There Is No Such Thing as an “Entrepreneur Personality”
Still, personality plays a significant role in startup success
For decades, researchers and business people have tried to identify a single representative personality profile of an entrepreneur. Those efforts have fallen flat. Why?
Well, imagine if there was a personality profile that defined “the entrepreneur.” All the infamous entrepreneurs we know — Bezos, Gates, Jobs, Musk, Zuckerberg — would be alike. And that couldn’t be further from reality.
“[Entrepreneurship] is not a personality trait; in thirty years I have seen people of the most diverse personalities and temperaments perform well in entrepreneurial challenges.” — Peter Drucker
Don’t dismiss personality just yet, though.
Personality is highly related to entrepreneurial success. But startups need people with diverse personalities to be successful because entrepreneurship encompasses a wide range of activities. Here is what we know from over 100 years of scientific study on personality and performance:
Personality predicts performance
The relationship between a person’s personality traits and how they perform is indisputable. By definition, personality traits are deeply ingrained, psychological attributes (cognitive, behavioral, and motivational) that cause behavior. To bring this concept to life, take a moment to think about how you behave day-to-day. You will likely realize that there are clear patterns and tendencies in your actions.
For me, on almost any given day I will think about the future, set goals, panic about the climate crisis, look forward to alone time, seek activities that require deep thinking (e.g., learning, writing, planning), and inevitably, get (overly) frustrated by someone’s lack of motivation or incompetence. These behaviors can be explained by some of my dominant traits: achievement-striving, future-orientation, introversion, neuroticism, and need for cognition.
Put simply, entrepreneurs make decisions and choose to act in ways they believe will help their business succeed, and those behaviors are, in part, a direct outcome of their personality.
“In the end, there can be no great companies without great leaders. This has always been true and always will be.” — Edwin Locke
Personality traits are neither “good” nor “bad”
People often place misguided value on some personality traits over others for entrepreneurship. If you google “entrepreneurship” and “personality,” you will find numerous articles that list traits entrepreneurs “must-have” to be successful. That’s a fallacy. Personality traits can be beneficial and harmful to performance.
Optimism, for example, is a common personality trait that gets listed. While optimism is undoubtedly important for entrepreneurship (and research confirms this), it can also be damaging. Scientific studies demonstrate that optimism is negatively linked to startup performance. People high on optimism may overestimate the likelihood of success, for instance.
But if personality traits can be both beneficial and harmful, how do we know which traits are critical for entrepreneurship performance?
The key is to understand the task
The value of a personality trait is task-dependent. That means, some personality traits “fit” certain tasks better than other traits. A personality trait fits a task when the behaviors it causes are those that are needed to complete a task.
For example, entrepreneurs often have to pitch to investors and convince them their business is a sound investment. One personality trait that fits this task is high self-efficacy. People who are high on self-efficacy have strong beliefs in their general competence to complete tasks presented to them. Self-efficacy is critical for pitching because the entrepreneur needs to convince investors that they are capable of building the company, and people high on self-efficacy naturally believe in their capabilities. Low self-efficacy, on the other hand, is a poor fit because investors are unlikely to invest in a company if an entrepreneur does not firmly believe in their own capability to turn their vision into a reality.
Does that mean someone who is low on self-efficacy won’t pitch successfully? No. However, they will have to exert more effort (than those high on self-efficacy) and will likely find pitching a more difficult and potentially unenjoyable task.
Takeaways
If you want to be an entrepreneur, you don’t need to have a certain type of personality. However, it is important to understand how well your personality fits with the various tasks of entrepreneurship so you can do what you do best. When you understand yourself and the tasks, you can explain to your team where you are most likely to contribute added value.
So what are the tasks and responsibilities of entrepreneurship?
I’ll answer that in my next blog post.
In the meantime, if you would like to learn more about the science behind startups follow Blackhawke Behavior Science on Twitter or the Medium publication, From I-O to IPO where my colleagues and I write about the intersection between industrial-organizational (I-O) psychology and entrepreneurship.
