Cognitive bias
Cognitive bias has been identified as a frequent cause of business failure. Research suggests that entrepreneurs consistently exhibit greater overconfidence than people in other professions.
Shepherd and Wiklund 2006 share the following quote from one entrepreneur who “burned through more than $20 million trying to launch a Web-based business”
” ‘Looking back on it, my judgment was often terribly wrong. Unfortunately, I was never in doubt’ “
Intuition and optimism should be bolstered by empirical research of the target customers and market.
See: Successes and Failures at Research on Business Failure and Learning from It. January 2006.
Foundations and Trends® in Entrepreneurship 2(5).
