There are benefits to optimism. It encourages entrepreneurs to try new things. It enables entrepreneurs to attempt the difficult, and attempt things that they may feel they don’t have the right education or experience for, but they’re willing to try anyway. We think that we can have a favorable outcome, and we’ll make a go of it as entrepreneurs if we have an optimistic outlook.

Optimism can also be contagious. If we’re optimistic, it tends to influence our team to be optimistic, as well as our partners and our investors to share in our enthusiasm and excitement.

It’s important to note that there are cons to being overly optimistic. We may overlook critical elements because we want to dive right in. We may discount uncertainties. Were we to do more research and analysis, we would be better prepared. If we are overly optimistic, we’ll accept undue levels of risk. This can contribute to excessive business losses or complete failure of the venture. While I champion being optimistic, I do not discourage your being research-driven and strategy-minded.

There is also a bias to be aware of. Most of us underestimate our chances of divorce or losing a job or having disease. We overestimate the likelihood of our children being academically gifted, of what level of wealth we will achieve, and how long we will live. To learn more, I encourage you to view the TED talk titled The Optimism Bias.

We should seek balanced optimism. With that balance, we want to think about the relative costs of pessimism versus the benefits of optimism. We want to recognize the importance of balance in understanding the relative levels of powers and influence. And we want to think about, how do you do that? How do you get on this balanced path?