The 4 personality traits of successful entrepreneurs

Drake Baer
Reporter, Business Insider
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The Steve Jobses of the world have something in common.

In fact, according to organizational psychology research, they share at least four personality traits:

They’re generalists rather than specialists.

2013 Swiss-German study found that while employees are specialists, entrepreneurs are generalists. 

Founders have a diverse set of skills — after all, they have to manage the many tendrils of a business. Plus, they tend to have a diverse network of relationships, one that they can call on when launching companies.

“It is the jacks-of-all-trades across a whole portfolio of individual resources and not the masters-of-one who are likely to become entrepreneurs,” write authors Uschi Backes-Gellner and Petra Moog. “The mere social butterflies or the mere computer nerds are not likely to become entrepreneurs because they are both too imbalanced and thereby less likely to be successful as entrepreneurs.”

Stanford University economist Edward P. Lazear first proposed the “jack of all trades” theory. He found that Stanford MBAs who took a broader range of classes and had held a wider range of jobs were more likely to start their own thing. A follow-up German study replicated those results.

They’re outrageously self-confident. 

A third of American small businesses collapse within their first five years. Two-thirds fail within 10.

According to Nobel Prize-winning psychologist Daniel Kahneman, it takes a special breed to take on that kind of risk.

“A lot of progress in the world is driven by the delusional optimism of some people,” he told Inc. “The people who open small businesses don’t think, ‘I’m facing these odds, but I’ll take them anyway.’ They think their business will certainly succeed.”

The data backs this up: In a 1988 Purdue University study, 33% of 3,000 entrepreneurs thought that they’re businesses had a 100% chance of success. A 1997 University of Houston study found that entrepreneurs are biased to think they can prevent anything bad from happening to their businesses. A 2013 study from Erasmus University Rotterdam found that entrepreneurs think they will live longer than everybody else.

Sometimes, that confidence lapses into narcissism.

They’re disagreeable. 

In his book “David and Goliath,” Malcolm Gladwell argues that innovative people are disagreeable: They don’t really care what other people think of them.

He argues:

Innovators need to be disagreeable … They are people willing to take social risks — to do things that others might disapprove of.

That is not easy. Society frowns on disagreeableness. As human beings we are hardwired to seek the approval of those around us. Yet a radical and transformative thought goes nowhere without the willingness to challenge convention.

He provides compelling examples: Steve Jobs didn’t sweat stealing the graphic user interface from Xerox PARC, and IKEA founder Ingvar Kamprad gladly outsourced from Sweden to Poland while the countries were hostile to one another.

It’s redeemed in the research. A University of Illinois-University of Pennsylvania study found that disagreeable people are better at declining requests on their time, giving them better control of calendars.

They’re conscientious.

In a 2003 study led by Pennsylvania College of Technology management professor Mark Ciavarella, researchers asked 111 people that had started their own businesses between 1972 and 1995 to take personality tests. The researchers were looking for any founders’ personality traits that correlated with companies making it past the “adolescent” stage, or over eight years.

The only “significant predictor” was conscientiousness, or the propensity to plan, organize, and take care of responsibilities.

“The results suggest that an entrepreneur needs to evolve into a manager to shepherd a new venture to long-term survival,” Ciavarella and his colleagues write.

But conscientiousness isn’t just good for founders: The trait is linked with earning more, feeling more satisfied with your job, and living longer.

This article is published in collaboration with Business Insider. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Drake Baer reports on strategy, leadership, and organizational psychology at Business Insider. 

Image: A businessman walks through the Tokyo International Forum. REUTERS/Thomas Peter.

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