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This story originally appeared on Under30CEO.com
A groundbreaking study published in Nature, Scientific Reports suggests that the key to a startup’s success may be rooted in founders and founder personalities. Researchers from the University of New South Wales, Oxford University, and two other Australian universities delved into the data of over 21,000 startup founders to pinpoint the personality traits that contribute the most to a successful venture.
The Impact of Founder Personalities on Startup Success
Their discoveries revealed that not only do specific personality traits predict success, but the blend of personalities within a founding team can also play a vital role. In particular, the study found that founders who possess a mix of grit, curiosity, conscientiousness, and high emotional intelligence were more likely to propel their startups towards success. Furthermore, assembling a balanced team of diverse personality types can create a synergistic effect, enhancing creativity, resilience, and decision-making capabilities, ultimately contributing to the startup’s overall success.
Identifying the Six Primary Founder Personalies: The FOALED Framework
The research pointed to six primary founder types that are better predictors of success than other factors like industry or founder’s age. These six types are Fighters, Operators, Accomplishers, Leaders, Engineers, and Developers, collectively known as “FOALED.” Lead author and University of New South Wales adjunct professor Paul McCarthy said, “Personality traits don’t simply account for startups’ success—they are critical to elevating the chances of success.” Each type brings unique qualities to a startup, complementing other founder types and contributing to the team’s dynamism. Understanding the strengths and weaknesses of these types can aid startup teams in harnessing their combined skills to increase success rates within their industries.
Using Machine Learning to Analyze Twitter Activity and Predict Success
By employing a machine-learning algorithm to evaluate the Twitter posts of founders, the researchers were able to predict successful founders with an impressive 82.5% accuracy. They assessed startups’ success based on fundraising, mergers, acquisitions, and IPOs data sourced from Crunchbase’s directory. Additionally, the algorithm considered various factors such as the language utilized, tweet frequency, and user engagement. This method not only illuminates the potential success of founders, but also underscores the sway of social media behavior on startup results.
Traits Exhibited by Successful Founders and Their Benefits
Successful founders tended to display traits such as seeking variety and novelty, being open to adventure, possessing less modesty, and having high energy levels. Companies with higher concentrations of these traits were found to have better odds of achieving success. Furthermore, these entrepreneurial characteristics nurtured innovative and adaptable work environments, ultimately driving growth and attracting valuable talent. This research underscores the significance of founders’ personality traits in determining a company’s overall performance and longevity.
Diverse Founder Combinations and Increased Chances of Success
Significantly, the study demonstrated that it is not necessary for all of these traits to be present within a single founder. Startups that boasted diverse combinations of founder types had an 8- to 10-times higher likelihood of success compared to companies led by a single founder. This finding accentuates the importance of bringing together a team of individuals with complementary skills and attributes rather than relying on one person to lead the startup to success. Furthermore, startups with a diverse mix of founders were better equipped to navigate challenges, adapt to changing market conditions, and foster innovation.
Related: The 6 People Every Startup Needs
The Ensemble Theory of Success: Emphasizing Diverse Founding Teams
The discoveries from this study led to the development of the Ensemble Theory of Success, which reinforces the idea that a varied founding team often boosts a startup’s overall success. The Ensemble Theory of Success highlights the importance of diverse skill sets, backgrounds, and perspectives in fueling innovation and addressing complex challenges. Consequently, startups that embrace this theory by assembling a well-rounded and complementary team are more likely to adapt, grow, and thrive in the fast-paced and ever-changing business landscape that characterizes today’s world.