(Not) Learning from Failure? The Heavy Toll of Stigma on Entrepreneurs

Abstract

The pursuit of entrepreneurial opportunities is not always successful. On the one hand, entrepreneurial failure offers an invaluable opportunity for entrepreneurs to learn about their ventures and themselves. On the other hand, entrepreneurial failure is associated with substantial financial, psychological, and social costs. When entrepreneurs fail to learn from failure, the potential value of this experience is not fully utilized and these costs will have been incurred in vain. In this chapter, the authors investigate how the stigma of failure exacerbates the various costs of failure, thereby making learning from failure much more difficult. The authors combine an analysis of interviews of 20 entrepreneurs (who had, at the time of interview, experienced failure) with an examination of archival data reflecting the legal and cultural environment around their ventures. The authors find that stigma worsens the entrepreneurs’ experience of failure, hinders their transformation of failure experience, and eventually prevents them from utilizing the lessons learnt from failure in their future entrepreneurial activities. The authors discuss the implications of the findings for the entrepreneurship research and economic policies.

Citation

He, V.F. and Krähenmann, G. (2021), "(Not) Learning from Failure? The Heavy Toll of Stigma on Entrepreneurs", Todt, G., Backmann, J. and Weiss, M. (Ed.) Work Life After Failure?: How Employees Bounce Back, Learn, and Recover from Work-Related Setbacks, Emerald Publishing Limited, Leeds, pp. 143-171. https://doi.org/10.1108/978-1-83867-519-620211018