fall”.
Additionally, there were different calls for educational communication, to consider the
worst case scenario, different alternatives, define goals, reduce risks and show the
process of starting up.
Further, a dominant theme was to show various personal stories of real founders
that started and have them discuss their successes and failures.
Closely related was also a theme around the various positive meanings of what it
means to be an entrepreneur much beyond monetary means.
It should be also made clear that entrepreneurship is not a game but a risky and
challenging undertaking which commands all of the entrepreneur’s efforts.
In terms of messages to avoid, the experts suggested not to communicate that starting
up is easy, simplifications like “J ust do it” or that starting up is like a game. This can
14
undermine the importance and trivialize the Fear of Failure. Further words of caution
were raised regarding showing hardships of starting up excessively.
Formats to address the Fear of Failure
One of the most important and effective formats suggested by the vast majority of the
respondents was to focus of self-told stories by real entrepreneurs that can act as
role models. In this regard the experts especially suggested focusing on
entrepreneurs that initially failed but then succeeded. Further it was suggested to
use a wide variety of famous and not famous entrepreneurs from different industries
and business types but especially highlight also famous entrepreneurs.
These real stories could be communicated using talks with interactive Q&A formats
and discussions. Further, workshops that featured real entrepreneurs were
suggested. The workshops could further focus on helping the individuals prepare for
the launch of their own venture.
Additionally a broad range of media formats where suggested including
infographics, podcasts, conferences, tweets, webinars, and especially videos
(especially on social media such as YouTube and Facebook). Especial emphasis
should be placed on interactive formats. Further, different experts stressed the benefits
of a mentorship program.
The communication approaches should especially focus on key entrepreneurship
events, but also diffuse beyond these. A focus could be on tech events, hackatons,
Startup Weekends, workshops by the Chamber of Commerce, entrepreneurship and
programming classes in schools and universities, open houses for students and people
in industry to visit incubators, accelerators or company builders.
In term of target group of the marketing activities, the experts suggested to start the
communication early in life for instance include schools and also focus on
universities.
The experts further stressed the need to test the effectiveness of both message and
format before rolling it out to larger audiences.
15
Formats that were considered especially beneficial are:
· A short video series in YouTube featuring success entrepreneurs that share
their authentic stories including a discussion of failures.
· A discussion series where entrepreneurs come to discuss their stories and
address questions and concerns.
Success-factors to create an effect campaign to address the Fear of Failure
A few recurring themes regarding an effective marketing campaign could be identified
based on the experts statements:
· Be authentic. Use real entrepreneurs as examples. Do not create fake or
artificial stories.
· Include well-known entrepreneurs.
· Include an emotionally appealing communication.
· Also present fact based arguments.
· Test the effectiveness of both message and format before rolling it out to
larger audiences.
The experts felt that the above formats could appeal to broader audiences irrespective
of gender or age. Some experts however suggested that younger or less experienced
entrepreneurs look more for guidance and mentorship, while older or more experienced
individuals are looking more for investors, partners and a beneficial government
treatment including the tax regime.
When asked about initiatives that they knew that addressed the Fear of Failure most
were not aware of any initiatives. However, some experts mentioned the following
related examples to study:
- Re-empresa in Cataluña which helps in transitioning business to new management
- Accelerator programs
- www.Clarity.fm
- ww.Startups.co
- www.thefailcon.com
Further examples are the following video platforms focusing on entrepreneurs:
http://ecorner.stanford.edu/
http://mixergy.com/
In addition there are many videos about entrepreneurs stories on YouTube.
