North Carolina State University: Young entrepreneurs want to prove their critics wrong

Young entrepreneurs whose prospects are viewed with scepticism by those around them make a particular effort to prove their critics wrong and are therefore usually more successful than those who are predicted to succeed from the outset. ‘When you’re told that your start-up, your idea that you’re committed to, is going to fail, it can almost feel like a personal attack,’ says Tim Michaelis of North Carolina State University.

Commitment through criticism

To clarify this, the researchers conducted three studies. For the first study, the researchers recruited 423 entrepreneurs, 320 of whom had been predicted to fail at various points in time. They asked them how committed they were to their start-up and found that gloomy predictions actually increased their commitment significantly.

The second study involved 579 entrepreneurs. They were asked about the motivation triggered by scepticism or approval to make things right. The results here were consistent with those of the first study. ‘The memory of a moment when someone told them they would fail led to increased motivation to pursue their business venture,’ reports Michaelis.

For the third study, the researchers recruited 417 entrepreneurs and surveyed them once a month for three months. In the first month, they established a baseline and were then able to measure the extent to which each study participant was motivated to continue their project by the so-called ‘underdog effect’ – the desire to prove all doubters wrong.

Minor deviations

The second and third surveys differed slightly from each other, but were essentially designed to assess the extent to which motivation and perseverance were influenced by the underdog effect. ‘This effect causes people to work harder, focus on their project and really commit themselves to the success of their business,’ Michaelis emphasises.

This raises questions. ‘How can we give entrepreneurs enough support to encourage their initiative, but also offer them enough resistance to help them develop the drive they need to succeed? How can we train entrepreneurs to distinguish between doubts that can serve as a motivating factor and constructive criticism that points out real flaws in a business plan?’ The researcher wants to answer these questions in further studies.