Entrepreneurship is flourishing in Luxembourg. The number of people that have chosen this career path increased from 7.1% in 2014 to 10.2% last year. At the same time, government policies aim to boost the creation of new businesses by reducing the associated startup costs and payment requirements as well as simplifying the incorporation process. However, fear of failure is a major setback for potential founders, who often conceive failure as shameful. Forty-two point six percent of people with entrepreneurial intentions in Luxembourg say that fear of failure prevents them from starting up, according to the Global Entrepreneurship Monitor Report.
(Author: Ana Martínez – FACE Entrepreneurship / Image Credit: Will van Wingerden)
Entrepreneurship is a key element for the creation of jobs and the development of the economy. Thus, it is necessary to boost it by working through key aspects such as risk aversion, resilience and the current understanding of failure. In order to do this, the European Commission launched FACE (Failure Aversion Change in Europe) Entrepreneurship. This campaign, led by the Spanish communications firm Secuoya Group, promotes entrepreneurship by tackling the emotional side of starting up a business and sharing the stories of successful founders that also had fears and failures along their journeys.
Which are the main fears holding entrepreneurs back?
The only way to overcome fear of failure is to understand it and discern the main anxieties behind it. FACE Entrepreneurship carried out a Delphi study where a group of experts led by ESADE Professor Jan Brinckmann identified the main worries that entrepreneurs face when founding a business. They concluded that the most common fears can be grouped into six different categories:
- Financial fears. A common denominator for most aspiring entrepreneurs is the fear of losing their income, the capability to pay their expenses or the money invested in the venture. The image of ending up as a penniless or homeless person in the streets seemed to capture many of the common fears.
- Career related fears. Launching a startup often means leaving behind a comfortable job to start out on a project with an unknown outcome. This often translates into a great fear of losing professional standing or professional development. Regarding career risks, experts concluded, “Fears originate from losing one’s life efforts in the professional domain as a previously developed career could be ended (…) and one’s life’s efforts in the education and work domain might be in vain.”
- Social perception fears. These included fears regarding what others may think or say, as starting a company may be considered a “crazy” or “not normal” choice. Founders are often afraid of being exposed to their friends, family and co-workers, who may doubt or even laugh down their intended idea. Moreover, potential entrepreneurs fear that, if they fail, they may be considered a failure for life and may not be given further opportunities.
- Self-perception fears. Many entrepreneurs feel that they don’t have enough connections, knowledge and abilities to start a company. This leads to a decrease in self-esteem, to a feeling of loneliness and sometimes even to a sense of personal failure. These fears, although less frequent than the previous ones discussed, may have a long-lasting psychological impact.
- Feeling of losing it all. Experts concluded that, frequently, a mix of these various fears either prominently or in the back of one’s head, and with changing intensity, affects the prospective founder. This results in an emotional “fear-cocktail” that leads to a broad fear of “losing it all” when starting a new firm.
- Fear of losing personal freedom. While starting a company and being your own boss may at first sight appear to be a liberating experience, there is a great fear among entrepreneurs of losing their freedom to spend time with family and friends or pursue hobbies due to the time commitment and efforts required when starting a company.
Most entrepreneurs agree that fear is something normal when starting up and that, rather than hiding it and seeing it as something to be avoided, entrepreneurs should understand it, embrace it, use it to remain goal driven and, finally, overcome it. Moreover, each single failure should be seen as part of a learning process that brings you closer to success. By sharing the experiences of other entrepreneurs dealing with their fears and failures, FACE Entrepreneurship aims to encourage potential founders to fight their fears and embark on their venture.
This article was first published in SILICON
