Starting a business? Learn how to develop a growth mindset if you want to see it thrive.

We can’t emphasise the importance of a growth mindset in business enough! So how do you know if you have a growth mindset? Here’s some examples from our very own business to help you get your head around it.

In the startup world, you’ll see a lot of people talking about having a “startup mindset”. This is all about thinking lean, which allows you to get your idea to market as efficiently as possible. But when we talk to startups that are on track to achieve great things, there’s one thing that we always notice: the people behind them have a growth mindset (as well as a great idea).

This article is a bit different from the topics we normally cover, but no startup story is truly complete unless it includes the grit and resilience involved in persisting through challenges, which all comes down to mindset. Before we dive deeper into how to develop a growth mindset (spoiler: it’s all about resilience and valuing effort), let’s get definitions out of the way:

What is a growth mindset?

Carol Dweck, the researcher behind growth mindsets versus fixed mindsets, describes  growth mindset like this: “In a growth mindset, people believe that their most basic abilities can be developed through dedication and hard work—brains and talent are just the starting point. This view creates a love of learning and a resilience that is essential for great accomplishment.” (Dweck, 2015)

Key takeaway: Having a growth mindset means viewing ability (and success) as something that can be developed through effort

What’s the opposite of a growth mindset?

Good question. It’s easier to understand a growth mindset when you understand what it is not.

Dweck explains a fixed mindset like this: “In a fixed mindset, people believe their basic qualities, like their intelligence or talent, are simply fixed traits. They spend their time documenting their intelligence or talent instead of developing them. They also believe that talent alone creates success—without effort.” (Dweck, 2015)”

Key takeaway: Having a fixed mindset means viewing abilities as fixed and believing that success comes from talent, not effort

How do you know if you have a growth mindset?

You might need to think back to past challenges and see how you feel about them on reflection, or consider how you acted at the time. However, people all operate in both fixed and growth mindsets, which means learning how to develop a growth mindset (or a stronger one) in relation to your business is possible, even if your gut feeling is that you mainly operate in a fixed mindset.

Keep reading for examples of how we’ve developed our growth mindsets and what we’ve noticed in other startup owners to hopefully give your own mindset makeover a kickstart.

Trait #1: Embracing challenge vs avoiding challenge

What’s your most common reaction when faced with a challenge at work?

When we started Project Alfred, it meant leaving stable jobs. We knew we’d be taking a pay cut and there was of course a risk that things could go wrong.

But we had a long-term vision in mind, and we embraced the challenge of building something from scratch. We know that if we put in the effort and make sure all the small things consistently get done that they’d build to a bigger thing. It would have been easy on paper to avoid this challenge and stay in our jobs (but remain unhappy), but we’ve ultimately found happiness (and better mental health) from embracing the challenge of running our own accounting firm.

It’s super interesting to think about what sort of challenges you embrace, and which ones you avoid. Remember, people operate in both realms all the time. Embracing the challenge of developing a growth mindset is, in fact, a good way to start learning how to adopt a growth mindset in relation to your business 💪

Trait #2: Persisting in the face of setbacks vs giving up easily

How big does a setback need to be before you throw in the towel?

Something that’s pretty common in the tech world is the founders starting off with one idea and a vision for operating in a particular market, then getting feedback that their idea doesn’t resonate with their intended audience. Rather than giving up, resilient founders often pivot and adapt their idea, business model, or audience for a better market fit, trusting that with continued effort, they can still derive success from their idea (and the work they’ve put in already). Or, they might get knocked back by the first round of investors they pitch to. People with a fixed mindset may give up at this point; people with a growth mindset will take a deep breath, channel their grit and go back to their pitch deck or their prototype and then try again.

We work in business services, which is inherently a process of pitches, which also inherently means getting knocked back from time to time on our initial proposal. Sometimes a lead might say they don’t want to proceed based on price, but we don’t view that as a reason to lower our prices. Instead, we spend more time finding those who see the value we offer (or, sometimes, if we think we’re the best accountants for their business, we’ll follow up to explain the value to the lead in an effort to change their perspective).

It’s rare that growing a business is a truly linear process and understanding (and appreciating) that is a big part of learning how to adopt a growth mindset.

Trait #3: Seeing effort as a path to mastery vs seeing effort as fruitless or worse

It can be pretty hard to flip your mindset when you don’t have anything tangible to show for your efforts over a prolonged period. However, if you’re able to see the effort you’re expending as something that’s a necessary part of your startup or business journey, and something that’s helping you hone your skill set, you’ll be operating within a growth mindset (even when it’s a grind).

On the flip side, if you see all the effort that you’re going to as a waste of time when things don’t work out, or if you’re not even willing to put in the effort to learn something new, you’re operating in a fixed mindset, and that’s going to seriously hamper your business’ growth.

In our first year of business, we’ve spent a pretty considerable chunk of time making small process improvements across our operations. Real talk: We can say with confidence that these efforts do not always feel fun in the moment. They’re time consuming. They can be stressful. But we know that when we have better processes in place, it means more efficiency gains for us and our clients.

Trait #4: Learning from criticism vs ignoring useful negative feedback

Because we spend a lot of time trying new innovations from the fintech world, we have the privilege of seeing how different startups respond to feedback and criticism. Here’s what we’ve learned: the startups that grow and scale the most effectively are the ones that learn from criticism, and truly welcome feedback from users.

Luckily, this is the case with many of the startups we’ve worked with, but you’ll often see a pattern that emerges when startups fail to get traction, where the user provides critical feedback and the creators immediately assume that the user is doing something wrong, when it’s usually the product not providing the best user experience, or there’s something lacking in terms of user education.

If our prospective clients ever come back with questions on proposals, rather than get frustrated, we use that as an opportunity to build more information and better communicate our value into future proposals. At the end of the day, we’re grateful for the feedback because it means next time, we can try to reduce the amount of client questions by providing the best experience.

Trait #5: Finding lessons and inspiration in the success of others vs feel threatened by the success of others

If another business operating in the same space as you is successful, do you view this as a threat to your own success, or as a good sign that you too could be successful? If you’re trying to learn how to develop a growth mindset, this is a really good mindset muscle to try and flex. It’s rewarding, and it’s also a much more enjoyable zone to sit in.

We’ve seen clients that have been able to leverage their openness with direct and indirect competitors as a way to learn, and sometimes even come up with joint projects that they can both benefit from, rather than being secretive about their ideas or insights.

This applies to professional services too. In the accounting world, there is ALWAYS room for more than one accounting firm to be successful, so we don’t see other accountants as threats, and we’re all about collaboration over competition. Through the Early Adopters Hub we’ve had the pleasure of meeting lots of great, forward-thinking accountants that value technology as much as us, and we all benefit from sharing best practice ideas to help everyone and grow together, rather than compete with each other. It’s a much less stressful way to run a business, too.

We hope you’ve enjoyed this deep dive into how to develop a growth mindset. If you’re interested in more startup and business tips like this, sign up to our monthly newsletter for tech hacks, things that should be on your radar, and other content we’ve found useful or helpful that we think you’ll like too.