Entrepreneurs Must Avoid Falling Prey to a Commitment Trap, With Vincent deFilippo

Filed in Podcasts, Previous Episodes on November 30, 2023

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Research shows that although four out of five entrepreneurs believe they have a good — if not certain — chance of success, 74 percent of new start-up businesses fail, most often due to overconfidence and loss aversion.

Further, decision-makers tend to escalate their commitment even when knowing they’re in a failing course of action. This speaks to the inherent optimism and confidence of most entrepreneurs.

These same characteristics — overconfidence and fear of loss — also tend to foster an irrational escalation of commitment (EoC) when an entrepreneurial enterprise begins to fail.

Several theories regarding EoC behaviors offer insights into why entrepreneurs choose to escalate their efforts despite signs showing the project is failing.

Dr. Vincent deFilippo offers a detailed look at why we often get swallowed up in EOC scenarios and how we can avoid them.

Tune in to hear Dr. deFilippo’s thoughts on:

  • What inspired you to write this book?
  • Will you share with us a modern-day example of an escalation of commitment in a business context?
  • What are some of the red flags that businesses miss that lead to an escalation of commitment?
  • What is it about human nature that drives us to persist in a failing pursuit?
  • How does escalation of commitment pertain to areas of our lives outside of business?
  • What can help us improve our odds of not falling prey to an escalation of commitment?
  • Will Big Data and AI help us make better decisions regarding when to walk away from a failing project?
  • And much, much more!

 

About This Guest: ()

Dr. Vincent deFilippo, DBA, MBA, is a professor in the School of Accounting and Business at Monroe College. Prior to that he was CEO of a private equity fund in Hong Kong, raising several billion dollars in venture capital for entrepreneurs and publicly traded companies throughout the Asia Pacific Region. He is a member of the Writers Guild and holds a doctorate in Business Administration with a concentration in behavior, decision-making and leadership. Further, Dr. deFilippo has two master’s degrees along with professional certifications from Harvard, Brown, MIT, Columbia, NY Film Academy, and Hollywood Film School. His new book is Braking Point: How Escalation of Commitment Is Destroying the World (and How You Can Save Yourself), (ViennaRose Publishing, May 3, 2023). Contact Dr. deFilippo at https://viennacap.com or email him at drv@viennacap.com
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