16
3.2 Insights from the Second Round
After the first round provided already highly consistent and detailed insights, the
second Delphi round focused on getting the experts insights regarding priorities and
importance of different approaches, messages, and formats as well as to identify target
entrepreneurs and contacts that could be used to implement an effective marketing
campaign.
a) Causes of Fear of Failure
Exhibit 1 presents the importance of the different fears as assessed by the experts on a
10 Point Scale (0 Being not important at all and 10 Being Extremely Important). The
financial fears (losing income, house, assets, not being able to pay bills) is the
salient fear category with very high rating. It seems of utmost importance to address
these type of fears in the marketing campaign. Further, critical are career related fears
(losing professional standing, professional development). Interestingly, social
fears (Fear of Failure in eyes of family and friends) and self-perception related fears
(losing self-esteem, confidence in one self) were judged important, but less important
than the other two fears. The feeling of losing it all and losing personal freedom appear
less relevant.
Exhibit 1: Causes of Fear of Failure
17
b) Factors that Increase the Fear of Failure
Exhibit 2 depicts the factors that experts consider to increase the likelihood and
severity of the Fear of Failure. The salient factors are related to the actual situation of
the entrepreneur. Dominating the list are family responsibilities. Having children and
being the single bread winner in a house-holder is the prime driver for the Fear of
Failure according to the panel. A lack of personal funds that can help buffer shortfalls
in income and relays in another critical driver combined with problems in the
venturing process. Hence, these results again highlight the importance of financial
aspects of the Fear of Failure. Experiencing unexpected financial problems, having no
personal financial reserves and being responsible for the family income can escalate
the Fear of Failure. As another group of factors disbelief by experts, by the immediate
family and friends, a lack of startup knowledge and role models are further important
aspects that may increase the Fear of Failure.
Exhibit 2: Factors that Increase the Fear of Failure
18
c) Factors that Reduce the Fear of Failure
Exhibit 3 presents the main factors that the experts regarded as factors to reduce the
Fear of Failure. As the list shows, a variety of factors may facilitate to reduce the Fear
of Failure. At the top of the list is achieving actual venture progress. As the
entrepreneurs experience progress their Fear of Failure decreases. This could suggest
for example a focus on creating early wins and establishing achievable goals that
provide confidence in the process. Further, a supportive family situation was
considered of utmost importance. Here the marketing campaign may be able to
communicate that specific person can be important supporters (the family and partners
as a team-member that do not let the person stand in the rain). The next factor is
experience related and could build on the theme that entrepreneurship is a career path
that one can prepare for e.g. by previously working in a high growth firm. Further
communication themes could center on starting with a founding team instead of starting
by oneself and getting mentors on board.
Exhibit 3: Factors that Reduce the Fear of Failure
19
d) Common mistakes of prospective founders
When the experts were asked about common mistakes that founders make, they
presented a wide variety of common mistakes. These may serve to identify challenges
and problems that are common and show how failure in those domains can be
overcome:
Strategy related
- No Vision
- Not being willing or able to change the business idea or business model
- Choosing a bad location
- Quitting too early
- Creating a project in a small market or difficulty to monetize
- Not discussing the idea with others due to fear that idea will be stolen
- Waiting too long to get the offering out into the market
- Not thinking international (including potential competition)
- Not having a business model defined
- Lack of a plan with clear milestones
Market Related
- Not talking to their customers and learning from them
- Overestimating the attractiveness of their offering/products
- Overestimating market size and market penetration speed
- Obsession over product features but ignoring customer demands
- Not measuring effectiveness of marketing activities
Technology Related
- Underestimate the requirements to build the product
Team Related
- Lack a sense of urgency to perform
- No or the wrong co-founders
- Hiring wrong people e.g. they incorporate friends into their start-up instead of looking
for people with the skills they are missing
- Hiring too fast and don't dismiss too fast (Better "Hire slowly and fire fast")
- Internal team member fights
- Not wanting to do many roles
- Not wanting to give up equity
- Not having correct shareholder agreement with your co-founders
20
- Unaware of legal requirements and regulations
- Listen to wrong advisers, attract wrong angel investors.
