Rising from the Ashes: Cognitive Determinants of Venture Growth after Entrepreneurial Failure

Abstract

How does previous entrepreneurial failure influence future entrepreneurship? More specifically, under what conditions do entrepreneurs who rebound from failure do better in the next round? Drawing on the cognitive literature in attribution and motivation, we focus on entrepreneurs’ reaction to failure and the growth of their subsequent ventures. Leveraging a survey database of new–venture founders with failure experiences, we investigate how their internal attribution of the cause of failure, their intrinsic motivation to start up another business after failure, and the extent of their failure experiences impact the growth of their subsequent ventures.

The Improvisational Entrepreneur: Improvisation Training in Entrepreneurship Education

“…How an entrepreneur "chooses" to respond to these unexpected events can have serious ramifications. These ramifications can lead entrepreneurs to question their motivation to continue with the venture or to give up, due to the feeling of failure (Delmar and Wiklund 2008;Yamakawa, Peng, and Deeds 2015). Entrepreneurial self-efficacy has been used to describe entrepreneurs who can adapt to the unexpected and manage, or even thrive in uncertainty.…”

Team learning from setbacks: A study in the context of start‐up teams

“…In contrast to this perspective, setbacks are also praised as an important source for learning in management and entrepreneurship (Carmeli & Gittell, 2009;McGrath, 1999;Tjosvold, Yu, & Hui, 2004;Yamakawa, Peng, & Deeds, 2015). They are considered valuable experiences for teaching lessons and developing new knowledge, skills, behaviors, and attitudes (Cannon & Edmondson, 2001;Cope, 2005).…”

“…Third, given that the majority of studies on learning after setbacks have focused on the individual level (e.g., Carmeli & Gittell, 2009;Cope, 2011;Shepherd, 2003;Yamakawa et al, 2015), we extend this theory by focusing on the team level. First, this view is relevant to theory, as setbacks are often collectively experienced by team members (Välikangas et al, 2009;Wang & Chugh, 2014), and learning as a team is important for continuing a common endeavor and being successful (Edmondson & Nembhard, 2009;Gatewood et al, 1995).…”

New Research Directions in the Institution-Based View

“…My motivation stemmed from my dissatisfaction with the "anti-failure" bias in much of the scholarly literature and popular press about entrepreneurship (Lee et al, 2007). This bias can be found by the overwhelming interest in entrepreneurial success and the very limited interest in entrepreneurial failure (Yamakawa, Peng, & Deeds, 2014). Although a majority of entrepreneurs fail, the scholarly and popular literature tends to lionize the few shining examples of success and essentially urge a new generation to learn from the successful entrepreneurs' highly idiosyncratic and lucky!…”

“…Please provide the volume number and page range for reference "Yamakawa et al, 2014". AU:4 Please provide the working paper number for reference "Zoogah et al 2013". …”