In fact, most performance blocks and poor performances are a direct result of the athlete being preoccupied with failing or messing up. You can't learn to walk without falling enough times. Each time that you fall your body gets valuable information on how to do it better. You can't be successful or have peak performances if you are concerned with losing or failing. Teach your child how to view setbacks, mistakes and risk-taking positively and you'll have given him the key to a lifetime of success.
Failure is the perfect stepping stone to success.
Performance studies clearly indicate that while threats may provide short term results, the long term costs in terms of psychological health and performance are devastating. Using fear as a motivator is probably one of the worst dynamics you could set up with your child. Threats take the fun out of performance and directly lead to your child performing terribly. Communicating this lack of belief, even indirectly is further devastating to the child's performance. A challenge does not entail loss or negative consequences should the athlete fail.