Fixed vs. Growth Mindset: Why Your Entrepreneurial Success Isn’t Set in Stone

This is article 1 of 6 in our Growth Mindset for Entrepreneurs series.

20% of small businesses fail within their first year, and 50% don’t make it past year five. When researchers dig deeper into what separates the businesses that thrive from those that merely survive (or fail), it’s not always the factors you’d expect. It’s not just about having the best product, the most funding, or even being in the right market at the right time.

One of the most significant predictors of long-term entrepreneurial success is something you might not have on your business plan: your mindset.

Stanford psychologist Carol Dweck’s groundbreaking research on “growth mindset” has revolutionized how we understand success in education, sports, and increasingly, in business. For entrepreneurs and small business owners, this research reveals a critical truth: your beliefs about your own abilities directly impact your business outcomes.

In this six-part series, we’ll explore how cultivating a growth mindset can transform not just how you think about challenges, but how you build teams, serve customers, and ultimately, how you grow your business. Today, we start with the foundation: understanding what a growth mindset really means for an entrepreneur.

The Two Mindsets That Shape Your Business Journey

Fixed Mindset and the Entrepreneurial Trap

Entrepreneurs with a fixed mindset operate from a fundamental belief that their abilities, intelligence, and talents are static traits. In the business world, this shows up in several limiting ways:

“I’m either a natural entrepreneur or I’m not.”

This belief leads to seeing early struggles as confirmation that you’re not "cut out" for business ownership. When faced with challenges like cash flow problems, difficult employees, or market downturns, the fixed mindset entrepreneur thinks, "Maybe I’m just not good at this."

Avoiding challenges that might reveal weaknesses.

Fixed mindset business owners often stick to what they know they can do well, avoiding new opportunities, technologies, or markets that might expose their limitations. They might skip networking events, avoid learning new software, or refuse to delegate because they fear looking incompetent.

Taking criticism personally.

When customers complain, employees provide feedback, or advisors offer suggestions, the fixed mindset entrepreneur hears an attack on their character rather than valuable information. A negative online review becomes evidence that they’re a failure, rather than data about how to improve.

Feeling threatened by others’ success.

Competitors’ victories, employees’ achievements, or even customers’ growth can trigger feelings of inadequacy. The fixed mindset sees success as a zero-sum game—someone else’s win diminishes their own potential.

Growth Mindset as an Entrepreneurial Advantage

Entrepreneurs with a growth mindset believe that abilities and intelligence can be developed through effort, strategy, and learning from others. This fundamental shift in perspective creates powerful advantages:

“I can develop my entrepreneurial skills.”

Every challenge becomes an opportunity to build capability. Cash flow problems become lessons in financial management. Difficult employees become opportunities to develop leadership skills. Market downturns become chances to innovate and adapt.

Embracing challenges as learning opportunities.

Growth mindset entrepreneurs actively seek out situations that stretch their abilities. They’re the ones launching new product lines, entering unfamiliar markets, or taking on bigger clients—not because it’s easy, but because it’s how they grow.

Using feedback as fuel for improvement.

Customer complaints are treated as market research. Employee suggestions are seen as opportunities to optimize operations. Even harsh criticism from advisors is welcomed as a chance to see blind spots and improve systems.

Celebrating others’ success as inspiration.

When competitors succeed, growth mindset entrepreneurs study their strategies. When employees excel, they’re promoted and given more responsibility. Customer success stories become case studies for serving others better.

The Science Behind the Mindset Advantage

Why does mindset matter so much for business success? The answer lies in how our brains actually work.

Neuroscience research has shown that our brains remain “plastic” throughout our lives, meaning we can literally rewire our neural pathways through practice and experience. When you believe you can improve at something, you’re more likely to put in the effort required to create those new neural connections.

For entrepreneurs, this means that every business skill, from sales and marketing to leadership and financial management, can be developed and improved. The entrepreneur who believes this approaches each business challenge as a learning opportunity, while the entrepreneur who doesn’t often gives up too quickly or avoids growth opportunities altogether.

Research conducted with business leaders has shown that those with growth mindsets tend to:

• Recover from setbacks more quickly and completely
• Take more calculated risks that lead to innovation
• Build stronger teams through better coaching and development
• Adapt more readily to changing market conditions
• Maintain higher levels of motivation during difficult periods

Perhaps most importantly for small business owners, a growth mindset helps you manage the inherent stress and uncertainty of entrepreneurship. When you view challenges as opportunities to develop rather than threats to your identity, you’re better equipped to handle the emotional roller coaster that comes with building a business.

Self-Assessment: Where Do You Stand?

Most people aren’t purely fixed mindset or purely growth mindset—we tend to have a mix, often varying by situation or domain. The key is becoming aware of your default patterns, especially in business contexts.

Consider your honest reactions to these scenarios:

When a major client cancels a contract unexpectedly:

• Fixed mindset response: “This always happens to me. I’m just not good at maintaining relationships.”
• Growth mindset response: “This is disappointing, but what can I learn from this? How can I better understand and serve client needs going forward?”

When you struggle to understand new technology your business needs:

• Fixed mindset response: “I’m not a tech person. I’ll just have to hire someone else to handle this.”
• Growth mindset response: “This is challenging for me right now, but I can learn enough to make informed decisions and communicate effectively with tech partners.”

When a competitor launches a feature you wish you’d thought of:

• Fixed mindset response: “They’re just more innovative than we are. We can’t compete with that.”
• Growth mindset response: “That’s a clever solution. What does this tell us about market needs? How can we innovate in our own unique way?”

When an employee suggests a significant change to your processes:

• Fixed mindset response: “They don’t understand how we’ve always done things. This is my business.”
• Growth mindset response: “I’m curious about their perspective. What are they seeing that I might be missing?”

If you found yourself identifying more with the fixed mindset responses, don’t worry: awareness is the first step toward change. The very fact that you’re reading this article suggests you’re already moving in a growth direction.

Common Fixed Mindset Triggers for Entrepreneurs

Certain situations tend to activate fixed mindset thinking in even the most growth-oriented business owners:

Financial pressure: When cash is tight, it’s natural to feel like your capabilities are under attack rather than seeing it as a problem-solving opportunity.

Public failure: When mistakes happen in front of customers, employees, or peers, the shame can trigger fixed mindset defensiveness.

Comparison with other businesses: Social media and industry publications can make it easy to fall into the comparison trap, especially when others seem to be succeeding effortlessly.

Rapid growth phases: Ironically, success can trigger fixed mindset thinking if you start believing your current abilities are fixed at their current level.

Recognizing these triggers is crucial because it allows you to pause and consciously choose a growth mindset response instead of reacting from a fixed mindset place.

Your First Growth Mindset Challenge

Before our next article, try this simple awareness exercise: For the next week, pay attention to your internal dialogue when facing business challenges. Notice when you catch yourself thinking “I can’t,“ “I’m not good at,” or “That’s just not how I am.”

When you notice these fixed mindset thoughts, simply add the word “yet” to the end. “I’m not good at sales... yet.” “I can’t figure out this marketing strategy... yet.” This small linguistic shift begins rewiring your brain toward possibility rather than limitation.

The journey from fixed to growth mindset isn’t always easy, but for entrepreneurs, it’s one of the most valuable investments you can make. Your business success truly isn’t set in stone. It’s developable, learnable, and within your control to improve.

In our next article, we’ll examine the specific ways fixed mindset thinking sabotages business growth, so you can spot these patterns before they derail your progress.

This is article 1 of 6 in our Growth Mindset for Entrepreneurs series. Next up: The hidden costs of the fixed mindset