As I researched a business book on successful entrepreneurs and the business models of the companies they led for a client, I looked at the personalities of leaders of six hugely successful companies. These are Airbnb (Chesky and Gebbia), Walmart (Sam Walton), Alibaba (Jack Ma), Apple (Steve Jobs), and Tesla (Elon Musk). Based on this research, I have noted that all these founders had some common personality characteristics, which are:
- Focused
- Undeterred by failure
- Passionate
- Supremely confident
Biographies of these individuals focus on their quirky behavior. For instance, Jobs is portrayed as a foul-mouthed, erratic personality who makes life miserable for people. Elon Musk is portrayed as an individual subject to massive mood swings. But the laser focus of these individuals struck me as probably one of the major causes for the success of their companies.
Starting a company is a risky business. Most startups commence with great enthusiasm but end in despair and disillusionment. Successful entrepreneurs do not give up easily. They keep trying and innovating. These are tenacious people, and in this chapter, we will look at the role of the personality in achieving sustained business growth.
Both external and internal environments influence entrepreneur motivation. Entrepreneurs are driven by personal satisfaction in work, ego, or status. (Mukherjee, 2016). Successful entrepreneurs tend to be self-confident and highly passionate about their ideas. Many may assume that these entrepreneurs are risk-takers, but facts and management studies do not support this perception. Indeed, entrepreneurs are fully aware of the risks. Once they are convinced that their idea is worth trying, they put their heart and soul into making it successful.
Entrepreneurs like Chesky from Airbnb, Sam Walton of Walmart, and others studied were motivated to solve a problem. They wanted to serve a need felt by the communities in which they lived and operated. It was not money or the acquisition of wealth that motivated them.
Their need for achievement drove entrepreneurs like Elon Musk and Steve Jobs. They believed in their capabilities and were willing to work tirelessly towards the goals they had set for themselves. They were great at managing risk and were neither gamblers nor massive risk-takers. Indeed, they were prudent and passionate people. They were people who bet on their capabilities.
Entrepreneurs often find it difficult to appreciate why others in their organization are not equally driven and passionate. It often leads to the perception that entrepreneurs are over-demanding, excessive, and intolerant. These entrepreneurs succeed by building a team of individuals who share their values, vision, passion, and business objectives.
Successful entrepreneurs do not believe that luck and fate determine success or lead to failure. They focus on themselves, their capabilities, and their hard work. Successful entrepreneurs appear to think differently than other persons in several respects. They are less likely to engage in counterfactual thinking. They are also more likely to show overconfidence in their judgments. Further, successful entrepreneurs have a greater ability to interact effectively with others (Baron, R.A. (2000)
A significant correlation is seen between entrepreneurial behavior like business creation, business success, and entrepreneurship. The need for achievement and generalized self-efficacy drives entrepreneurs. They are innovative, stress-tolerant, need autonomy, and are proactive personalities. (Rauch, A et al., 2007)
A study investigated entrepreneurial personality traits, background, and networking activities on venture growth among 168 Chinese entrepreneurs in small and medium-sized businesses in Singapore. The personality traits measured in this study included the need for achievement, internal locus of control, self-reliance and extroversion, education and experience, networking activities, and frequency of communication networks.
The results showed that experience, networking activities, number of partners, internal locus of control, and need for achievement positively impact venture growth. Two other personality traits, self-reliance and extroversion, negatively impact the number of partners and positively impact networking activities. The findings indicate that an entrepreneur’s industrial and managerial experience is the dominating factor affecting venture growth. (Lee, D.Y. et al., 2001).
Risk propensity supports the business foundation but not necessarily business success. Achievement motivation is favorable both for business foundation and business success. (Brandstatter, H (2011)
In summary, there are five personality traits associated with successful entrepreneurs. These are:
- Need for achievement.
- Hard-working
- Self-confidence
- Education and experience
- Networking and communication capabilities