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A multivariate analysis of variance was performed on the data for the items described above;  in this analysis, Group (Entrepreneurs, Would-Be Entrepreneurs, Non-Entrepreneurs) was the independent variable.  This analysis yielded a significant effect for group, F(10,50) = 2.36, p < .025, thus indicating that the three groups of participants differed in their responses to the questionnaire items.

Follow-up univariate analyses indicated that this significant multivariate effect stemmed from significant differences between the groups with respect to all relevant dependent measures: the number of regrets experienced  F(2,81) ) = 4.75 p < .01, frequency of engaging in counterfactual thinking, F(2,80) = 3.79, p < .03, the extent to which they experienced regret over missed opportunities, F(2,82) = 3.62, p < .03, and their feelings when they thought about such missed opportunities, F(2,1) = 3.68, p <  .03.  Inspection of the relevant means (see Table 1), however, indicated that all these significant effects were opposite to initial predictions. Entrepreneurs reported significantly fewer total regrets (did not do and did regrets) than would-be entrepreneurs who, in turn, experienced significantly fewer regrets than non-entrepreneurs. Similarly, entrepreneurs reported engaging in counterfactual thinking significantly more often than would-be entrepreneurs, and  reported experiencing less regret over missed opportunities than would-be entrepreneurs.  Finally,  would-be entrepreneurs reported significantly more negative feelings as a result of thinking about missed opportunities than either entrepreneurs or non-entrepreneurs.


The results of this study provide additional support for the view that a cognitive perspective may prove useful in the study of entrepreneurship.  This perspective suggests that entrepreneurs and other persons differ with respect to several cognitive processes-that is, in the ways in which they think about certain events and situations.  The present findings suggest that entrepreneurs and nonentrepreneurs differ in terms of counterfactual thinking, the tendency to imagine what might have occurred in situations involving missed opportunities if different actions had been taken.  However, contrary to initial predictions, entrepreneurs did not report engaging in such thinking more often  than others persons or experiencing more intense regrets when they did entertain such thoughts.  In fact, entrepreneurs actually reported less intense regret over missed opportunities, and fewer  regrets overall, than would-be entrepreneurs or nonentrepreneurs.  What factors account for this unexpected pattern of findings? Only further research employing additional measures can provide a clear-cut answer.  However, one possibility will now be briefly described.


Tendency to Search for New Opportunities, Frequency of Regrets, and Intensity of Regrets over Missed Opportunities Among Entrepreneurs, Would-Be Entrepreneurs, and Nonentrepreneurs1

As noted earlier in this paper, entrepreneurs, in their thinking about a wide range of business situations, tend to emphasize the strengths, opportunities, and potential for gain of these situations to a greater extent than other persons (e.g., Palich & Bagby, 1995).  This tendency to "accentuate the positive" may help explain why they reported weaker regrets over missed opportunities than other persons in the present study. Specifically, to the extent entrepreneurs tend to view many situations in positive terms, they may have little reason for agonizing over a particular missed opportunity:  from their perspective, another is sure to come along.  In short, their tendency to view many situations in positive terms may counteract, and perhaps overwhelm, entrepreneurs' tendency to experience regrets over missed opportunities.

This reasoning is supported by the comments offered by several entrepreneurs after completing the survey.  Their remarks suggested that entrepreneurs realize, to a greater extent than other persons, that new opportunities abound;  thus, missing one is not very disturbing, since others are sure to arise. As one entrepreneur put it, "The hard part isn't finding something worth doing-it's making it work." The possible role of such factors can be readily investigated in further studies that include dependent measures of entrepreneurs' perceptions concerning the frequency and availability of opportunities.

