Running a startup can often seem an impossible task, but a new study finds in addition to factors such as economy, industry and location, the personality of founders can significantly impact chances for success.
The impact of founder personalities on startup success study – which was authored by researchers from the University of Melbourne, University of Technology Sydney, University of Oxford and the Oxford Internet Institute – examined language and activity data from social media platform X to infer the “personality traits” of founders across more than 21,000 companies.
These personality traits were correlated to data from Crunchbase, the world’s largest directory on startups, to determine whether particular combinations of personality traits correspond to the success of early-stage business ventures – with success defined as whether a company has been acquired, listed on a public stock exchange or acquired another company.
Using the widely accepted “Big Five” personality model – which gauges conscientiousness, extraversion, agreeableness, emotional stability and openness to experience – the study not only revealed personality is pivotal to success, but also found the personality traits of successful founders differ significantly from the population at large.
“We find that personality traits don’t simply matter for startups – they are critical to elevating the chances of success,” said Paul X McCarthy, lead author of the study and adjunct professor at The University of New South Wales.
The personality facets distinguishing successful entrepreneurs include a preference for variety, novelty and starting new things (described as openness to adventure), being exuberant (described as higher activity levels), and a fondness for being the centre of attention, which the study bluntly describes as having “lower levels of modesty”.
The study posits a greater presence of these and other personality traits is linked to higher chances of success – with founder personality twice as predictive of success than a startup’s age, and five times that of its industry.
“We can see how this plays out in many notable examples,” McCarthy says.
“The adventurousness and openness to experience of Melanie Perkins, the assertiveness and confidence of Steve Jobs, the exuberance and energy of Richard Branson, the calm under pressure Jeff Bezos, the discipline and focus of Mark Zuckerberg, and the trustworthiness of Larry Page and Sergey Brin underpin their company’s success.”
What type of founder are you?
Ultimately, the study did not conclude a singular, ideal “founder-type”, but revealed six different personality types commonly identified among successful founders: fighters, operators, accomplishers, leaders, engineers and developers.
Prominent personality facets include spontaneity and toughness (the “fighter” type), assertiveness and calmness (the “leader” type) and imagination and intellect (the “engineer” type).
Speaking to Information Age, Susie Jones, CEO and co-founder of Australian supply chain assurance and small business cyber risk startup, Cynch Security, explained how her personality plays into her career as a founder.
“For me, my focus is always on the people at the heart of a problem, and that serves me well in many ways,” said Jones, whose confident, outgoing and accommodating approach fits the “accomplisher” category.
“It helps me to quickly understand what someone I’ve just met needs or wants to get out of the conversation… to identify the words they’re not saying as well as to understand the underlying meaning of the words they do say.
“This helps me with sales, management, marketing and many other aspects of our startup.”
The study also found firms with three or more founders are more than twice as likely to succeed than solo-founded startups, and those with diverse combinations of founder personality types have significantly higher odds of success – for example, pairing adventurous ‘leaders’ with conscientious ‘accomplishers’ and extroverted ‘developers’.
When describing her co-founder Adam Selwood, Jones mirrored findings that differing personality types can be complimentary and help cover more ground.
“Adam and I have very different personalities,” said Jones.
“I am always pushing to grow and move ahead, to progress and help more businesses.
“Adam is driven to always be better and produce better results for our customers.
“Sometimes he needs me to slow down so he can succeed with improving our products, sometimes I need him to speed up so we can reach the next milestone sooner,” she said.
McCarthy further estimates 8 per cent of people worldwide may have personality traits which “could make them successful founders”, but many are likely not in the entrepreneurial field.
“Identifying these misfits and people in roles unsuited to their personalities will be the focus of some of our follow-up studies,” said McCarthy.