Top entrepreneurs driven by self-belief and failure, research finds

Self-employed people are often motivated by a strong belief in their own competency, according to new research, but also have the ability to use failure as a learning experience.

The research was published by Independent Contractors Australia, a not-for-profit formed to protect the rights of independent contractors in Australia.

Keen to offer insight into the motivations of self-employed people, the ICA published extracts from three papers on the psychology of self-employed entrepreneurs.

One of the papers suggests entrepreneurs have a high belief in their own ability, which motivates them to effect change and deliver outcomes.

“The process of entrepreneurship involves choices, and the actual choice to start a business is only made by a subset of people interested in entrepreneurship – those who positively assess opportunities, accept risk, and ultimately initiate entrepreneurial action,” it said.

“While traits such as need for achievement or tolerance for ambiguity may not differentiate those who pursue an opportunity, differences in the perceptions of resources relative to opportunity may impact entrepreneurial intention.”

“This perception may be affected by an individual’s self-efficacy.”

In essence, the decision to be and remain an entrepreneur is driven by the belief in one’s competency.

Another paper indicates self-employed people are motivated to persevere because of their ability to use failure as a learning experience.

“Due to the amount of uncertainty and risk involved in entrepreneurial endeavors, failure is a built-in component of entrepreneurship,” it said.

“We argue that entrepreneurs’ prior failure experience can contribute to their transformational leadership.”

“The contribution of failure is mediated by entrepreneurial learning, which involves both internalisation and transformation of failure experience.”

It’s argued entrepreneurs’ learning from failure is moderated by their emotional intelligence and goal orientation, in addition to the way in which failure is viewed in their society.

“We expect entrepreneurs with higher EI (emotional intelligence) and stronger learning goal orientation to more effectively seize the learning opportunities presented by failure,” it said.

“Those with lower EI and stronger performance goal orientation [are expected] to be less efficacious in learning from failure.”

“We also expect a more normalised view of failure to better facilitate entrepreneurial learning from failure.”

The findings on entrepreneurs’ attitude to failure reflect the viewpoint of tech veteran Mick Liubinskas, who believes being an entrepreneur is a combination of failing and learning, or what he dubs “flearn”.

“Australia doesn’t embrace failure because life is so darn good – why have the ambition to bother trying and… risk failing?” Liubinskas says.

Liubinskas says entrepreneurs must accept failure is inevitable, and should therefore embrace it.

“You will always fail and learn your way to success, so embrace it… All learnings from failings are beneficial,” he says.