Startup Success: How Founder Personalities Shape Venture Outcomes

“… predict … personality traits of … startup founders from their Tweets.”

While they have an interesting method, I think limiting to Tweets is, well, limiting. Folks filter before Tweeting, or they have marketing people write a Tweet (unless you’re DJT, obviously) and is not likely to lead to any useful insights.

  startup success across stages of a venture’s development - from initial fundraising to exit.

In the post-SV era, I hope we all take the time to consider what other stages of “success” there might be for software entrepreneurs other than raising money from rich gamblers. Like, say, product market fit, profitability, or user satisfaction. Hell, maybe even “did I make the world a better place?”

Tech is changing, but we lucky few in the puzzle-solver class still have an unusually high degree of access to power and autonomy, for now at least; I encourage us to use that to dream a little bigger. If you asked Paul Graham what he’s most proud of, I doubt he’d say “making millions of dollars”, anyway!

It's interesting to see that extraversion actually seems to hurt founders

Let's see. I am on startup 5. The other 4 went bankrupt.

Common denominator: founder hubris and founder's syndrome.

Dealing with it currently. It's painful to watch people who think they know everything run a company into the ground, decimating investor money.

A friend recommended this podcast series to help us get some perspective on our own business. It's been like business therapy.

https://www.founderspodcast.com/

> Founders who score high on openness and agreeableness are more likely to raise funding, emotionally resilient founders fare better across all venture stages, and highly conscientious founders fare better in the earliest stages such as amount raised during initial fundraising, but are less likely to achieve high-growth exits such as acquisition or IPO.

I'm skeptical of any research that's done with the presumption that people have measurable character traits broken down into neat categories like 'openness' and 'agreeableness'. These factors are obviously true as anyone who has worked with enough people surely met someone who is disagreeable.

But whenever I take one of these tests that's supposed to measure this, it strikes me as so stupid. The questions are like "at a party, are you the center of attention, or quietly observing others?" How do you answer that? Depends on the party, the people in the party, my mood, my age, a million other things. Not to mention my mood when taking the test. I guess some people are at the extreme and are almost always the life of the party or wallflowers, but overwhelming amount of people are somewhere in the middle.

This study is even worse as it analyzes users Tweets to determine personality, which is laughable.

I think for founders you need to have some arrogance and disagreeableness to think that you can do something better than others and ignore the odds. And agreeableness is useful when dealing with almost all social situations, so it makes sense that it helps when convincing people to give you money. But the rest of it sounds like BS to me

Do any tech people here with strong neuroticism have experience or techniques for overcoming it? It feels ingrained in my personality.

Here is the actual paper. It's just 4.5 pages (excluding the Methods): https://www.pnas.org/doi/pdf/10.1073/pnas.2215829120

I figure that the inverse association between conscientiousness and exiting is the most peculiar result. The Authors state:

"However, as the startup matures and moves past the initial stages, the dynamics between founders and investors might change in several ways. First, the same ambition that led conscientious founders to strive for success via IPO or acquisition at the begin- ning of their journey, might later prevent them from selling their venture once it is successful. For example, founders scoring low on conscientiousness might be more interested in quick financial gains (thereby aligning their goals with those of investors and one interpretation of startup success promoted by management schol- ars 41–43), whereas highly conscientious entrepreneurs might pursue long-term goals that no longer equate success with selling the company as fast as possible. Specifically, the combination of ambition with the desire to retain control over the future of their business might lead conscientious founders to place greater emphasis on long-term profitability and impact. Second, while the early stages of developing a business plan and gaining investors trust may have benefitted from the meticulous and organized ten- dencies of the conscientious founder, the later stages might favor founders with the flexibility and ability to adjust to new challenges and opportunities as the startup matures [e.g., through rapid ide- ation and prototyping rather than rigorous forecasting and stra- tegic planning (10, 44)]. Finally, the advantage afforded to founders scoring lower on conscientiousness could also be driven by shifting investor and market incentives that align with the (in)famous Silicon Valley “move-fast-and-break-things” culture (45). Potential acquirers, for example, might prefer a founder who they view as disruptive and adaptive, as a means to inject their own company with innovative capabilities or culture (46)"

> Published

> April 1, 2024

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