Finance related
- Burning too much cash
- Creating high fixed costs
- Not raising enough cash
- Giving up too much equity
- Lack of financial knowledge
- Inadequate financial planning
e) Common challenges that prospective founders face in the startup domain
Given that many of the triggers of Fear of Failure were related to challenges in the new
venture, experts were asked to identify common challenges that commonly perceived
as most threatening by prospective founders. The challenges can be grouped in the
following way. Notably, threats in not being able to obtain enough financing were by far
the most frequent mentioned threat. Further team related issues of finding the right co-
founders especially in the technology domain and finding paying customers are the
main perceived threats:
Strategy related
- Challenge of finding product market fit
- Threat that the business might not be feasible
- Threat of competition - though competition can be positive
Market related
- Threat of not getting paying customers
Team Related
- Threat of not being able to build and lead the team - especially finding tech people
- Not having enough experience
Finance related
- Threat of not being able to raise enough financing
Legal related
- Threat of not addressing legal matters adequately
21
f) Common challenges that prospective founders face in the startup domain
Exhibit 4 shows the most important concepts that the experts felt prospective founders
should know. Strikingly, the four most important concepts relate to experimentation
and iteration, working with scenarios including considering the worst case
scenario and develop contingency plans. Also important was to provide a step by
step guidance and make them aware about the avoiding personal liabilities.
Exhibit 4: Important concepts to teach prospective founders
In addition to the presented concepts, the experts could state additional important
concepts. The clearly dominant theme were concepts relating to the Lean Startup
Approach. Close to all experts highlighted the usefulness of the Lean Startup
Approach. Another dimension related to the importance of getting support both at the
family and entrepreneurship level:
Strategy
- Be flexible
22
- SCRUM methodologies
- Lean Startup methodology
- Project management
- A step by step process
- Importance of intensive and early customer interaction
Having support
- Assure family support
- Inform founders about the entrepreneurship support ecosystem (e.g. Accelerators,
funding opportunities, meetups)
g) Messages to address the Fear of Failure
Exhibit 5 shows the key messages that the experts consider relevant to address the
Fear of Failure. Notable, various messages received very high consensus ratings. Key
messages are that Failure is an inherent part of entrepreneurship and starting up, even
great entrepreneurs have failed before, entrepreneurship is not a game but you have to
fight to be successful, failure enables learning, personal development and can help you
in your career and that in the end lifetime is limited and trying is better than living with
the regret of having never tried.
Exhibit 5: Important Messages to address the Fear of Failure
23
To further focus the experts and get a second look on the key message, they were
asked to state the message that they would choose if they would only have one
message. As shown in exhibit 6 the message “ Failure is part of the success; learn
from it and you will get closer to success” was the preferred message. Also popular
was the message that “ Life is short and nothing is final. Try and make something
special happen.”
Exhibit 6: The key message to address the Fear of Failure
h) Communication formats to address the Fear of Failure
Exhibit 7 shows the communication formats that were considered most effective to
address the Fear of Failure. Clearly the talk/workshop format was the most popular
combined with a mentorship program and a video series on social media. The
talks/workshops were suggested to take place in universities, at startup events and in
schools. Creating other audiovisual content was also considered helpful.
24
Exhibit 7: Effective formats to address Fear of Failure
To further identify formats that experts might have missed in the first round and to
obtain a second perspective, the respondents were asked to state about additional
effective formats they would suggest:
- Formats that allow for personal interaction with entrepreneurs
- Formats that feature real entrepreneurs and their evolution
- Embrace the existing various video websites and blogs on the topic
- Videos must be short and focused on specific subjects
- Documentary production about an entrepreneurs life from the beginning to the end
such as movies on famous entrepreneurs as Steve J obs or Mark Zuckerberg in the
Social Network
25
In order to enhance the understanding of who should be the protagonist in the
suggested formats, different specific protagonist groups were offered. Exhibit 8 shows
that a variety of entrepreneurs including especially successful entrepreneurs
discussing their personal stories would be most effective to address the Fear of
Failure. Further effective is considered video content of star entrepreneurs that
shows how they address challenges. Also, enacted content of common challenges
and videos on a variety of entrepreneurs presenting their successes and failures
might be effective though to a lesser extent than the above formats. Peer workshops
were considered less effective, suggested that learning and being inspired by others
might be more important than working with peers that are also just beginning.
