How Your Emotions Influence Opportunity Evaluation

Ideas are not opportunities.

We often have great ideas, but for us to determine whether an idea represents a genuine opportunity for us, we must assess several internal and external factors.

Does this idea relate to my interest or vision? Does it suit my knowledge, skills, and experience? Do I have the resources to support its development? Does this idea have the potential to generate revenue, or to produce some other desired benefit? Are there any major personal, financial, market, legal, or regulatory obstacles that would prevent me from implementing this idea?

And sometimes we will evaluate an idea and see its opportunity, only to ultimately decide that it might be a great opportunity for someone, but that it isn’t suitable for us. At least not at the time.

Many people – most notably entrepreneurs – may be quite adept at the sum and substance feasibility analysis of opportunity evaluation. But they may entirely overlook the impact that their own emotions can have on this evaluative process.


We can distinguish emotion from temperament or mood.

  • Emotion means the specific feelings that are stimulated by our immediate circumstances, our environment, or the people around us. Emotion is a short-term, reactive state of mind.
  • Temperament reflects our inherent state of mind, our long-term disposition that is associated with our general personality or character.
  • Moods are temporary general states of mind, typically lasting hours or days. They are not as intense as emotions.

Emotion, mood, and temperament are all states of feeling, distinguished primarily by duration and intensity. They can also affect each other. If you are a generally grumpy person, you may be more prone to morose moods. If you wake up in a great mood on any given day, you are probably less likely to be angered by trivial inconveniences.

Similarly, psychologists often distinguish between “state” and “trait” emotions.

  • State emotions are experienced in the moment. Usually a change in emotion caused by external events.
  • Trait emotions reflect relatively stable tendencies to experience an emotion across many types of situations.

For example, someone may exhibit hostility in an isolated situation where they are aggressively and deliberately provoked by someone else. But we probably wouldn’t consider them a “hostile person” unless they frequently have angry reactions, even in situations where anger seems to be an inappropriate response.

Psychologists also consider emotions to reflect positive or negative valence.

  • Positive emotions are subjectively “good,” and typically include feelings like hope, joy, excitement, curiosity, and gratitude.
  • Negative emotions are subjectively “bad,” and typically include feelings like fear, anger, rejection, loneliness, and jealousy.

Emotion and cognition

There is an extensive amount of research demonstrating the strong influence that emotion can have on cognition. The effect of emotion on cognition is continuous, pervasive, and reciprocal (feelings shape thought and thought shapes feelings).[1]

Opportunity evaluation can involve a variety of cognitive abilities that are impacted by emotion, including decision making, judgment, creativity, and problem solving.

Here are some specific ways in which emotion influences cognition:[2]

  • Perceptions of the outside world. Positive emotions cause us to perceive people, things, and ideas more favorably. Positive emotions also enhance our environmental alertness, so that we are sensitive to a broader range of external stimuli.
  • Creativity. Positive emotions have been shown to enhance creativity.
  • Heuristic processing. Positive emotions can make us more likely to apply heuristics (mental shortcuts that we acquired through experience) to current problems and decisions.
  • Interpretations of other people’s motives. Positive emotions make us more likely to attribute positive motives to other people.

It’s important to note, though, that neither positive nor negative emotions are uniformly beneficial or detrimental.[3]

For example, negative emotions have also been shown to enhance creativity. And we don’t necessarily want to rely on heuristics when facing novel circumstances, so positive emotions could interfere with analytical thinking in these situations.

Positive emotions can also increase our susceptibility to certain cognitive biases.

