Hmieleski Keith

Dr. Keith Hmieleski’s Research on Entrepreneurs’ Optimism is featured in The Wall Street Journal

Is your passion blinding you? A WSJ articles says founders of startups should find effective ways of tempering their rosy views with a healthy dose of reality. 

August 26,  2014

By Elaine Cole

Entrepreneurs are enthusiasts. They possess drive, ambition and passion. But sometimes that very passion is what brings about failure.

In an August 25 article in The Wall Street Journal, writer Noam Wasserman cites research by Dr. Keith Hmieleski, associate professor of management and the Robert and Edith Schumacher Faculty Fellow at TCU’s Neeley School of Business, to support the position by that an entrepreneur’s passion can destroy a startup.  

Hmieleski and his colleague Robert Baron found that optimism at startups—“the tendency to expect positive outcomes even when such expectations are not rationally justified”—was associated with a 20 percent decrease in revenue growth and a 25 percent decrease in employment growth over the subsequent two years.

The more fast-moving and quickly evolving the startup’s environment, the stronger this effect was.

Hmieleski’s research, “Entrepreneurs’ Optimism and New Venture Performance: A Social Cognitive Perspective,” first appeared in the Academy of Management Journal.

Hmieleski and Baron point out in their research that optimism isn't always a negative when building a business, but founders should find effective ways of tempering that rosy view with a dose of realism.

Wasserman writes in the WSJ: “Even after seeing the statistics on entrepreneurial missteps, many passionate founders tend to believe, ‘That won't be me; I'll avoid those problems.’ Culturally, founders are celebrated for following their natural inclinations and their intuition. However, as Steve Jobs warned, ‘Follow your heart, but check it with your head.’ Founders should educate themselves about the decisions and hurdles they are likely to face.”

Read the full article at http://online.wsj.com/articles/how-an-entrepreneur-s-passion-can-destroy-a-startup-1408912044?KEYWORDS=How+an+Entrepreneur%27s+Passion+Can+Destroy+a+Startup.