Just about a month ago, I ran at an assessment of a study conducted by Oxford Internet Institute, University of Oxford, University of Technology Sydney, and the University of Melbourne, and since then, I’ve been fixated on how to practically apply the findings so that founders might start with a far greater likelihood of success.
“There are valuable lessons here about the importance of fostering a variety of personality types within teams. We estimate that around 8% of people worldwide may possess personality traits conducive to being successful founders.” — Paul X. McCarthy, one of the published researchers in Science Daily
That discovery of 8% hit me like a ton of bricks because a frequently cited conventional wisdom about startups seems to correlate too closely to be mere coincidence: “90% of startups fail.”
Which is to say, only 10% of startups succeed.
Over the decades, there have been many assessments of the personality traits of entrepreneurs, from various Myers-Briggs characterizations to some intriguing correlations that Cynthia Harrington, CFA shared with me through the Five Factors (take that assessment and message me; we can compare you to me), and well beyond the research, ask anyone who has worked with startups for more than a few years and you’ll find that we just know that there are traits in people that result in startup success. In this most recent case, researchers examined data from over 21,000 startup founders and identified key personality traits associated with success.
A desire for variety and novelty, an openness to adventure, reduced modesty, and heightened energy levels
Not the characteristics you’re likely used to seeing, are they? Where is grit, fluid intelligence, or hustle? What of the skills arguably required as an engineer, product manager, or being capable of sales?
I hope you’re as intrigued as I am because countless books, podcasts, and articles, claim qualities that seem to correlate with the work of a founder and yet here it’s found that with more than 80% accuracy that if you have a sense of adventure, for one, you’re going to succeed.
And that’s when it dawns on me that in the very same vein that we teach founders in our programs that they need to focus on the problem, not the solution, we can’t merely look at what correlates with success and deem is so when we’ve also well studied and know what causes startups to fail.
How Startups Fail
Some years ago, I aggregated a half dozen or so studies of WHY startups fail to instead of asking why they fail, tease out how they fail. Why they fail is interesting but how they fail is a cautionary tale because you (one would hope) would prioritize and do everything necessary to avoid the known causes of failure. Right?
Right?? Here are the top three causes:
- No Market and Ignoring Customers — Paul Graham refers to it as Obstinacy; the market should be telling you want to do, not your blind certainty.
- Wrong Team — What’s on your team?
- Bad Location / Wrong Platform — Developers will note that this is a decision of Node vs. Ruby and to an extent, it is. It’s also whether or not you should be based in Austin or Chicago, part of that Incubator, on iOS or Android, promoting on Facebook or Snapchat…
Marketing. NOT Advertising and Promotion. Marketing.
They don’t understand or aren’t prioritizing what Marketing actually is and should be doing: studying the market, competition, opportunities and threats, costs, trends, potential partners and investors, and not just customers but also users, stakeholders, and evangelists.
If you need to be managed, you’re an employee, not a founder, and if you want to merely offer advice or opinions, you’re an advisor, at best. The primary job of everyone on an early team is to get it done so what needs to be on your team are the people that CLOSE, CODE, and CREATE.
When struggling with the wrong platform, poor location, discord in the team, or market that isn’t ready for you, what avoids failure is that you don’t quit.
If you are deficient in marketing, execution, or commitment as a team, you will fail; we know this, because you must prioritize overcoming the leading causes of failure: the market, the team, and the wrong decisions.
Obviously, the three words I’ve emboldened there don’t line up with those top three causes of failure so why have I used them instead of just saying — no market, wrong team, and bad location? Because within a team, what conventional wisdom repeats time and again is that the job to be done in a startup is getting it done: not strategizing, not meeting, not debating or discussing, not putting together more material nor documentation, but doing the work — with a reduced sense of modesty, an openness to adventure, and energy beyond that which most have, just get it done. Execution.
Time and again I have worked with or advised would-be founders who need permission, protection, direction, agreement, or discussion, and those founders do far worse than fail — they cause a culture and team that then has to carry the extra weight of that individual.
And what we can surmise from the series of books and articles about grit, fluid intelligence, fortitude, and passion, is that founders must be committed to the mission, vision, and problem they seek to solve.
There is a reason startup teams are so often compared to married couples and why cities and startup development organizations have events such as “cofounder dating” to help entrepreneurs network; what we can draw from the research citing A desire for variety and novelty, an openness to adventure, reduced modesty, and heightened energy levels, is that there are shared values in successful teams, values not unlike that which we find in lasting personal relationships capable of working through good times and bad. Commitment.
Plot Your Team on a 2x2 Matrix Founded in Research
Our X Axis — The degree to which you and your team comprise the characteristics that correlate with success: A desire for variety and novelty, an openness to adventure, reduced modesty, and heightened energy levels.
Our Y Axis — Your proficiency in marketing, execution, and commitment, such that your core competencies are found in ensuring these qualities above all else.
As you lack that sense of novelty, plot yourself left. If you’re humble enough to appreciate that you might be wrong, plot yourself further right. When you don’t have a clue how to study a market, you’re lower on the chart and when you are getting done what needs to get done, rather than talking about it or hesitant to start, plot yourself higher.
Find where you and your team fit on this chart and wherein you are deficient, prioritize your attention on finding the advisor, co-founder, or incubator or startup studio, that moves you up and to the right quadrant.
Startup Success Found Within the Right Team.
Before I let you go, we’d be remiss if we didn’t take into account one more consideration well substantiated as contributing to founder success: experience, which is technically, usually studied and reported given its correlation with age. Like it or not, the average age of a successful startup founder is about 44 years old; developed skills, industry knowledge, and a network within a sector, certainly enable the founder with to excel beyond the founder without.
With that in mind, we can add a diagonal line to our matrix which moves yourself up and to the right, or lower in the left, depending on the experience you have with what you’re doing.
Indeed, experience can overcome deficiencies, but I only want you to shift where you plot yourself after you first plot yourself; because while experience can overcome deficiencies, experience alone can’t result in your success in a sector of the economy prone to failure despite what you know.