The personality traits of entrepreneurs

What does the research say about entrepreneurs and personality?

Decades of studies asked whether founders are a different kind of person, and most used their own favourite variables: risk-taking, need for achievement, locus of control, tolerance of ambiguity. The findings would not stack up against each other. The useful step was recoding those older variables into the five broad dimensions personality research had settled on, a taxonomy that emerged from lexical work rather than from one study and survived repeated attempts to replace it (Goldberg, 1993).

Once that was done, a meta-analysis found entrepreneurs and managers differing on four of the five dimensions (Zhao & Seibert, 2006).

• Higher Conscientiousness. Entrepreneurs scored above managers on the dimension covering planning, persistence and achievement striving.
• Higher Openness to Experience. They also scored above managers on curiosity, imagination and willingness to try an unfamiliar approach.
• Lower Neuroticism. They reported less of the worry and emotional reactivity that Neuroticism measures, which is the same as scoring higher on Emotional Stability.
• Lower Agreeableness. This is the finding most easily misread, and the next-but-one section is about how to read it.
• No difference on Extraversion. The trait most people assume separates founders from everyone else did not distinguish the two groups at all.
• Each individual difference was small. The full set of traits together related moderately to entrepreneurial status, R = .37.

Who were entrepreneurs compared with?

Managers, not the general population. That comparison group is the most important thing to hold on to, and the detail most articles on this topic leave out.

Managers are not a random slice of humanity. They work in organisations, have usually been promoted at least once, and are selected for the traits that predict doing well at work. Comparing founders with that group is a demanding test: it asks what is distinctive about entrepreneurs relative to other ambitious, employed, capable people, which is a more interesting question than how they compare with everybody.

It also means the results cannot be flipped into statements about the population. Nothing here says entrepreneurs are more conscientious than the average person. The outcome measured was entrepreneurial status, meaning who was running their own venture rather than working for someone else, not firm performance or survival (Zhao & Seibert, 2006).

How big are the differences?

Small, one dimension at a time. The table gives the direction the meta-analysis found and the size it reported.

Two things follow. The distributions overlap enormously: draw a founder and a manager at random and the founder will often be the less conscientious of the pair. And the combination does better than any single trait, since the full set of personality variables related moderately to entrepreneurial status at R = .37. Considerable heterogeneity showed up across studies for every variable except Agreeableness, which the authors read as a sign that moderators remain unidentified. The pattern depends on something the studies were not measuring, perhaps industry, country, era or how entrepreneur was defined.

Why should the lower Agreeableness finding be read carefully?

Because the word carries more moral weight in ordinary use than it does on a questionnaire. Big Five Agreeableness is scored from items about trust, cooperation, deference and tender-mindedness. A lower score describes someone readier to disagree, negotiate hard and press a point a more accommodating person would let go. For work that involves refusing a bad deal and telling an investor something unwelcome, that is a job requirement rather than a flaw.

It is also not a finding about honesty. Honesty-Humility is a distinguishable factor covering sincerity, fairness, greed avoidance and modesty, and Five-Factor Model instruments capture only part of its variance (Ashton et al., 2014). Whatever the Agreeableness item pool was measuring in these studies, it was not that.

One technical detail cuts the other way and deserves stating. Agreeableness was the one variable without considerable heterogeneity across studies, so although the difference is small, it was the most consistent of the four (Zhao & Seibert, 2006).

What do personality traits predict at work generally?

Broader findings give the entrepreneurship results a sense of scale, since founders are also people doing work.

• Conscientiousness predicts job performance across occupations. The meta-analysis that established this pooled validity studies across five occupational groups and found Conscientiousness related to performance in all of them, in supervisor ratings, training results and personnel records alike (Barrick & Mount, 1991).
• Extraversion predicts performance more narrowly, mainly in managerial and sales roles rather than in occupations generally, and Openness and Extraversion both predicted training proficiency (Barrick & Mount, 1991). A founder does a great deal of selling, so the narrow finding often applies.
• Traits predict occupational attainment about as well as socioeconomic background or measured ability does, across prospective longitudinal studies (Roberts et al., 2007).

