AbstractSetbacks are an integral part of a scientific career, yet little is known about their long-term effects. Here we examine junior scientists applying for National Institutes of Health R01 grants. By focusing on proposals fell just below and just above the funding threshold, we compare near-miss with narrow-win applicants, and find that an early-career setback has powerful, opposing effects. On the one hand, it significantly increases attrition, predicting more than a 10% chance of disappearing permanently from the NIH system. Yet, despite an early setback, individuals with near misses systematically outperform those with narrow wins in the longer run. Moreover, this performance advantage seems to go beyond a screening mechanism, suggesting early-career setback appears to cause a performance improvement among those who persevere. Overall, these findings are consistent with the concept that “what doesn’t kill me makes me stronger,” which may have broad implications for identifying, training and nurturing junior scientists.