IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2302.07968.html
   My bibliography  Save this paper

The Science of Startups: The Impact of Founder Personalities on Company Success

Author

Listed:
  • Paul X. McCarthy
  • Xian Gong
  • Fabian Stephany
  • Fabian Braesemann
  • Marian-Andrei Rizoiu
  • Margaret L. Kern

Abstract

Startup companies solve many of today's most complex and challenging scientific, technical and social problems, such as the decarbonisation of the economy, air pollution, and the development of novel life-saving vaccines. Startups are a vital source of social, scientific and economic innovation, yet the most innovative are also the least likely to survive. The probability of success of startups has been shown to relate to several firm-level factors such as industry, location and the economy of the day. Still, attention has increasingly considered internal factors relating to the firm's founding team, including their previous experiences and failures, their centrality in a global network of other founders and investors as well as the team's size. The effects of founders' personalities on the success of new ventures are mainly unknown. Here we show that founder personality traits are a significant feature of a firm's ultimate success. We draw upon detailed data about the success of a large-scale global sample of startups. We found that the Big 5 personality traits of startup founders across 30 dimensions significantly differed from that of the population at large. Key personality facets that distinguish successful entrepreneurs include a preference for variety, novelty and starting new things (openness to adventure), like being the centre of attention (lower levels of modesty) and being exuberant (higher activity levels). However, we do not find one "Founder-type" personality; instead, six different personality types appear, with startups founded by a "Hipster, Hacker and Hustler" being twice as likely to succeed. Our results also demonstrate the benefits of larger, personality-diverse teams in startups, which has the potential to be extended through further research into other team settings within business, government and research.

Suggested Citation

  • Paul X. McCarthy & Xian Gong & Fabian Stephany & Fabian Braesemann & Marian-Andrei Rizoiu & Margaret L. Kern, 2023. "The Science of Startups: The Impact of Founder Personalities on Company Success," Papers 2302.07968, arXiv.org.
    • Handle: RePEc:arx:papers:2302.07968
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2302.07968
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anna Goldstein & Claudia Doblinger & Erin Baker & Laura Díaz Anadón, 2020. "Author Correction: Patenting and business outcomes for cleantech startups funded by the Advanced Research Projects Agency-Energy," Nature Energy, Nature, vol. 5(11), pages 937-937, November.
    2. Yian Yin & Yang Wang & James A. Evans & Dashun Wang, 2019. "Quantifying the dynamics of failure across science, startups and security," Nature, Nature, vol. 575(7781), pages 190-194, November.
    3. Magnus Henrekson & Dan Johansson, 2010. "Gazelles as job creators: a survey and interpretation of the evidence," Small Business Economics, Springer, vol. 35(2), pages 227-244, September.
    4. Alastair Lewis & Peter Edwards, 2016. "Validate personal air-pollution sensors," Nature, Nature, vol. 535(7610), pages 29-31, July.
    5. Anna Goldstein & Claudia Doblinger & Erin Baker & Laura Díaz Anadón, 2020. "Patenting and business outcomes for cleantech startups funded by the Advanced Research Projects Agency-Energy," Nature Energy, Nature, vol. 5(10), pages 803-810, October.
    6. Hyytinen, Ari & Pajarinen, Mika & Rouvinen, Petri, 2015. "Does innovativeness reduce startup survival rates?," Journal of Business Venturing, Elsevier, vol. 30(4), pages 564-581.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Popp & Francesco Vona & Myriam Grégoire-Zawilski & Giovanni Marin, 2024. "The Next Wave of Energy Innovation: Which Technologies? Which Skills?," Review of Environmental Economics and Policy, University of Chicago Press, vol. 18(1), pages 45-65.
    2. Harilal Krishna & Yash Kashyap & Dwarkeshwar Dutt & Ambuj D. Sagar & Abhishek Malhotra, 2023. "Understanding India’s low-carbon energy technology startup landscape," Nature Energy, Nature, vol. 8(1), pages 94-105, January.
    3. van den Heuvel, Matthias & Popp, David, 2023. "The role of venture capital and governments in clean energy: lessons from the first cleantech bubble," Energy Economics, Elsevier, vol. 124(C).
    4. Matthias van den Heuvel & David Popp, 2022. "The Role of Venture Capital and Governments in Clean Energy: Lessons from the First Cleantech Bubble," CESifo Working Paper Series 9684, CESifo.
    5. Aldy, Joseph E., 2022. "Learning How to Build Back Better through Clean Energy Policy Evaluation," RFF Working Paper Series 22-15, Resources for the Future.
    6. Taelim Choi & John C. Robertson & Anil Rupasingha, 2013. "High-growth firms in Georgia," FRB Atlanta Working Paper 2013-20, Federal Reserve Bank of Atlanta.
    7. Henrekson, Magnus & Johansson, Dan, 2010. "Firm Growth, Institutions and Structural Transformation," Ratio Working Papers 150, The Ratio Institute.
    8. González-Uribe, Juanita & Reyes, Santiago, 2021. "Identifying and boosting “Gazelles”: Evidence from business accelerators," Journal of Financial Economics, Elsevier, vol. 139(1), pages 260-287.
    9. Agnieszka Kuś & Dorota Grego-Planer, 2021. "A Model of Innovation Activity in Small Enterprises in the Context of Selected Financial Factors: The Example of the Renewable Energy Sector," Energies, MDPI, vol. 14(10), pages 1-17, May.
    10. Serban Mogos & Alex Davis & Rui Baptista, 2021. "High and sustainable growth: persistence, volatility, and survival of high growth firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 135-161, March.
    11. Cristina Fernández & Roberta García & Paloma Lopez-Garcia & Benedicta Marzinotto & Roberta Serafini & Juuso Vanhala & Ladislav Wintr, 2017. "Firm growth in Europe: An overview based on the COMPNET labour module," BCL working papers 107, Central Bank of Luxembourg.
    12. Marco Caliendo & Daniel Rodríguez, 2024. "Divergent thinking and post-launch entrepreneurial outcomes: non-linearities and the moderating role of experience," Small Business Economics, Springer, vol. 62(4), pages 1523-1553, April.
    13. Heiko Bergmann, 2017. "The formation of opportunity beliefs among university entrepreneurs: an empirical study of research- and non-research-driven venture ideas," The Journal of Technology Transfer, Springer, vol. 42(1), pages 116-140, February.
    14. Florian Léon, 2022. "The elusive quest for high-growth firms in Africa: when other metrics of performance say nothing," Small Business Economics, Springer, vol. 58(1), pages 225-246, January.
    15. Wennberg, Karl & Andersson, Brian S., 2019. "Editorial: Enhancing Quantitative Exploratory Entrepreneurship Research," Ratio Working Papers 322, The Ratio Institute.
    16. Mathilde Aubry & Jean Bonnet & Patricia Renou-Maissant, 2015. "Entrepreneurship and the business cycle: the “Schumpeter” effect versus the “refugee” effect—a French appraisal based on regional data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(1), pages 23-55, January.
    17. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    18. Andersson, Martin & Noseleit, Florian, 2008. "Start-Ups and Employment Growth - Evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation 155, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    19. Andrew Burke & Serhiy Lyalkov & Ana Millán & José María Millán & André Stel, 2021. "How do country R&D change the allocation of self-employment across different types?," Small Business Economics, Springer, vol. 56(2), pages 695-721, February.
    20. Cefis, Elena & Leoncini, Riccardo & Marengo, Luigi, 2024. "Is innovation failure just a dead end?," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 481-493.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2302.07968. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.