At this point, it may be useful to address a basic question pertaining to the cognitive perspective that underlies the present research:  Why should entrepreneurs think differently than other persons?  One answer is suggested by the findings of basic research on human cognition, which point to the following conclusions: (Barsalou, 1996; Fiske & Taylor,  1991):
As human beings, we have limited information processing capacity that can be readily exceeded by the demands of the complex world around us, 
Partly to avoid such information overload and partly to minimize cognitive effort generally, we make use of many mental-short-cuts, 
While these short-cuts do often succeed in reducing cognitive effort, they also frequently serve as sources of error and bias in our thinking,
Additional findings suggest that our tendency to use mental short-cuts-and hence our susceptibility to several sources of error and bias-is increased when we confront situations that  are new and unfamiliar (and therefore produce information overload), when our emotions run high, and when we must face high levels of stress and time pressure (e.g., Forgas, 1995;  Roese, 1997).  Unfortunately, these are precisely the conditions often confronted by entrepreneurs. By the very nature of their activities, entrepreneurs often find themselves in situations that are new, complex, unpredictable, and therefore likely to produce information overload.  Similarly, the length of their work-week is legendary, so they often meet these demands when fatigued or while experiencing high levels of stress.  Finally, entrepreneurs' commitment to their ideas and businesses is often intense, so it is reasonable to suggest that many opportunities exist for the powerful emotions stemming from such commitment to influence their thinking.

Descriptions of entrepreneurship generally seem to paint a picture consistent with these suggestions.  For instance, writing more than sixty years ago, Schumpeter (1934, p. 7) noted that:  "The entrepreneur seeks to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility... Entrepreneurship essentially consists in doing things that are not generally done in the ordinary course of business routine." (Italics added.) Similarly, in a more recent description of entrepreneurs, Holt (1992, p. 11) proposed that "Entrepreneurs are those who incubate new ideas, start enterprises based on those ideas...have vision for growth, commitment to constructive change, persistence to gather necessary resources, and energy to achieve unusual results.." (Italics added.)  Such descriptions do seem to suggest that entrepreneurs, more than other persons, regularly find themselves in situations that test the limits of their cognitive capacities, and so, it is argued here, increase their susceptibility to various forms of bias or error.

Assuming that this reasoning is correct, and that entrepreneurs do often operate in situations that would tend to increase their susceptibility to various forms of cognitive bias, what are the implications for the study of entrepreneurship?  Two seem worthy of special note.  First, to the extent that their efforts to "create something of value out of nothing" do place entrepreneurs at greater risk than others for various forms of cognitive bias and error, it is important to identify these potential sources of error.  Thus, it would seem fruitful to create conceptual bridges between the vast literature on human cognition and the study of entrepreneurship..  While entrepreneurship is certainly a unique field with its own rich set of problems and issues (Venkataraman, in press), there seems no logical reason why it could not benefit from drawing on the cognitive perspective, which has proven highly informative in the study of many aspects of human behavior (e.g., Baron & Byrne, 1997).  Encouraging such intellectual cross-fertilization is one of the major goals of the research reported here.

Second, if the hectic, exciting, and rewarding, but also overloaded and high-stress lives of entrepreneurs do indeed place entrepreneurs at considerable risk for various cognitive errors, then the possibility exists that identifying these might lead to the development of techniques to assist entrepreneurs in avoiding such pitfalls. While personal traits and characteristics can be changed only with considerable difficulty, a large body of research findings suggest that patterns of thought-and errors stemming from them-are often more amenable to change (e.g., O'Donohue & Krasner, 1996).  Thus, not only does a cognitive perspective offer entrepreneurship new conceptual tools useful in basic research;  it may also contribute to the development of effective interventions for assisting practicing entrepreneurs.  Such procedures have proven valuable in other areas of research-for instance, in improving the accuracy of performance appraisals (e.g., Day & Sulsky, 1995)-and there seems no logical reason why they could not be of value to entrepreneurs as well.

To conclude:  the present findings suggest that a cognitive process found to influence behavior in many situations-counterfactual thinking-may also play a role in entrepreneurship.  The precise role of counterfactual thinking and the regrets over missed opportunities it often generates, remain to be elucidated.  However, the findings reported here suggest that introducing this and other cognitive mechanisms into the study of entrepreneurship may provide researchers with important conceptual tools invaluable in understanding not only "the mind of the entrepreneur" (Timmons, 1994),  but also factors that influence entrepreneurs' success  as well.
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