Grief after business failure: the harder evidence.
Grief after business failure is real and can last more than two years, according to German data. Hiring can also be slower for former founders. However, the pain is something you can prepare for, while permanent ruin almost never arrives.
Grief after business failure in Germany and Sweden.
A German survey followed the same people from 1985 to 2017. When owners became unemployed, life satisfaction after business closure dropped 1.4 points on a ten-point scale. Also, many failed to adapt even two or more years later. In Sweden, the more someone saw failure as a personal loss, the deeper the grief.
When the door opens slowly.
In a 2023 Yale field experiment, job applications differed only by founder experience. As a result, former founders got fewer callbacks for software engineering jobs. So a former founder job search may take longer than you expect. Employers worried about fit and commitment rather than ability.
The pain you can prepare for.
Every study has a weakness, since founders are not random people. Still, the honest summary is clear. A failure can cost sleep, friendships, confidence and income, but almost never your future. Therefore, prepare with six months of savings, a field to return to, and people you'd tell early.
Prepare for grief after business failure tonight.
Write how much of your identity you would pour into the business, on a scale of one to ten.
Name three people you would tell early instead of hiding from if your business closed.
Questions about grief after business failure.
How long can grief after business failure last?
German data showed former owners failing to adapt even two or more years after an involuntary exit.
Did the German study find physical health effects?
No. Costs were mainly psychological, with no change in self-reported physical health, smoking or drinking.
Why might former founders struggle to get hired?
Yale researchers pointed to employers' worries about fit and commitment, not doubts about ability.
Read the whole chapter.
This lesson covers one section of chapter 6, “What happened to the people it happened to”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Worst case scenario business failure: the real shape.
- 02 Earnings after failed startup: what records show.
- 03 Hidden costs of startup failure: what it cost me.
- 04 Starting again after a failed business: two stories.
- 05 Grief after business failure: the harder evidence.
- 06 Talk to someone who closed a business: the interview.
- 07 Startup failure post mortems: when nobody will talk.