Entrepreneur Optimism: Why It's So Dangerous

Optimism is a good thing, but it can also be dangerous if not tempered with reality. Being too optimistic about your new business idea can cause you to skip steps that are absolutely critical in determining whether the idea will succeed or fail.

This blog post will explore why being an optimist entrepreneur can lead you astray and how you should avoid this pitfall.

Everyone wants to be their own boss.

The number one reason people give for wanting to start a business is to be their own boss. A lot of people express this desire to be their own boss, but most will never actually take the leap

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But, when someone with the desire to take control by starting their own business finally decides to take that leap, there is usually some tipping point or situation that drove them to go for it.

The "That's a great idea!" false positive.

Many times the seed for this tipping point starts when they share their business idea with someone and the response they get is “Wow, That’s a great Idea!”. The wanna be entrepreneur hears that and it immediately becomes part of the inner dialogue that supports their idea. They become optimistic that they could actually start their own business with this idea.

This scenario is usually repeated with various friends, family or co-workers and every positive response drives their optimism higher.

The overly-optimistic entrepreneur.

Unfortunately, many entrepreneurs become overly-optimistic and they let that optimism cloud their judgement. They become convinced that they actually do have a 'great idea' that just can't miss. Their optimism that their new business can't fail drives them to move forward without making the effort to do the market research and data that is required to truly validate their new business idea.

While optimism is generally a valuable trait for entrepreneurs, optimism without a certain level of pessimism can become a fatal flaw.

Too much optimism drives bad decisions.

A 2018 study conducted by researchers at the London School of Economics, found that over-optimistic folks are more likely to start ill-conceived businesses that are doomed to failure from the start.

These failures begin when the entrepreneur bases their initial business decisions on an overly optimistic view of their new business idea. This over-optimism is one of the motivating factors that drive people to go all in on their idea without taking the critical step of conducting a sufficient level of research with the actual target market for their new business idea.

The critical first step is validation with actual customers.

The friends, family and co-workers that tell you that you have a great idea most likely do not fit the profile of actual customers and their input will always be biased. You must not depend on input from those that are NOT in your target market.

To ensure the success of any new business idea, it must be validated by individuals who are actually in the target market for the business. If you become overly-confident and decide not to conduct a thorough market research initiative, you are gambling that your new business will succeed and the odds are not in your favor.

You have to know that there is a market for your business.

One of the most common pitfalls for entrepreneurs, especially optimists, is not doing enough data gathering and validation with their target audience.

Business experts all agree that it is critically important to do the necessary market research before launching your new business idea.

You must conduct effective market research in order to validate your potential customer base's interest in buying what you are selling.

This is the only way you can be confident that when it comes time to launch your business idea or product into the marketplace; it will have a chance at success because of all the hard work put into making sure it meets an actual need within its niche.