Success as a Startup Founder? Need for variety and novelty, reduced modesty, an openness to adventure, and heightened energy levels
A recent study conducted by researchers from the Oxford Internet Institute, University of Oxford, University of Technology Sydney (UTS) and the University of Melbourne examined data from over 21,000 startup founders, formally identifying six key startup founder personality types associated with success.
Notably, the research indicates that the collective personalities of a startup’s entire founding team significantly influence the venture’s outcome.
Now, arguably, we know this. Most of the articles citing the causes of failure lie in the team (poor execution, lack of focus, misaligned expectations, different work ethic, or inconsistent values) but society seems to continue to argue incessantly about whether or not we can teach people to be entrepreneurs, even failing to agree on what it means to be an entrepreneur. We have books written about Grit, Tenacity, Purpose, Passion, and Mission, and yet many (most?) founders seem fixated on owning their own business, making money, or developing their solution; fixations that have little to do with what it actually takes to be successful as a founder.
Has this research uncovered clarity that we might use to help founders understand if they have a shot? Might we more clearly distinguish and agree on what it means to be “entrepreneurial”? Can this insight help founders find co-founders and develop a team of people that complements not just their skills and experience but also their personality traits – making success much more likely?
“There are valuable lessons here about the importance of fostering a variety of personality types within teams.” Paul X. McCarthy, one of the published researchers, clarified in Science Daily, “We estimate that around 8% of people worldwide may possess personality traits conducive to being successful founders, and many of them might not be engaged in entrepreneurial pursuits at present.”
Interesting isn’t that? 10% of startups succeed… entrepreneurial people are considered quite rare in fact… and around 8% (coincidence?) of people worldwide possess the personality traits they’ve identified that correlate with success.
When “experts” (yes, I mean to put that in quotes as I find the term is subjective) ponder the attributes that contribute to the success of startup founders, a plethora of opinions and metrics emerge. Some propose three specific personality traits and four distinct founder types, while others favor the Big Five traits or even suggest a list of six, seven, or as many as 16 diverse personality profiles. I, frankly, hold some credence in Myers-Briggs and my ENTJ association; and yet, I’m constantly in discussions with those who think Myers-Briggs is bunk.
Published in the journal Nature Scientific Reports, the recent study asserts that successful founders exhibit personality traits that deviate from the norm in the broader population (very consistent with how I distinguish “entrepreneur” from business owner or even founder – rare, unusual people who deviate from the norm). Six specific personality types they’ve collectively summarized as “FOALED” (Fighters, Operators, Accomplishers, Leaders, Engineers, and Developers), demonstrate a stronger predictive power for success compared to other conventional factors commonly assessed by the business world. For instance, their personality-based metric is purportedly five times more predictive of success than industry affiliation and twice as predictive as the founder’s age (referring to the fact that there is a much higher correlation between age and success with a startup than most might hope; simply, be 44 years old).
Lead author and adjunct professor at the University of New South Wales, Paul X. McCarthy, emphasized the significance of personality traits in the success of startups.
In their study, the researchers and authors reported that their algorithm accurately distinguished successful founders with an 82.5% accuracy rate. They gathered data from Crunchbase to evaluate the success of startups, considering factors such as mergers, fundraising, acquisitions, and IPOs, drawing data assessing personalities from behaviors on social media.
These traits include a desire for variety and novelty, an openness to adventure, reduced modesty, and heightened energy levels. The paper concludes that the more a startup team exhibits these traits, the greater the likelihood of success.
Now, let me clarify something they also made clear. They didn’t say that the founder(s) must have these attributes but rather that their research finds that the founding team is much more likely of success if they do, meaning that if that isn’t you, find someone who is, “Firms with three or more founders are more than twice as likely to succeed than solo-founded start-ups,” added Oxford researcher, Fabian Stephany.
“Let’s “assume” that their research is even half correct – those are still high numbers worth consideration.” Wade Allen, who specializes in transforming businesses through talent, “Can start-ups think deeper about how they start and how they grow?”
the Ensemble Theory of Success
Startups that encompass a diverse mix of founder types have a significantly higher probability of success (and I found that notable because of the already recognized value of gender/race/age diversity in teams), with 8 to 10 times greater odds compared to companies led by a single founder. Diversity ABSOLUTELY matters; and with an 8-10x greater chance of success, one could argue that diversity of personality is critical. This observation led the researchers to introduce a concept they’ve termed the “Ensemble Theory of Success.” This theory aligns with other commonly embraced notions in the startup community, such as the Three Hs (“hipster, hacker, hustler”), initially coined by AKQA’s chief creative officer, Rei Inamoto, in 2012. According to these concepts, a successful startup typically consists of a founder who embodies a trendy persona, another who excels in programming, and a third who possesses unwavering dedication to hard work – as I once explored it, The Butcher, The Baker, and the Candlestick Maker.
The point in what I, at least, consider conclusive finding is not that you must have these traits to find success as a founder but that indeed, we can determine if your startup is very likely to fail if your core team lacks among them a desire for variety and novelty, an openness to adventure, reduced modesty, and heightened energy levels.
What this guides for would-be, early-stage founders, is that priority one is not likely talking to customers, studying the market, nor building that MVP, but rather ensuring you find the Fighters, Operators, Accomplishers, Leaders, Engineers, and Developers who do.
The post Success as a Startup Founder? Need for variety and novelty, reduced modesty, an openness to adventure, and heightened energy levels appeared first on Startup Economist.
Related posts:
Nice post: I recently wrote about another study that found that one of the most significant predictors of startup survival is founders' personalities.
It showed that a bigger, more diverse team increases the odds of actually surviving and thriving. It’s not just about having one visionary leader but mixing personalities that bring new ideas, different sources of energy, and just enough friendly debate to push everyone forward.