Exhibit 8: Profile types to be presented to address the Fear of Failure
4. EXECUTIVE SUMMARY AND CONCLUSIONS
The study highlighted key fears of failure and their triggers:
The financial fears (losing income, home, assets, not being able to pay bills, etc.)
was the salient fear category with the highest importance rating by the experts. It
seems of utmost importance to address these type of fears in the marketing campaign.
Further, critical are career related fears (losing professional standing, professional
26
development). Interestingly, social fears (Fear of Failure in eyes of family and friends)
and self-perception related fears (losing self-esteem, confidence in one self) were
judged as being important, but less important than the other two fear categories.
Combined with other diffuse fears the emotional “ fear-cocktail” may further results in
broad feelings of fear to start a company.
The fears further substantially increase with family responsibilities such as having
children especially when they are recently born and the prospective entrepreneur is the
bread-winner of the family.
If founders are younger, they especially fear the lack of experience and lack of
know how.
Also the founding process was identified as a factor that affects and triggers the fear
of failure. Swings in the intensity of the fear of failure are common. Triggers of Fear of
Failure were related to challenges in the new venture. Experts were asked to identify
common challenges that are perceived as most threatening by prospective founders.
Strategy related (Challenge of finding product market fit, Threat that the business
might not be feasible, Threat of competition etc.), Market related (Threat of not getting
paying customers), Team Related (Threat of not being able to build and lead the team
- especially finding tech people, Not having enough experience), Finance related
(Threat of not being able to raise enough financing and Legal related (Threat of not
addressing legal matters adequately) were highlighted.
The study also identified various specific and common founding mistakes that can
additionally trigger Fair of Failure in the Strategy domain (Not being willing or able
to change the business idea or business model, Creating a project in a small market or
difficulty to monetize, Not discussing idea with others due to fear that idea will be
stolen, Waiting to long to get the offering out into the market, Not thinking international
(including potential competition), Not having a business model defined, Lack of a plan
with clear milestones), Market Related (Not talking to customers and learning from
them, Overestimating the attractiveness of one’s offering/products, Overestimating
market size and market penetration speed, Obsession over product features but
ignoring customer demands etc.), Technology Related (Underestimate the
requirements to build the product), Team Related (Lack a sense of urgency to perform,
No or the wrong co-founders, Hiring wrong people, etc.) or Finance related (Burning
too much cash, Creating high fixed costs, Not raising enough cash, Giving up too much
equity etc.).
27
A final important factor highlighted by the experts where the national founding
context, the culture and venture support situation. The following statements
reflected common perceptions:
“In the US to fail in a venture is not a failure, it’s a formative experience to add to your
resume. Failing in other countries as Spain is considered a shame or even an
humiliation though.”
“In Spain role models are soccer players but not entrepreneurs. In USA kids get to
know Bill Gates and Steve Jobs and when they grow up they want to be like them.
They´ve learned in school that they can sell lemonade at the gate of their school and
they will get cheered for that.”
Consequences of Fear of Failure:
Common consequences are that prospective entrepreneurs delay their startup often
for long times or never start. The entrepreneurs end up over-analyzing, over-
thinking or wait for the perfect idea which normally never comes. They may also
start the venture only part-time due to their fears which could reduce the chances of
making the venture work. If they start the venture, they may further end the venture
too soon due to the Fear of Failure or not take the necessary decisions and lack of
energy to make the venture a success. Absorbed by a Fear of Failure the entrepreneur
is generally not able to persuade and motivate employees, investors or customers. If
their venture failure fails, they may not start over again due to a Fear of Failure and
remain with psychological problems such as self-doubt and feelings of regret.