Here are some of the cognitive biases that positive emotions may leave us vulnerable to, or that may lower our perception of risk:[4, 5]

  • Belief in the law of small numbers is the belief that small samples accurately represent the much larger populations from which they are drawn. Failures aren’t as well-publicized as successes, so unrealistically positive sample data can cause us to overoptimistically lower our perception of risk.
  • Illusion of control is our tendency to think that we have more control or influence over things than we actually do. This can cause us to underestimate risk, because we may think that our skill has a major impact when chance may actually be the deciding factor.
  • Optimism bias is the tendency to overestimate the probability of a favorable outcome, or to underestimate the probability of an undesirable outcome. Positive emotions cause us to be more optimistic, and negative emotions cause us to more pessimistic.
  • Overconfidence bias occurs when we overestimate our own judgment, knowledge, or skill. When we overestimate our abilities we likewise overestimate our chance of success, and this can lower our perception of risk.
  • Planning fallacy occurs when we greatly underestimate the time and resources that will be required to complete a task or achieve a goal. It is often a result of optimism bias. If we underestimate our needs, we will likely underestimate the associated risk as well.

Remember, too, that our decision-making environment can affect how much our emotions influence our cognition.

Entrepreneurs in particular – but all of us to some extent – frequently must evaluate opportunity under conditions of uncertainty, unpredictability, and complexity.[6] These conditions can make it tough for us to make sound judgments involving perceived risk, and our emotions – positive and negative – can significantly impact our perception of risk.

How to balance emotion and cognition

Now that we know a little bit about how and why our emotions influence opportunity evaluation, we can consider some strategies we can use to balance our feelings and our thoughts.

Since neither positive nor negative emotions lead necessarily to associated “good” or “bad” outcomes, we aren’t concerned so much with the nature of our feelings. Rather, we are more concerned about how we can be aware of them and mediate their impact on our judgment and decision making.

We don’t want to suppress our emotions. We want to acknowledge them, assess their impact, and adapt our thinking as we see fit.

According to NFL commissioner Roger Goodell, “You have to manage yourself. And make sure you do it in the right way, so you are not making decisions in crisis.”

Sometimes our feelings will be favorably congruent with our thinking, and we can just ride that emotional wave. Often, though, we will need to apply some self-regulatory techniques to keep our emotions from hijacking our thoughts.


Self-distancing refers to our capacity to go beyond our egocentric viewpoint and consider our emotions and experiences from the perspective of another.

Research supports the idea that using self-distancing techniques to understand our emotions and behavior facilitates adaptive self-reflection and coping.[7]

Here are three simple self-distancing techniques:

  • Internal illeism. Use non-first-person pronouns while engaged in introspective self-talk. Engaging in non-first-person internal dialog allows us to see ourselves more like we typically see others, which helps create the psychological distance we need for adaptive self-reflection.
  • Candid camera. Imagine your emotions and behaviors are being captured by a hidden camera. Then imagine a trusted friend or a person you greatly admire can view the situation. What would they think about how you responded? How might they have handled things?
  • Time travel. Imagine traveling into the future – maybe a month, maybe 10 or 15 years – and asking yourself how you feel about this situation then. This temporal distancing tends to heighten our awareness that negative events and feelings tend to be temporary, and this impermanence focus can lower our emotional reactivity to current real-world stressors.[8]

Cognitive reappraisal is the attempt to reinterpret a situation in a way that changes its meaning and emotional impact.

The technique has been shown to increase positive emotions, decrease negative emotions, and improve emotional well-being and interpersonal functioning.[9]

Usually, cognitive reappraisal involves recognizing when we are letting negative emotions influence our perception of a situation, then positively reframing our initial thoughts.

If you feel negative emotions clouding your judgment, you can start by asking yourself the following questions:

  • What is causing my negative feelings about this? Don’t ruminate. Try to expose the root cause of your negative emotions. It’s possible that the negativity stems from an irrational fear or a painful past experience.
  • What is my level of control? In every situation you have either complete control, no control, or some control. Understanding your level of control can help you stop worrying about things you can’t control, and allows you to focus on the things you can.
  • What can I change? If you do have some control, determine specifically what you can control, and ask yourself how you can affect change.
  • What can I learn? There may be opportunities to acquire new knowledge, skills, and abilities that are secondary to the primary opportunity being evaluated.
  • What are the potential benefits? Look for the hidden payoffs. Maybe the obvious projected benefit isn’t all there is here.

