You know a topic is important when several international studies have focused on it. ‘Founder psychology’ is one such area, and from Oxford to Princeton, researchers have surveyed thousands of startups and their founders to try to understand the impact of the latter’s psychological profile on their businesses’ chances of success.
What doesn’t seem to be up for debate is whether the psych profile plays a role. One 2023 study in the science journal Nature looked at over 20,000 startups and found that ‘founder personality traits are a significant feature of a firm’s ultimate success.’ The question, then, becomes what type of personality is likely to see the best outcome?
So, this article examines the role psychological profile plays in startup culture, detailing the most important traits and assessing whether they are innate or can be learned. But before that, let’s dispel a popular myth about the types of people who become startup CEOs.
Do sociopaths really make the best CEOs?
According to popular theory, sociopaths’ typical lack of empathy – along with their laser focus and tolerance of risk – gives them that all-important edge in business. But this just doesn’t hold up when you look below the surface. In fact, the opposite might be true. The great startup founders are not marked by cold detachment but by high emotional intelligence.
So, what exactly does that successful startup CEO profile look like, and how can you work towards that yourself?
The key traits of a great startup founder
Before we get into the exact traits, the first question to ask is whether startup founders – the successful ones – are different from the rest of us. The study we mentioned earlier found that the answer was yes, noting that CEOs’ scores for the big five personality traits (openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism) ‘differ noticeably from the rest of the population.’
The study noted that there was no single ‘founder type’ personality. Rather, key facets include a preference for variety and starting new things, an openness to adventure, enjoying being the centre of attention, and having higher activity levels.
Another study, focusing on over 10,000 tech startups published in PNAS in 2023, linked founder personality with specific moments in a company’s journey. For example, they found that openness and agreeableness were linked positively to the chances of raising an initial round of funding, but these traits were ‘unrelated to all subsequent conditional outcomes’. In other words, they were good for one part of the startup journey but meaningless to others.
Meanwhile, the study found that conscientiousness was positively related to early-stage investment but negatively related to exit, conditional on funding. Finally, neuroticism was negatively related to all outcomes.
So, let’s now break down some of these key traits:
- Resilience: The life of a startup can be volatile. Markets shift, funding comes and goes, co-founders leave, and some of those early iterations of products don’t work as you hoped.This is where resilience plays a huge role, because founders who have mental toughness can more easily navigate the moments of uncertainty without losing momentum. Instead, they view it as feedback and an opportunity to learn and grow. For those who want to embody this trait, consider working with a coach, build a strong support system around you, look at new ways of processing your daily challenges.
- Self-awareness: The best founders are self-aware to the point that they can honestly assess their performance and, importantly, surround themselves with people who fill the gaps in their skill set. So self-awareness means you are unafraid to ask for help and listen to feedback. If you feel you don’t have this quality, try to get into the habit of regular self-reflection – that might include doing personality tests as well as actively seeking out team feedback.
- Empathy: In contrast to the sociopathic stereotype, great startup founders are often deeply empathetic. They understand what motivates others and know how to build strong cultures that retain talent, something particularly vital in competitive environments like the UAE and GCC. Emotional intelligence is essential for building diverse teams and inclusive workplaces. Good retention starts with your active listening skills, making time for one-to-ones, as well as keeping up to date on the latest developments in leadership and motivation. Cultural sensitivity training can also be incredibly helpful, especially when operating in the GCC’s international business ecosystem.
- Curiosity: Startups exist to solve problems. Founders who are curious about the world often outperform those who are locked into a single idea or worldview. The more successful founders are the ones who ask better questions and are not afraid to change direction when they discover new insights. Someone who wants to boost this aspect of their personality treats learning as a lifelong habit and makes time to learn every day.
- Grit: Grit is often defined as a mixture of passion and persistence. Early on, if you have some success, it’s exciting. Then there is the long slog of those middle years, where founders either deal with the challenges they face or struggle to keep going. The key trait here is the need for endurance. The best way to test your potential for this kind of challenge, and whether you have real grit, is by asking yourself why you are building this startup in the first place and what is really driving you. Having this on paper will help guide you when you feel you’re going off course in the months that follow.
Can you become the perfect psych fit?
Are we saying that these traits can only be one thing or the other? No – clearly, for some people they are innate, but for others they need to be developed. Some individuals may have a natural leaning towards certain qualities, but nearly all the required attributes can be nurtured over time. We need to move away from thinking of the perfect founder profile as a kind of checklist and see it instead as a personal development roadmap. It’s something that you work at.
Gaining the personality of the successful founder
The ideal startup founder isn’t the sociopath of myth. In fact, they may just be the opposite – emotionally intelligent, curious, self-aware, and mentally tough. They build cultures that endure, and they try to listen more than they talk. There will always be headline-grabbing stories about egomaniac founders and their successes – to be clear, they do exist – but this isn’t the norm.
The GCC region is emerging as one of the world’s most promising places for innovation and entrepreneurship. Talent and investors are looking to this part of the world more and more. So the demand for psychologically-fit founders will only grow, and while the bar is high, it’s possible for those who put in the effort, and have a willingness to learn, to become great founders and leaders.
