Are Entrepreneurs Optimistic, Realistic, Both or Fuzzy? Relationship between Entrepreneurial Traits and Entrepreneurial Learning

INTRODUCTION Optimistic thinking, reactions and feelings are frequently studied in psychology. Optimism is a common attribute cited in entrepreneurship research when describing entrepreneurial individuals. Most researchers agree that optimism implies "a general disposition to expect the best in all things". Unfortunately entrepreneurship research has not provided empirical evidence that demonstrates whether or not entrepreneurs are optimistic, levels of optimism among different entrepreneurs, and how optimism relates to decisions and learning experiences in new venture formation. Many questions remain unanswered such as: Are entrepreneurs really optimistic? Have we mixed the concept of optimism with "positive illusion" (Ottesen & Gronhug, 2005, p. 405) which is a misperception of oneself and the environment that can lead to faulty investment and failure? Have we overstated the effects of optimism on new venture creation without exploring other possible characteristics such as realism? More (1998) discussed the possibility for people to be both optimistic and realistic--those of us who think of ourselves as rational, clear headed, may say "I am neither an optimist nor a pessimist, I am a realist. " He felt that individuals intend to express a commitment to truth, sound judgment and rationality in making such a statement and that the nature of the world meant that to be realistic we normally had to be optimistic. Since we could find no definition for realism in the entrepreneurship literature, we use dictionary definitions. Dictionary.com Unabridged (v 1.1) (2008) defines realism as . "Interest in or concern for the actual or real, as distinguished from the , speculative and the tendency to view or represent things as they really are. " The American Heritage (2000) definition includes: "An inclination toward literal truth and pragmatism. The representation in art or literature of objects, actions, or social conditions as they actually are, without idealization or presentation in form. " YourDictionary.com (2008) defines realism as "a tendency to face facts and be practical rather than imaginative or visionary. " These definitions provide a working base for this research. For purposes of this research, we think that realistic entrepreneurs are more likely to give more serious, careful consideration of their actions and seek information that will allow them to make decisions with reasonable judgment. It is important for researchers to recognize that entrepreneurs, the center of new venture creation, who capitalize intellectual and physical assets in the process of wealth creation by discovering and transforming unique opportunities into new ventures. While entrepreneurship researchers often attribute optimism to entrepreneurs and discuss the consequences for new venture creation, there has been very little empirical data to prove that entrepreneurs are optimistic and how that optimism influences personal decisions and learning experiences in new venture creation. In addition, no tool has been developed in either psychology or entrepreneurship to measure "realism. " We know that it is reasonable to assume that unrealistic optimism can lead to problems in new ventures. The question is--how do we measure optimism and realism before so that can explore ideas such as "realistic optimism" or "unrealistic optimism"? This article presents some of the first empirical evidence to determine (1) if entrepreneurs are optimistic or realistic, (2) different levels of optimism and realism among entrepreneurs, and (3) how optimism and realism relate to entrepreneurs' demographics, characteristics and learning in new venture creation. Four categories of entrepreneurial traits were defined for this study: optimistic, realistic, both or mixed optimistic/realistic, and fuzzy (neither optimistic nor realistic). This study is among the first to (1) adopt the Life Orientation Test--Revised (a tool commonly used in psychological research) to study entrepreneurial optimism; (2) create a new tool to measure realism, (3) create a bridge between a conceptualized framework in entrepreneurship and psychology to examine human nature; and (4) analyze the relationship, if one exists, between optimism/realism and other variables associated with entrepreneurial individuals. …