Sure, no one likes to be pessimistic—especially about something you’re putting all your time and money into. But a study published in the European Economic Review found optimistic thinking can be detrimental to your success. Researchers tracked 600 individuals ages 16 to 65 over nearly 18 years as they went from paid employees to business owners, and those with above-average optimism took in 30 percent less profit than those with below-average optimism. The reason why? Their overly-positive attitude basically blinded them from seeing the negatives of their business venture.
“As a society, we celebrate optimism and entrepreneurial thinking, but when the two combine it pays to take a reality check.” —Chris Dawson, PhD
People who are a little more pessimistic when starting a business, on the other hand, are better able to gauge if the venture is going to be a flop… and can be more open-minded to a better direction to go into. “As a society, we celebrate optimism and entrepreneurial thinking, but when the two combine it pays to take a reality check,” says study author Chris Dawson, PhD. “Optimists are more likely to be fooled into thinking that they have found a good entrepreneurial opportunity and they have what it takes to exploit it successfully. Realists and pessimists, on the other hand, are less likely to fall for these bad opportunities and less likely to progress with them.”
While pessimism isn’t exactly the most desirable trait in the world, it definitely pays off on the business front. Who knows—it could keep you from making a horrible choice and instead lead you to the success you’ve always wanted.