The Two Faces of Fear: How Low-Income Entrepreneurs Can Thrive

Fears of success and failure as drivers of poverty entrepreneurship. Source: Morris et al., (2024); Business Horizons, 67(1), 41-54.
Fears of success and failure as drivers of poverty entrepreneurship. Source: Morris et al., (2024); Business Horizons, 67(1), 41-54.

Entrepreneurship is often seen as a pathway to empowerment and overcoming adversity. However, for low-income individuals, the journey can be fraught with fear. While the fear of failure is a well-documented obstacle, a lesser-known fear can also hold them back: the fear of success.

A study published by researchers from the University of Notre Dame (USA), Indiana University (USA), Rowan University (USA), and Louisiana State University (USA) explored the role of fear as both a barrier and facilitator in the launch and development of businesses by low-income entrepreneurs and examined two main fears: fear of failure and fear of success.

“This study is one of the first to deepen our understanding of the fears commonly faced by poor entrepreneurs and, in particular, the unexpected and counterintuitive fear of success,” said Michael H. Morris, professor at the Keough School of Global Affairs at the University of Notre Dame and director of the Urban Poverty and Business Initiative, a program offered by the McKenna Center for Human Development and Global Business. “We believe it is crucial to address these fears, or they can become a behavioral barrier preventing people from navigating the uncertainties of starting a new business. We have identified several key priorities that policymakers and support organizations can focus on to work with them more effectively.”

The Two Faces of Fear: Failure and Success

While the fear of failure is a well-documented obstacle for entrepreneurs, our research sheds light on a lesser-known phenomenon: the fear of success. This seemingly contradictory concept describes the anxieties that can arise when a business begins to thrive.

  • Fear of failure: This is a common fear for all entrepreneurs, but for low-income entrepreneurs, it can be particularly paralyzing. Lack of financial security and limited access to resources can make the potential consequences of failure seem devastating.
  • Fear of success: This paradoxical fear stems from unfamiliarity with success and the potential changes it brings. Poor entrepreneurs may worry about:
    • Loss of social support: Success can create distance from their community or strain existing relationships.
    • Increased responsibility: Managing a growing business can be daunting and generate fear of losing control or disappointing others.
    • The unknown: Success can mean venturing into uncharted territory, which can be frightening.
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Understanding Fear through the Lens of Poverty

The research, which draws on data from the Urban Poverty and Business Initiative (UPBI), a global program supporting disadvantaged entrepreneurs, provides a unique perspective. Through focus groups involving over 2000 participants in 32 cities; over 90 percent of participants were people of color and 68 percent were women. Approximately 4 percent were formerly incarcerated, 2 percent were refugees, and 1 percent were women living in shelters. All came from disadvantaged backgrounds.

Disadvantaged entrepreneurs face specific obstacles that medium and high-income entrepreneurs generally do not face, said Morris, including lower levels of literacy, a scarcity mindset, significant non-business distractions, and less access to financing.

Researchers explored the nuances of fear in the context of poverty and discovered how these anxieties are navigated:

  • Reframing fear: Poor entrepreneurs can learn to view fear as a signal to prepare, not as a reason to give up. By anticipating challenges and developing mechanisms to confront them, fear becomes a motivator for growth.
  • Building confidence: The UPBI support system empowers entrepreneurs through mentoring, training, and networking opportunities. This fosters confidence and helps them believe in their ability to succeed, mitigating both the fear of failure and the fear of success.

Reconceptualizing Fear: A Double-Edged Sword

Fear, in both forms, can be a powerful motivator. Fear of failure can drive perseverance and careful planning. However, it can also foster risk aversion, hindering growth. Fear of success, on the other hand, can stem from concerns about navigating an unfamiliar financial landscape, managing increased responsibility, or losing support networks associated with a lower income level.

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Beyond Fear: Strategies for Success

By acknowledging the coexistence of fear of failure and fear of success, poor entrepreneurs can develop a more nuanced perspective of their anxieties. Ultimately, Morris and his colleagues issued five recommendations to help address these fears:

  • Provide business models to help individuals recognize different paths to successful entrepreneurship and outcomes from it;
  • Teach entrepreneurship, with an emphasis on experiential learning, where success becomes more tangible and manifests in different ways beyond mere profitability;
  • Offer mentoring, where experienced entrepreneurs help business founders understand and address the costs versus benefits of different types and degrees of success;
  • Position business creation as an option in workforce development programs (these programs traditionally focus on training participants to work for others); and,
  • Develop more flexible and holistic microfinance programs where investments are linked to incremental progress in meeting success goals and objectives.


Poor entrepreneurs face a unique set of challenges, and fear can be a significant obstacle. However, by understanding the nature of fear and its various forms, they can turn it into a force for positive change. By reframing fear as a motivator and building a strong support system, poor entrepreneurs can achieve success and build thriving businesses.

Ultimately, said Morris, while success may seem daunting and costly for disadvantaged entrepreneurs, identifying a handful of key priorities can focus and refine initiatives aimed at helping them succeed.

“We hope that educators, policymakers, and various stakeholders working with poor entrepreneurs will apply these recommendations,” he said, “and, in doing so, help them overcome their fears and embrace entrepreneurship as a viable pathway out of poverty.”

The research was funded with support from WorkRise, a research-to-action network organized by the Urban Institute.

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Michael Morris

Reference (open access)
Morris, M. H., Kuratko, D. F., Santos, S. C., & Soleimanof, S. (2024). Fear and the poverty entrepreneur: The paradox of failure and success. Business Horizons, 67(1), 41-54.

Note: Prepared with information from the press release and the scientific article.