The English line comes from an 1848 bilingual collection of Napoleon's aphorisms, compiled by A. G. de Liancourt and edited by J. A. Manning, which gives sources for only a few sayings (none for this one). The French printed opposite reads “Qui craint de perdre la gloire, est sûr de la perdre” (“he who fears to lose glory is sure to lose it”), so the English is a loose rendering. Its point: fear of losing makes losing more likely.
What it means
Going into a contest already afraid of losing is half-way to losing it. Fear makes you hesitant and easy to beat, so the defeat you dread becomes more likely.
Where it comes from
The earliest source we found is Political Aphorisms, Moral and Philosophical Thoughts of the Emperor Napoleon (London: T. C. Newby, 1848), with French and English on facing pages. Its title page says the sayings were collected from more than 80 original works, and it gives sources for a few sayings in footnotes, but none for this one. On page 146 the English reads “He who fears being conquered is certain of defeat.” Manning's shorter edition, The Aphorisms of Napoleon (London: Ackermann, 1852), repeats it as no. 109.
The French facing it in both books is different: “Qui craint de perdre la gloire, est sûr de la perdre” — “He who fears to lose glory is sure to lose it.” The English is a free rendering rather than a translation, and the popular “sure of defeat” is a later smoothing of Manning's “certain of defeat”. We could not trace either version to a letter, speech or text by Napoleon himself, so it remains attributed.