NEW DELHI: Aspects of a start-up founder’s personality critical to the venture’s success were discerned in a new study using a machine learning algorithm. The algorithm inferred the personality profiles of more than 21,000 founders from the language and activity in their publicly available X accounts, researchers from the UK and Australia described in their study.
They then correlated the personality profiles to data from the largest directory on start-ups in the world, Crunchbase, to determine whether certain founder personalities and their combinations in cofounded teams relate to start-up success — if the company had been acquired if they acquired another company, or listed on a public stock exchange.
The researchers found that the aspects distinguishing successful entrepreneurs included “openness to adventure”, “lower levels of modesty” and “exuberance”.
While “openness to adventure” indicated a preference for variety, novelty and initiating new things, “lower levels of modesty” referred to the enjoyment derived from being the centre of attention and “exuberance” referred to high energy and activity levels.
The algorithm could distinguish successful start-up founders with 82.5 per cent accuracy, the researchers said in their study published in the journal, Scientific Reports.
Further, the researchers found that there was not just one, but six types of successful founders.
“We used machine learning and a variety of advanced statistical tests to reveal that there is not just one type of successful founder but indeed six types,” said Marian-Andrei Rizoiu, a senior lecturer leading the Behavioural Data Science lab at the University of Technology Sydney (UTS), Australia.
“Our findings clearly show there’s not one ideal ‘founder-type’ personality,” said Margaret Kern, senior author of the study from the University of Melbourne, Australia.
“Instead, the Big Five personality traits of successful start-up founders, which we can break down further across 30 dimensions, reveal six distinct types: fighters, operators, accomplishers, leaders, engineers and developers,” said Kern.
The researchers also found that diverse and specific combinations of these founder types, such as an adventurous ‘leader’, an imaginative ‘engineer’, and an extroverted ‘developer’ significantly raised the chances of the venture’s success.
“Firms with three or more founders are more than twice as likely to succeed than solo-founded start-ups,” said Fabian Stephany, co-author of the study from the University of Oxford, UK.
“Furthermore, those with diverse combinations of types of founders have eight to ten times more chance of success than single founder organisations,” said Stephany.
The researchers say that the findings having critical applications for entrepreneurs, investors, and policymakers can inform the creation of more resilient start-ups capable of more significant innovation and impact.
“We can make better decisions about which start-ups to support and help fledgling companies form foundation teams with the best chances of success,” said Paul X McCarthy, lead author of the study and adjunct professor at the University of New South Wales, Sydney, Australia.
This information about successful entrepreneurs’ personality traits can also help people decide whether becoming a founder may be a good move for them, similar to how data-derived occupation-personality maps help provide career guidance, they said.
“It’s not part of this study, but we estimate 8 per cent of people worldwide may have personality traits that could make them successful founders,” said McCarthy.
“Likely, many are not in the entrepreneurial field right now,” he added.