Comments on: Are Entrepreneurs Victims of the Lake Wobegone Effect?

By: Simon

Simon — Fri, 09 Mar 2007 17:11:26 +0000

The only way to build a business under stressful conditions is to be optimistic. I am going through it now… and my “angel” said those very words to me today. sitting in his office he turned around to me and said “how did you think I built all of this, by being negative?”…. its a requirement to be optimistic… becuase most entrepreneurs come up against people who are pessimistic on what you are doing…

By: Matt

Matt — Thu, 07 Dec 2006 06:34:05 +0000

The thing is, there’s no such thing as “realism” in an entrepreneur. Either you think things will go well (in which case you’re classed as an optimist) or you think they’ll go badly (in which case, if you’re stupid enough to start the business _anyway_, you’re counted as a pessimist). “Realistic” is a description that can only be applied in retrospect, because no business plan ever survives first contact with the customer base.

I’d discount the significance of a study in which “accuracy of initial expectations” is counted as a necessary component of a rational view of probability. Frankly, if your initial expectations are accurate, you should quit business and go play the lottery…because that’s ultimately a matter of luck as much as skill. What counts isn’t guessing right the first time, it’s ability to adapt to the things you find out mid-stream that you guessed wrong about.

By: sean

sean — Fri, 24 Nov 2006 22:42:28 +0000

How does one quantify OVERLY optimistic?

Why would someone start a business if they were not optimistic?

By: Rob

Rob — Fri, 24 Nov 2006 20:05:10 +0000

Alexander,
That’s a good point. I’ve read Seligman’s work and I think it holds up. I guess the best way to phrase my view is that entrepreneurs need to make sure that they understand how difficult it will be, but have optimism that they can overcome it, as opposed to having optimism that their product will take off quickly and their ramp up will be easy.

By: david foster

david foster — Thu, 23 Nov 2006 20:28:27 +0000

By: Alexander Kjerulaf

Alexander Kjerulaf — Thu, 23 Nov 2006 14:44:13 +0000

That’s really interesting Rob – you always dig up the greatest articles.

Here’s a thought though: Isn’t optimism, even irrational optimism almost a requirement for entrepreneurs?

A completely delusional belief in your own magical abilities is bad, sure, but I feel that a slight tendency to overvalue your own skills and to view the situation you’re in a little more positively than the hard facts warrant is actually a startup’s best weapon.

Martin Seligman’s research showed that optimists are more successful than pessimists (I’m not sure if he ever compared realists and optimists).