Personality traits of founders play a crucial role in start-up success
The personality traits of start-up founders are critical to the success of their ventures.
Researchers from University of New South Wales (UNSW) Sydney, the University of Oxford, the University of Technology Sydney (UTS), and the University of Melbourne analysed over 21,000 founder profiles using a machine learning algorithm and found that successful founders possess distinct personality traits that differ from the rest of the population.
Successful founders tend to be more open to experience, conscientious, extroverted, agreeable, and less neurotic. “The higher presence of these certain personality traits in founders are related to higher chances of success,” said Dr Fabian Braesemann, the study’s co-author and Departmental Research Lecturer at Oxford Internet Institute, University of Oxford.
The study also found that diverse founding teams with specific combinations of personalities, such as an adventurous leader, an imaginative engineer, and an extroverted developer, significantly increase the odds of success.
“Organisations with three or more founders are more than twice as likely to succeed than solo-founded start-ups,” Dr Braesemann added. “Furthermore, those with diverse combinations of types of founders have eight to 10 times more chances of success than others.”
The researchers said their findings have critical applications for entrepreneurs, investors, and policymakers. By understanding the impact of founder personalities on start-up success, they can make better decisions about which start-ups to support and help fledgling organisations form foundation teams with the best chances of success.
The study also highlighted the benefits of personality benefits in teams, extending beyond start-ups to fields like construction, engineering, and filmmaking, where project-based, cross-functional teams often resemble start-up dynamics.
Paul X. McCarthy, lead author of the study and Adjunct Professor at UNSW Sydney, concluded, “There are lessons here for organisations of all kinds about the importance of having a diversity of personality types in teams, which can lead to stronger performance and impact.”