Talking About Failure: Why It Is So Hard in Germany

Why does hardly anyone in Germany talk about business failure?

Whoever has had to give up a company in Germany rarely talks about it. At events, owners talk about growth, new customers, and successful projects. The firm that had to close ten years ago, the large order that almost ruined the business, or a partner's insolvency are passed over in silence. The silence is so widespread that it hardly stands out.

Failure here means that a company or an important venture does not reach its goal and has to be given up, for example through closure, sale below value, or insolvency. The guiding question of this essay is: Why is it so hard to talk about business failure in Germany, and how should owners deal with it?

To answer it, I first look at what figures say about the fear of failure in Germany. Then I explain the concept of stigma and what research shows about its consequences. At the end I weigh two answers that are both popular and explain why I consider a third one right.

What figures say about the fear of failure

The Global Entrepreneurship Monitor, or GEM, is an international survey that has measured entrepreneurial activity in many countries for more than two decades. It produces a country report for Germany. In the 2024/2025 report, almost 49 percent of respondents said they were afraid of failing with a new business. At the same time, the entrepreneurship rate reached a record: 9.8 percent of the population had been involved in starting a business in the preceding three and a half years.

The figure alone does not prove that the fear is particularly large in Germany. In other countries, too, a large share of the population names this concern. But it shows how widespread it is: roughly every second person sees possible failure as a cause for worry. One cultural clue is Hofstede's dimension of uncertainty avoidance, meaning how uncomfortable people feel with ambiguity. Germany scores 65 on a scale of roughly 0 to 100, higher than the Netherlands, lower than France or Japan. How these scores play out in sales is described in cultural differences in sales.

A medium score on uncertainty avoidance does not explain why failure is met with silence. But it fits a culture that values planning, diligence, and reliability. Whoever fails in such a culture has not only lost a venture but seemingly violated an expectation. Whether cultural imprinting or other reasons weigh more heavily cannot be derived from these figures.

The thinking model: stigma according to Goffman

In 1963 the sociologist Erving Goffman described stigma as a trait that devalues a person in the eyes of others. Simmons, Wiklund, and Levie (2014) apply the concept to failed entrepreneurs and emphasize that stigma works on two levels. At the level of society, groups form a collective judgment about what a particular trait means. At the level of the person, those affected adopt this judgment into their own image of themselves.

It is precisely this second level that explains the silence. Whoever has failed stays silent not only because others might condemn them. They stay silent because they share the judgment themselves. The failure is experienced not as an event but as a statement about their own person.

An everyday analogy: whoever fails a driving test usually talks about it only after passing on the second attempt. Failing has then become an anecdote. As long as the second attempt is still pending, it is a stigma. It is similar with entrepreneurs, except that the second attempt often never comes.

The stigma of failure works most strongly not in the minds of others but in the mind of the one who failed.

What research shows about the consequences of stigma

Simmons, Wiklund, and Levie (2014) examined how stigma influences the further careers of failed entrepreneurs. They used GEM data from 23 countries and combined it with European Union survey data on negative attitudes toward failed entrepreneurs and with World Bank data on how strongly countries require business exits to be disclosed. Their finding: in countries with the strongest stigma and the strictest disclosure rules, entrepreneurs were less likely to start again after a failed business.

But the study also shows a second side. For some of those affected, stigma acted as a spur: they started again precisely to assert themselves against the judgment, often with particularly novel ventures. A follow-up study of 8,171 entrepreneurs from 35 countries who had experienced failure also found differences between men and women in the decision to restart, which varied in size with the stigma and fear of failure in the respective country (Simmons et al. 2019).

How failure changes the person was studied by Hossain and Valliere (2024) among 423 entrepreneurs in North America. Failure weakened the belief in being able to master entrepreneurial tasks. Passion for the cause and resilience offset this effect, in part even more than that. The study is a one-time survey and cannot establish causes.

In Germany a legal change adds to this. For insolvency proceedings filed since October 1, 2020, a discharge of residual debt is generally possible after three instead of six years. This also applies to entrepreneurs. The legislature has thus shortened the economic consequences of failure. The social consequences cannot be shortened by law.

Two answers: concealing or celebrating

There are two widespread answers to stigma. The first is concealment. It has good reasons on its side. In a country that values reliability, an openly told failure can unsettle customers, banks, and suppliers. Creditors who lost money in an insolvency rightly find a cheerful story about it disrespectful. Silence thus protects not only one's own image but also the feelings of others.

The second answer is celebration. It comes from the startup scene and has produced formulas such as "fail fast": fail quickly, learn quickly, carry on. Events at which founders talk about their defeats are meant to break the stigma. The intention is good. But a new study from Amsterdam shows a downside (Herzog et al. 2026). Actors in the entrepreneurial ecosystem there cultivated talk of failing fast to secure their legitimacy but in practice followed their own interests. This created conditions under which failing ventures were prolonged rather than ended in time.

Both answers share the same flaw: they treat every failure the same way. Concealment treats every failure as a stigma, celebration every failure as a learning experience. Neither distinguishes why a venture failed.

The third answer: distinguish instead of judging

I consider a third answer to be the right one. It consists of distinguishing the causes of failure and judging each on its own terms. Negligence is not intent, and bad luck is neither. Whoever makes this distinction can talk openly about failure without trivializing it.

For the middle group, mistakes, openness is most valuable and rarest. Whoever tells how they underestimated liquidity during growth warns others of a common pattern. The article why young companies fail shows how often such patterns occur in the first years. Whoever names them helps others avoid them.

In your own business, the distinction begins long before any insolvency. A lost order, a failed rollout, a wrong hire: here, too, the way it is handled determines whether the team learns from it. How a debrief without blame works is described in learning from bad decisions. Why repeated mistakes rarely lie with individuals is shown in mistakes as a process signal.

What owners can do themselves

No single owner can change a culture. But everyone can show in their own environment what a sober way of dealing with failure looks like. Four steps are suitable for this.

• Start in the business: tell your team about one of your own bad decisions, with its cause and lesson. An owner who leads the way makes it easier for others to report mistakes early.
• Name the causes: classify a failure of your own honestly: bad luck, mistake, or both? Whoever sees only bad luck learns nothing. Whoever sees only their own mistakes loses courage.
• Show consideration for those harmed: if others lost money through the failure, their loss belongs in the story. How to deliver bad news openly is described in delivering bad news.
• Allow yourself to stop in time: for large ventures, decide in advance how you will recognize that you should stop. An orderly withdrawal is not a failure but a decision.

Whoever wants to strengthen the resilience of the business after a setback will find a three-phase check in business resilience. It helps to see your own vulnerability before it leads to failure.

Conclusion: why is talking about failure so hard?

The question was
it is so hard to talk about business failure in Germany and how owners should deal with it. The answer to the first part lies in stigma, which works on two levels. Society judges failure as a stigma, and those affected adopt this judgment. A culture that values planning and reliability makes this adoption easier. Almost one in two people cite the fear of failure, and in countries with strong stigma, those who failed are less likely to start again.

The answer to the second part is neither concealing nor celebrating. Both treat every failure the same way. It is more sober and more helpful to distinguish between bad luck, mistakes, and misconduct and to judge each kind appropriately. Openness is most valuable where it is hardest: with one's own mistakes.

A country learns from the failure of its entrepreneurs only as much as they are willing to tell about it.