Together these say that the traits helping someone build a company are mostly the traits that help anyone do a demanding job well. The Big Five and your career covers that ground in detail.

Is there an entrepreneurial personality?

Not in the sense the phrase implies. There is a mild statistical tilt, and there are at least three reasons not to treat it as a filter.

• The effects are small and the distributions overlap. A small mean difference between two large groups tells you very little about any individual in either.
• The samples are of people who already got there. Studies recruit entrepreneurs, meaning people who started something and were still identifiable as founders when researchers came looking. Those who considered it and did not start, or started and stopped, are much harder to sample. That is ordinary survivorship, and it makes any trait common among survivors look like a requirement.
• Status is not success. The outcome was being an entrepreneur rather than a manager, so nothing here speaks to whose venture lasted or grew (Zhao & Seibert, 2006).

What the evidence supports is narrower and more useful. Certain tendencies make parts of founding cheaper: persistence makes the long unrewarded middle easier, openness makes changing direction less painful, emotional stability makes a bad month less costly, and a lower need to be agreed with makes hard conversations survivable. Each can also be arranged for rather than possessed, through a co-founder, an adviser or a habit.

How does Wellington measure this?

Wellington is a science-based personality assessment from Therabot Labs LLC. It measures personality as continuous traits, built on the Big Five and HEXACO models, and writes the results back as a personal report rather than a type.

The free Snapshot is 60 questions and about 7 minutes. It scores 6 dimensions, Extraversion, Agreeableness, Conscientiousness, Emotional Stability, Openness to Experience, Honesty-Humility, and returns a percentile and a written page for each, which covers all five of the dimensions in the table above plus Honesty-Humility. The first ten questions are answered before anything is asked of you; after question ten you sign in with an email so answers are saved and results can be shown. There is no card.

The Wellington Membership, $4.99 a month, adds the Portrait, 336 questions in 4 chapters, to reach 90 traits: every facet beneath the six dimensions and all 24 VIA character strengths. The facets are the more useful level here, because a domain score cannot tell you which part of it is doing the work. Achievement striving under Conscientiousness, adventurousness under Openness and self-efficacy are scored separately, and they can point in different directions in the same person. It then continues toward all 255 traits across eight domains.

Each trait is the average of several statements on a five-point accuracy scale, reported as a percentile against the reference sample, in one of three bands: Quiet below the 30th, Balanced to the 70th, High above. The bands and the Portrait names exist to make the result easier to talk about; the percentile is the measurement, and it is always shown alongside. Norms are provisional until the norming sample is complete, and the methodology shows how the writing works. Wellington is a wellness tool for reflection, not a medical or psychological diagnosis, and it does not replace care from a qualified professional. It is not built for hiring, selection or investment decisions, and no score in it says whether to start a company.

Questions people ask

Is there an entrepreneurial personality type?

No. Entrepreneurs differ from managers on four of the five dimensions, and every difference is small, with large overlap between the groups (Zhao & Seibert, 2006). The five together relate moderately to entrepreneurial status at R = .37, which is a tilt rather than a profile. Plenty of founders sit on the unexpected side of each trait.

Do entrepreneurs need to be extraverted?

The evidence says no. Extraversion was the one dimension on which entrepreneurs and managers did not differ (Zhao & Seibert, 2006). Selling and recruiting do demand visible social effort, and Extraversion predicts performance in sales and managerial roles (Barrick & Mount, 1991), but the trait did not separate founders from other ambitious professionals.

Are entrepreneurs less agreeable than other people?

They scored lower than managers on Agreeableness, by a small margin (Zhao & Seibert, 2006). Read that as measured: the items cover trust, cooperation and deference, so a lower score describes a readiness to disagree and negotiate hard. It is not a measure of honesty, which sits largely on the separate Honesty-Humility factor (Ashton et al., 2014).

Can a personality test tell me whether to start a business?

No, and it should not be used that way. The findings compare groups that already exist, the samples contain people who started and stayed identifiable as founders, and the outcome studied was entrepreneurial status rather than whether a venture succeeded (Zhao & Seibert, 2006). A trait profile can tell you which parts of the work will cost you more effort, which is a preparation question.