However, many experts also associated positive consequences to Fear of Failure as
long as Fear of Failure does not become excessive. Positive consequences are the
creation of a sense of urgency and push. One respondent captured this idea as:
“Fear of failure is a driver to do everything to gain success.” Given the social reputation
fears, an entrepreneur might also work harder to proof to potential nay-sayers that one
is capable of making a specific business idea work. Respondents also said that is was
in fact very important that entrepreneurs are aware that failure is a likely outcome to
better plan their efforts, plan the resource dedication, consider alternative plans and
minimize potential risks.
28
Addressing the fear of failure in a marketing campaign
Some respondents suggested that Fear of Failure is linked to an individual’s
disposition and is generally hard to affect implying that likely an extended and
intensive exposure over various media formats is needed.
Based on the marketing campaign prospective entrepreneurs could benefit from
reconsidering the meaning of “Failure” in the entrepreneurship domain. A prominent
perspective was that Failure and its related Fear of Failure are inherent aspects of
starting a company. They need to be acknowledge, accepted and can have
various positive outcomes such as creating a sense of urgency, fighting harder or
focusing on reducing risks. Further, however, the understanding of Failure itself
needs to be altered. While novice entrepreneurs frequently consider failure as the end
with devastating consequences for the individual, the experts underlined that Failure is
never permanent, but rather just an intermediate phase as long as the individual
applied precaution and persists in the difficult times. In fact, failure was highlighted as a
necessary and positive event that helps the entrepreneurs to learn and become a
much stronger and better entrepreneur. In this regard, respondents depicted that
entrepreneurs gain experience and increase their market value in the
entrepreneurship domain and beyond as they now have relevant and unique
experience even if their venture ultimately ceased to exist. A quote from one of the
respondents captures this:
“Society should treat failing in a venture as an experience and something positive for
the founder and not as a failure. In the US , to fail in a venture is considered positive
because it implies a great experience and it’s supposed that the founder will learn from
his mistakes for further ventures.”
In the educational/communication domain, information about how to start up a
venture, an analysis of different scenarios including the worst case scenario,
contingency plans, ways to reduce risks, approaches to obtain early startup
success and providing examples of other entrepreneurs, especially successful
entrepreneurs, were considered important. The experts highlighted the importance of
showing a step by step process how to start up and hence providing direction and
focus, providing information about how to effectively finance ventures and create
early wins especially sales.
Further, it was underlined that a strong antagonist of the Fear of Failure is the Focus
on Opportunity, the Fear Of Missing Out (FOMO), as well as individual desires and
29
dreams. By focusing on the “Upside” of the venture, the “Fear of Failure” as a
potentially excessive focus on the “Downside” can be counteracted.
A key factor in terms of supporting founding context is the immediate family an
friends. The immediate family and friends needs to know that it will be a challenging
process and that their support personally as well as financially might be crucial.
With regards to the financial situation the experts suggested that it is beneficial that
the partner/spouse has a second income and that the prospective entrepreneur has
personal savings and a low personal expense situation combined with a venture
with low upfront financing but can generate revenues fast.
Based on the various rounds, key messages emerged:
Key themes were that success will come, if you put all your efforts into it. Failure is only
temporary:
“World never ends with failure, most prominent successes came from learning from
previous failures.”
“Success is not final, failure is not fatal: it is the courage to continue that counts” -
Winston Churchill
“Great things were born because of what had been thought to be a failure.”
“Fail so you can succeed.”
“Failure is part of the success; learn from it and you will get closer to the success.”
Failure is positive. It is a learning experience. It keeps you focused:
“You learn more about yourself and business when you fail.”
“We fail because we need to learn to pick ourselves up.” - Cite from Batman Movie
“Fear of failure helps you to remain sharp and create a sense of urgency.”
“Failure is good, you learn more then you ever will.”
