From the outside, entrepreneurs may seem like a diverse group: from the triumphant nerd whose love of code makes him a billionaire to the gruff guy from the wrong side of town who rises to command a vast empire. But my two decades of research on the entrepreneurial personality suggest that those drawn to the role share a common set of characteristics. While these traits aren’t negative in and of themselves, any one of them in excess (particularly if combined with a paucity of empathy) can spell disaster.
1. Need for Achievement
You don’t climb from an impoverished Brooklyn childhood to the pinnacle of the advertising world as Peter Arnell did unless you simply must succeed. A deep need for achievement is the stalwart anchor of entrepreneurism. Arnell has it in spades, as do most of the other men I’ve studied. Entrepreneurs are known for making things happen—for creating something out of nothing—and it all begins with a burning need to be the best.
Feeling a need for outsize achievement is one thing; actually making it happen is quite another. What separates entrepreneurs from dreamers is their drive. Drive is a powerful combination of proactivity, ambition, and energy. Any person trying to propel themselves to the heights of their field needs to have a high level of raw endurance in order to be able to work long hours and stay focused under duress. Bringing organizations from idea to working reality takes enormous amounts of effort. The high energy and stamina that comes with true drive is essential to managing these demands.
Many entrepreneurs strike out on their own because they can’t stand working for others. Those craving autonomy are drawn to pursuits where they can work around established conventions and do things their own way with little or no oversight from others.
Nobody succeeds entirely on their own, of course, but while the history of technology start-ups looks like a parade of partnerships—Steve Jobs and Steve Wozniak (Apple), Bill Gates and Paul Allen (Microsoft), Mark Zuckerberg and Dustin Moskovitz (Facebook)—none of them stood the test of time. For many entrepreneurs, the need to fly solo is just too strong.
4. Need for Control
Along with the drive and vision inherent in entrepreneurs comes a need for control: the power to direct others and to organize a team toward a larger goal. While having a powerful leader in charge can drive a company forward and keep employees motivated, the dark side is equally potent. Pejorative terms like “control freak” and “micromanager” are part of our lexicon for a reason, and nobody likes to work for, or with, these kinds of people.
5. Internal Locus of Control
Believing deeply in one’s destiny and future is crucial for entrepreneurs, and they must also believe that they are the ones who can make it happen. This internal sense that one can control one’s destiny and bring others along with them sustains many entrepreneurs through the long and difficult road to success. Those with an external locus of control—that is, those who believe they are at the mercy of fate—are much more likely to believe that, say, the economy or their coworkers are responsible for the successes or failures of the organization.
The Lone Ranger wasn’t known for his methodical planning; he acted on impulse, spurring his horse, Silver, to the next crisis to bring justice to the frontier. Impulsivity can serve us well of course; in a fast-moving, competitive world, the ability to draw first and fastest can give one a decisive edge. But impulsivity can also be dangerous. The absence of careful planning and an inability to delegate can introduce a serious threat to a business. As can a penchant for relying on “hunches” for guidance.
7. Extreme Self-Reliance (or Watchfulness)
Entrepreneurs trust their vision above all things, and this can lead to suspicion of others. Constant monitoring for threats can serve entrepreneurs by helping them keep an eye on competitor moves, supplier manipulation, and various changes in customer preferences. But this watchfulness can extend to their own sphere, making them suspicious of their employees and even the world around them, putting them constantly at the ready for disaster to strike.
8. Predisposition to Take Risks
The eighteenth-century Irish-French economist Richard Cantillon, who coined the term entrepreneur, defined it as a “bearer of risk.” Risk taking was one of the first characteristics ever investigated in relation to entrepreneurs, and it’s thought to be the primary differentiator between entrepreneurs and non-business-owning managers. Those who strike out on their own and aim high tend to have a strong appetite for risk. Some successful entrepreneurs get as far as they do because of their willingness to put everything on the line. Yet this same trait can lead to their undoing in cases where what’s at stake far outweighs the potential benefits of a risky decision.
A key trait of entrepreneurs is their belief that they can meet life’s challenges, overcome obstacles, and achieve the goals they set for themselves. It’s easy to see why an entrepreneur would need confidence, and substantial research indicates that this is a key predictor of who will or will not start a company. However, the line between self-confidence and arrogance is famously thin, and too much belief in oneself can lead one to dismiss the views of others.
10. Need for Approval
Entrepreneurs often reveal a great need for admiration and applause, an overriding concern to be heard and recognized. This can inspire grand charisma, giving someone the power to persuade others of an imagined future. Oftentimes, though, it may be a reaction against feeling insignificant, like being nothing, and if it goes unchecked it can easily become malignant.