Being told you'll fail may actually make entrepreneurs more likely to succeed

Telling an entrepreneur they're going to fail might be the best advice to help them succeed, according to new research co-authored by Alex McKelvie, an entrepreneurship professor at Syracuse University's Martin J. Whitman School of Management.

The study, which is co-authored with Tim Michaelis and Jeff Pollack of North Carolina State University, April J. Spivack of Hanken School of Economics in Finland, Nick Smith of Northern Illinois University and Jon Carr of North Carolina State University draws on data from more than 1,400 entrepreneurs, which shows that being doubted makes them try even harder, part of the so-called “underdog effect.”

"Persistence is one of the defining traits of successful entrepreneurs, and we've long known what drives it on the positive side, that being passion, confidence, strong networks," McKelvie said. "What's been missing is an understanding of how doubt and negative feedback can be just as powerful a fuel."

The researchers found that entrepreneurs who were told they would fail reported a higher likelihood of persisting with their ventures than those who received positive feedback or no feedback at all. The effect held over a three-month period, meaning this is more than just a short lived emotional spike. Entrepreneurs responded with concrete actions, including working harder, taking immediate steps, consuming entrepreneurship-related media and thinking more intensely about their venture.

All of this draws on psychological reactance theory, which holds that people push back when they feel their freedom of action is being constrained. When someone tells an entrepreneur they'll fail, many experience it as a challenge to what they believe they're entitled to pursue. As a result, they respond accordingly.

The research also found that, surprisingly, the effect is stronger when the doubter is seen as less credible or unfamiliar with the industry. This suggests entrepreneurs are especially motivated to prove someone wrong, even if that person has no standing to judge them.

Along with the findings, the study also carries important cautions. The authors suggest careful consideration should be made about how critical feedback is delivered. They say that bluntly predicting failure (especially if the entrepreneur sees you as not particularly credible) may backfire, pushing them to dig in rather than reconsider. Framing concerns conditionally ("if X isn't addressed, this could struggle") is more likely to prompt reflection than defensiveness. Additionally for entrepreneurs, the authors warn that doubt can serve as fuel, but the need to prove others wrong can also become a trap. Persisting with an idea in order to spite a naysayer rather than because the venture genuinely makes sense risks escalating commitment to a failing idea.

The full paper is available in the Journal of Business Venturing.