Answering these questions will expose some positives. You should be able to rethink problems, obstacles, or failures and reframe setbacks as opportunities to face new challenges, to learn, to test new approaches, or to be more creative or innovative.

Reappraisal isn’t intended to make you see opportunity where there is none. It’s just one way of making sure that you don’t let your reactive emotions shut down your evaluation before you’ve thought it through.

Metacognition and mindfulness

Metacognition – thinking about our own thinking – allows us to extract ourselves from our current decision-making context and engage in reflective self-assessment of our thought process.

Mindfulness – a core serendipity strategy – means to actively and non-judgmentally focus our attention on the experience of the present moment.

Metacognitive knowledge and strategy are important for opportunity evaluation. Metacognitive knowledge represents our understanding of ourselves and others, tasks, and strategies. Metacognitive strategy is the cognitive framework we formulate when evaluating different available responses to a given task process.[10]

Mindfulness is an effective emotional self-regulation strategy on its own, but it also enhances metacognition. This mindful metacognition helps us evaluate opportunity in a way that corrects for biases and emotional reactions.[11]

Mindfulness techniques such as meditation, focused breathing, and yoga are so beneficial that 35 percent of U.S. employers provide some type of mindfulness training to their employees.

Becoming more mindful will in turn improve our ability to use metacognitive strategies to help mediate the impact of our emotions on our decision-making and judgment.

When in doubt, stall

We gain a lot of value when we improve our understanding of our own emotions, and of how those emotions affect our decisions. Ultimately, our best strategy is to just delay decisions if we are experiencing strong emotions.[12]

“Most decisions are not binary,” said billionaire executive Jamie Dimon. “There are usually better answers waiting to be found if you do the analysis and involve the right people.”

By understanding our emotions and how are emotions influence our thinking, we can apply some strategies to help balance our thoughts and feelings. This should keep us in check when we risk making a hasty evaluation of an opportunity due to an initially positive or negative emotional reaction that may be unwarranted.

These approaches can help us mitigate the impact of our emotions on our judgment, so that we make a better evaluation. Or, they may simply heighten our awareness of the situation enough that we prudently delay our decision.


1. Robert A. Baron, “The Role of Affect in the Entrepreneurial Process,” Academy of Management Review 33, no. 2 (April 2008): 328.

2. Ibid, 329-331.

3. Ibid, 337.

4. Ibid, 336.

5. Hean Tat Keh, Maw-Der Foo, and Boon Chong Lim, “Opportunity Evaluation under Risky Conditions: The Cognitive Processes of Entrepreneurs,” Entrepreneurship Theory and Practice 27, no. 2 (2002): 128-131.

6. Ibid, 126.

7. Ozlem Ayduk and Ethan Kross, “From a Distance: Implications of Spontaneous Self-Distancing for Adaptive Self-Reflection,” Journal of Personality and Social Psychology 98, no. 5 (2010): 827.

8. Emma Bruehlman-Senecal and Ozlem Ayduk, “This Too Shall Pass: Temporal Distance and the Regulation of Emotional Distress,” Journal of Personality and Social Psychology 108, no. 2 (2015): 372-374.

9. Robert Brockman et al., “Emotion Regulation Strategies in Daily Life: Mindfulness, Cognitive Reappraisal and Emotion Suppression,” Cognitive Behaviour Therapy 46, no.2 (March 2017): 2.

10. Young Sik Cho and Joo Y. Jung, “The Relationship between Metacognition, Entrepreneurial Orientation, and Firm Performance: An Empirical Investigation,” Academy of Entrepreneurship Journal 20, no. 2 (2014): 74.

11. Louise Kelly and Marina Dorian, “Doing Well and Good: An Exploration of the Role of Mindfulness in the Entrepreneurial Opportunity Recognition and Evaluation Process,” New England Journal of Entrepreneurship 20, no. 2 (2017): 27.

12. Maw-Der Foo, “Emotions and Entrepreneurial Opportunity Evaluation,” Entrepreneurship Theory and Practice 35, no. 2 (2010): 388.

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