On any given day, the average entrepreneur might feel proud, enthusiastic, and absolutely bursting with energy and joy. But 24 hours later, that same founder might just feel completely different. And once you factor in a crisis like the pandemic, with chaos the norm and almost nothing predictable, it’s easy to understand why founders regularly cycle between positive and negative emotions.
As it turns out, how entrepreneurs feel influences how they think and behave, according to entrepreneurship research. So, the emotions you feel will affect how you make decisions, perform your daily tasks, and maybe even determine whether your firm ultimately succeeds or fails.
You should be aware of how emotions impact your business because it can build the ability to recognize, evaluate, and control emotions in yourself and others. This emotional intelligence can also make you a better manager and leader. Numerous studies of organizational behavior have found that emotional intelligence is important for workers, too, and that it influences how non-entrepreneurs act and feel on the job—in some cases affecting factors such as productivity and job satisfaction. It’s really like having a superpower.
A team of researchers at Lehigh University and Lehigh@NasdaqCenter conducted a systematic literature review of 96 academic articles from 27 highly reputable entrepreneurship and management journals to better understand the role emotions play in entrepreneurship. Toward this end, we applied Nvivo, a qualitative data analysis software.
The resulting thematic analysis helped us identify six key takeaways that can help you know what to expect and how to deal with all the ups and downs that inevitably lay ahead in your entrepreneurial journey.
Find the value in negative emotions
Entrepreneurs can succeed even without feeling like sunshine all the time. Dark emotions such as fear and distress can sharpen your ability to learn from failure, devise stronger strategies, and motivate you to keep trying. Anger, for example, increases your propensity to exploit an opportunity that you have identified by 16%. Negative emotions like fear and anxiety strengthen your efforts to process information that questions your closely held beliefs and expectations, making you more open to feedback and mentor advice that runs counter to your thinking.
Know that positive emotions may boost your bottom line
Research shows that positive emotions like enthusiasm and contentment fuel your motivation and can even grow your sales by 12%. If you’re feeling positive, you’re more likely to search for information you need and to detect patterns among the details that will broaden the scope of your knowledge.
Positive emotions also help fortify you against the intense stress that could leave you vulnerable to poor judgment and mistakes. They make you more alert and better equip you to identify, evaluate, and exploit entrepreneurial opportunities, inspiring you to create and pursue new ideas. They enhance your ability to persuade others to take actions, enabling you to acquire resources financial and non-financial, whether it’s the social capital gained through networking or the investments from shareholders that ultimately power your venture. If you’re feeling positive, you’re also more likely to go above and beyond the call of duty, handling tasks that require not only immediate attention but also long-term strategy.
Observe how positive emotions can be misleading
Just as negative emotions can be positive, positive emotions can be negative. Positive emotions such as confidence and zeal can promote optimism bias, a phenomenon that diminishes your perception of risk and causes you to underestimate the likelihood of a negative outcome. Optimism also may leave you susceptible to what is called the “planning fallacy,” in which you underestimate how much time will be needed to complete a future task.
Understand that your emotions can be contagious
Researchers have unveiled a phenomenon called “emotional mimicry.” A positive emotion like passion for a project is transferred from entrepreneurs to the employees, increasing chances the firm will be successful.
Similarly, if a founder is feeling positive emotions, such as enthusiasm and happiness, this can be beneficial in interactions with potential investors, inspiring confidence and raising the odds of securing funding by 32%.
Alternatively, specific negative emotions like anger or envy can “infect” others and lead to negative firm outcomes. No wonder, because entrepreneurship is a team effort. So, how an individual feels could eventually translate into how the organization as a whole feels.
Learn to recognize your emotional triggers
Certain emotions unavoidably come with the territory if you’re an entrepreneur. Self-employment triggers positive emotions like joy and contentment 17% more than for those employed. Encouraging, right?
But here’s the catch: Being your own boss also sets off negative emotions like fear of failure, conflict among team members, and counterfactual thinking (imagining how events in your life might have turned out differently with what-if scenarios) that can dampen this effect. Knowing thyself can go far toward helping you better manage emotions that inevitably surface in the throes of starting your own business.
Stay healthy (and please get enough sleep)
Maintaining a healthy lifestyle benefits you not only physically but also also contributes to your emotional wellbeing and possibly your firm’s success. Naturally, you should exercise regularly and eat nutritiously. But quality of sleep is also an important influence for entrepreneurs, research has found. Sleeping well improves the likelihood of positive moods by 31.5%. High-quality sleep can lead to feelings of excitement and inspiration. So, yes, getting enough sleep can be good for business.
Establishing and maintaining your own venture is nothing if not personal. Going into business for yourself means hitching a ride on an emotional roller coaster. But heightened awareness of your emotional states—and, equally important, what they mean and how they can affect your startup— brings you a step closer to building the emotional intelligence that can serve as your secret superpower.
Willy Das is a postdoctoral researcher at Lehigh@NasdaqCenter, an exclusive education-industry partnership between Lehigh University and the Nasdaq Entrepreneurial Center in San Francisco.
Andreea Kiss is associate professor in the management department and director of the entrepreneurship minor program at Lehigh University.
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