Entrepreneurs' attitudes towards failure: An experiential learning approach

Abstract

Purpose: This paper employs theories of experiential learning to examine why some entrepreneurs have developed a more positive attitude towards failures compared to others. Design/methodology/approach: The paper conducts statistical analysis on a sample of 231 Swedish entrepreneurs that have started new independent firms in 2004. Findings: The empirical findings support the guiding proposition that more favourable attitudes towards failure could be learned through entrepreneurs' life and work. The results suggest that previous start up experience is strongly associated with a more positive attitude towards failure. The paper also finds that experience from closing down a business is associated with a more positive attitude towards failure. In addition, a more fine‐grained analysis suggests that experience from closing down a business due to reasons of poor performance is a highly valuable source of learning while closure due to more personal reasons does not lead to the same result. Research limitations/implications: In sum, the findings add to the knowledge of why some entrepreneurs have a more positive attitude towards failure compared to others. It also provides some general implications for the understanding of entrepreneurial learning as an experiential process. Practical implications: A positive attitude toward failure might be a significant asset for entrepreneurs as it might help them to deal with and learn from their mistakes and to move forward. The results indicate that the attitudes toward failure are not homogeneous among entrepreneurs. Rather, this attitude can, at least to some degree, be influenced due to new experiences and new information. Originality/value: The paper provides novel insights with regard to the role that critical career experiences can play for the development of entrepreneurs' attitudes towards failure.