The power of pessimism: Could positive thinking be holding your startup back?

Startup land is something of an optimists’ club, with entrepreneurs all over the country living off little more than positive thinking and instant noodles.

However, research from a trio of UK universities is dispelling the power of optimism, suggesting entrepreneurs of a positive persuasion are actually less successful than those that lean towards negativity.

The research paper, titled Curb your enthusiasm: Optimistic entrepreneurs earn less, from researchers at Bath University, the London School of Economics and Cardiff University, analysed the earnings of optimists and pessimists.

Optimists who are employees tend to earn about 30% more than their pessimistic peers, the paper found. However, optimists who are self-employed earn 30% less, on average.

“Self-belief may enhance performance but also result in participation in activities doomed to failure,” the report said.

Optimists “overweight the upside”, and so are more likely to lean towards a life of entrepreneurialism. However, they may also see potential for opportunity where there actually is none, and “tend to switch too soon and into objectively poor products”. Read more

Stephanie Palmer-Derrien - Startup Smart - 19 Nov 2018