“There is not failure. Only Feedback.” – Robert Allen
As well as inspirational messages of living life to the fullest:
“Build a company is an experience that will be worth it both if you are successful as if
you fail, once that you have decided to start a company leave your fears behind and
focus on it 100%, take the opportunity.”
“Follow your dreams as you only live once.”
30
“Life is short and nothing in life is final. Don’t cling to what you have and do not miss
out on the chance of making something special happen.”
Overall, key messages are that Failure is an inherent part of entrepreneurship and
starting up, even great entrepreneurs have failed before, entrepreneurship is not
a game but you have to fight to be successful, failure enables learning, personal
development and can help you in your career and that in the end lifetime is
limited and trying is better than living with the regret of having never tried. Other
variants are: “ Failure is part of the success; learn from it and you will get closer
to success” which was a preferred message. Also popular was the message that
“ Life is short and nothing is final. Try and make something special happen.”
Additionally, there were different calls for educational communication, to consider
worst case scenario, different alternatives, define goals, reduce risks and show
the process of starting up.
Further, a dominant theme was to show various personal stories of real founders
that started and discuss their successes and failures.
Closely related where also theme around the various positive meanings of what it
means to be an entrepreneur much beyond monetary means.
It should be also made clear that entrepreneurship is not a game but a risky and
challenging undertaking which commands all of the entrepreneur’s efforts.
In terms of messages to avoid, the experts suggested to avoid messages that starting
up is easy, or simplifications like “ Just do it” or that starting up is like a game. This
can undermine the importance and trivialize the Fear of Failure. Further words of
caution were raised regarding showing hardships of starting up excessively.
Formats to address the Fear of Failure
One of the most important and effective formats by the vast majority of the respondents
was to focus of self-told stories by real entrepreneurs that can act as role models.
In this regard the experts especially suggested focusing on entrepreneurs that initially
failed but then succeeded. Further it was suggested to use a wide variety of famous
and not famous entrepreneurs from different industries and business types but also
include famous entrepreneurs.
31
These real stories could be communicated using talks with interactive Q&A formats
and discussions. Further, workshops that featured real entrepreneurs were
suggested. The workshops could further focus on helping the individuals prepare for
the launch of their own venture.
Additionally a broad range of media formats where suggested including
infographics, podcasts, conferences, tweets, webinars, and especially videos
(especially on social media such as YouTube and Facebook). Especial emphasis
should be placed on interactive formats. Further, different experts stressed the benefits
of a mentorship program.
The communication approaches should especially focus on key entrepreneurship
events, but also diffuse beyond these. A focus could be on tech events, hackatons,
Startup Weekends, workshops by the Chamber of Commerce, entrepreneurship and
programming classes in schools and universities, open houses for students and people
in industry to visit incubators, accelerators or company builders.
In term of target group of the marketing activities, the experts suggested to start the
communication early in life for instance include schools and also focus on
universities.
The experts further stressed the need to test the effectiveness of both message and
format before rolling it out to larger audiences.
These are considered core-formats:
· Talk/workshop format was the most popular where entrepreneurs come to
discuss their stories and address questions and concerns.
· Combined with a mentorship program
· And a short video series in YouTube featuring success entrepreneurs that
share their authentic stories including a discussion of failures.
Success-factors to create an effect campaign to address the Fear of Failure
A few recurring themes regarding an effective marketing campaign could be identified
based on the experts statements:
· Be authentic. Use real entrepreneurs as examples. Do not create fake or
artificial stories.
· Include well-known entrepreneurs.
32
· Include an emotionally appealing communication.
· Also present fact based arguments.
· Test the effectiveness of both message and format before rolling it out to
larger audiences.
The experts further provided a longer list of entrepreneurs to include in the marketing
campaign and general characteristics these featured entrepreneurs should have.
Overall, a high degree of consensus on the above aspects of the marketing campaign
could be observed.
33
doc_959537991.pdf