A recent study highlights the significant role that a growth mindset plays in helping entrepreneurs cope with business challenges. The research suggests that founders who believe their approach to managing business resources can evolve tend to respond more constructively to setbacks. In particular, entrepreneurs who view their habits around saving or spending resources as adaptable are more likely to remain resilient when their ventures encounter difficulties. Rather than seeing frugality as a fixed trait, these individuals recognise it as a behaviour that can be developed and refined, which appears to strengthen their ability to deal with adversity.

According to Jeff Pollack, the study’s corresponding author, entrepreneurs frequently encounter obstacles, yet relatively little is known about what shapes their responses to those experiences. Some individuals assume that frugality is simply part of a person’s personality and therefore unlikely to change. Others take a different view, believing that people can gradually become more disciplined and resource-conscious over time. Pollack and his colleagues were interested in examining whether these differing beliefs influence how entrepreneurs emotionally and mentally process setbacks connected to their ventures.

The researchers focused particularly on how attitudes about frugality might affect three important aspects of response: negative emotional reactions, optimism about future success, and the strategies entrepreneurs use to cope with challenges. Pollack, who serves as the Lynn T. Clark II Distinguished Professor of Entrepreneurship at the Poole College of Management at North Carolina State University, explained that the goal was to understand whether a flexible mindset regarding resource management could shape the way founders interpret and recover from difficult moments in business.

To investigate this question, the research team surveyed 709 entrepreneurs through an online study. Participants were first defined as frugal and then asked several questions designed to measure their underlying beliefs about whether frugal behaviour can change over time. After establishing these baseline attitudes, participants were asked to recall a specific moment when their venture experienced a setback. They then answered a series of questions examining how they reacted to that situation, including their emotional responses, their expectations for future outcomes, and the coping strategies they employed.

The results revealed a strong link between a growth-oriented mindset and greater adaptability when facing entrepreneurial challenges. Individuals who believed that frugality could be learned or improved tended to remain more hopeful about their prospects after encountering difficulties. They were also less likely to become discouraged and were more inclined to invest effort into identifying solutions and exploring new approaches. In contrast, those who viewed frugality as an unchangeable trait were more likely to feel stuck or overwhelmed when confronted with setbacks. Co-author Jon Carr, the Jenkins Distinguished Professor of Entrepreneurship at North Carolina State University, noted that this growth mindset appeared to encourage positive adjustments rather than prolonged frustration.

To strengthen the reliability of their findings, the researchers conducted a second study involving an additional 281 participants. The results of this follow-up investigation closely mirrored those of the first, reinforcing the connection between growth-oriented beliefs and entrepreneurial resilience. Pollack emphasised that everyone encounters setbacks at some point, especially in the uncertain world of entrepreneurship. However, the research suggests that the way individuals interpret their own abilities can shape how effectively they recover. Importantly, mindsets are not fixed; they can be influenced and developed. Carr added that this insight offers a practical takeaway for entrepreneurs and organisations that support them: cultivating a mindset focused on growth and improvement can make a meaningful difference in how challenges are handled and overcome.

More information: Jeff Pollack et al, A stronger growth mindset of frugality predicts entrepreneurs’ responses to setbacks in resourcefulness behavior, Journal of Business Venturing Insights. DOI: 10.1016/j.jbvi.2026.e00599

Journal information: Journal of Business Venturing Insights Provided by North Carolina State University