Fear is a powerful emotion that protects us from danger or an imminent threat. It can be triggered by something occurring now or by uncertainty about what's going to happen in the future. Unfortunately, fear is one of the most common reasons that aspiring entrepreneurs never make it past aspiring.
In a recent study, scholars from four different countries collaborated to examine the fear of failure in entrepreneurship. They identify with the following seven different sources of fear related to starting a business:
- A loss of personal financial security
- An inability of the entrepreneur to perform
- A lack of available venture financing
- A fundamental weakness in the idea behind the business
- A drop in the individual's social esteem
- An inability of the business to deliver on its promises
These are real fears with real psychological and physiological impacts on potential entrepreneurs. If we want to boost new businesses and foster economic growth, we need to help startup founders confront and overcome these fears. How do we do that? Here are four strategies:
Education: Ignorance and fear are stronger together. Education and training about market research, new business financing, organizing a startup, protecting intellectual property, and managing employees can alleviate many of the fears keeping entrepreneurs from taking the leap. Fortunately, there are many places to get this kind of training like the SBA, the IFC SME Toolkit, the Kauffman foundation, and MOBI.
Mentoring: Starting a new business can be lonely. Accelerators like Y-combinator, 500 startups, the GSBI, and CAPE have discovered that mentoring by experienced executives and serial entrepreneurs can help rookie founders. Having a friend who knows what's around the corner is a good antidote to anxiety.
Safety Nets: Safety nets make scary things look possible. One of the most troubling trends in new business starts is the diminishing presence of the middle class entrepreneur. In one disturbing study, nearly 50 percent of Americans were unprepared for an emergency expense of $400. If you can't find $400, you aren't likely to bet your future on a new venture. If the fall might kill you, make sure you have a really good net before making the jump.
Community Support: Silicon Valley is often identified as a place where failure is celebrated, if not idolized. That characterization applies to a small part of our community—the part where well-educated, well-connected, and well-off entrepreneurs use technology to disrupt the status quo. Most of the people in the world (and in Silicon Valley, for that matter) don't fall into that category. We need to support all entrepreneurs from all backgrounds, especially small businesses that become an integral part of the community.
When we help new entrepreneurs overcome their fears, we unleash their innovation, ingenuity, and inspiration. New businesses and economic growth won’t be far behind.
ABOUT THE AUTHOR: Drew Starbird is the director of the My Own Business Institute (MOBI) at Santa Clara University, and professor of operations management and information systems (OMIS).
In 2015, he completed a six-year term as the dean of SCU’s Leavey School of Business. As director of MOBI, Dr. Starbird is responsible for the University’s most aggressive and far-reaching online education initiative to date. MOBI’s mission is to start businesses that create jobs around the world.
Starbird joined the SCU faculty in 1987, teaching operations management, statistics, and complex decision-making in the University’s undergraduate, graduate and executive education programs, and receiving numerous awards for his teaching and for his scholarship. His research interests include quality control and management, supply chain management, food safety, and policy relating to nutritional security.
Professor Starbird holds a B.S. from the University of California, Davis, an MBA from Santa Clara University, and his Ph.D. from Cornell University.
YOU MAY ALSO BE INTERESTED IN: Choosing a Mentor, Importance of Advisors, Support Agencies for Business Owners