“Failure without a happy ending is not publishable” – Podcast about the dark side of entrepreneurship
Successful entrepreneurs have visions, turn them into sensational business models and only sleep 4 hours. We know this glorified image, but hardly the darker side. BFH researchers Pascal Dey and Jan Keim are investigating them. In the current episode of the BFH Wirtschaft podcast “Let’s Talk Business”, the two talk about how failure is also marketed and what social impact a cluster of start-ups has on the surrounding region.
Entrepreneurs usually get a lot of attention at the beginning – there is a kind of hype about a breakthrough, a new product or a new person. But we hardly ever talk about the downsides of this entrepreneurship. You investigate this in your research. What are the phenomena?
Jan Keim: This includes excessive stress, burnouts, family conflicts and destroyed relationships with family and friends because you are so focused on the company. But there are also negative effects on society. Various studies show that entrepreneurs do not behave in a sustainable way, even though they had committed themselves to do so, if they are politicised or not closely monitored in public. We also see companies exploiting poor working conditions in “least developed countries”. And we also see that companies mostly locate in larger urban areas where resources, skilled labour and infrastructure are available. The surrounding areas are left behind and this can contribute to political polarisation. We saw that with Brexit, for example.
The social impacts are documented in the public sphere. How can you examine the negative effects in the personal sphere?
Pascal Dey: This research is probably one of the most advanced disciplines within this overarching dark side research. Psychologists, for example, have established instruments, diagnostic tools and also treatment and prevention measures at their disposal to diagnose whether, for example, the prevalence of depression, the prevalence of anxiety disorders, the occurrence of separation is higher among entrepreneurs compared to the normal population. And they do, because the effort and time required of entrepreneurs is globally higher than what is done in other professions. In addition, there is the pressure to fail, especially if you have your own capital. This mix of aspects leads to a very high level of stress.
Entrepreneurs therefore need a certain mental and physical equipment to endure stress, risk and uncertainty. One dark side is failure. How does that show up in your research?
Jan Keim: Failure is one of the biggest topics in the dark side. There are often stories of failed entrepreneurs who have subsequently built up a successful business and then market their learning experience on a Tedx stage. That is also part of the truth, absolutely. But for many entrepreneurs, failure also means depression or anxiety. In addition, there are financial losses and perhaps broken relationships, not only of friends or family, but also investors. Failure is often a mix of internal and external factors, around 70-80% of businesses fail after five to six years. That means: the minority is not successful. Therefore, we need to shed light on this so that we can make proposals to at least mitigate the negative consequences.
Pascal Dey: An important element that has been too little understood is stigmatisation. This can have a cultural component. In Switzerland, the culture of failure is not pronounced. In a Swiss survey, 35% of respondents who had never been involved in entrepreneurship said they would not do it either. For fear that if they fail, friends, investors and society will stigmatise them. On the other hand, failure was a “non-topic” in research for a long time. This has changed in the meantime, but now failure is being researched from the perspective of “stepping stones for future success”. So failure is a learning experience that has subsequently enabled entrepreneurs to be successful. A specific context of failure is taken into account. The actual failure, which really ends in misery, without a happy ending, is not publishable.
This is a shortened version of the talk, you can hear the full length here:
All episodes of Let’s Talk Business can be found on Spotify, Apple Podcast, Deezer and Google Podcast.