Entrepreneur Personality traits
Entrepreneurship is not a new phenomenon nor has it's developed in the last few decades since humans started working and building materials they are practicing some sort of entrepreneurship there are writings from the 17th century that are focused on entrepreneurial behavior and a very famous book by Frank Knight which is written in 1921 Titled „ Risk, uncertainty, and profit“ still considered to be a source to learn the entrepreneurial traits and behaviors. Entrepreneurship is not only limited to the big successful corporations but entrepreneurs exist in all sizes and markets which gives a great variety in their approaches, priorities, and behaviors.
Personality traits of an entrepreneur
It is very important to figure out when and how to study the personality traits of an entrepreneur as there are so many studies reflect the personality traits of an entrepreneur that accounts for the entry in the business and stays with the entrepreneur and some traits that the entrepreneur develops after the entry into the business and keep on developing over time such as risk tolerance which is a very important personality trait in the high growth high-value business however all the researchers agree to the point that the personality traits do develop over the time of the entrepreneurship but basic traits stay with the entrepreneur before and after entering the business and also there is a basic co-relation in the personality traits of an entrepreneur and to the degree of success of an organization. Keep in mind that the organization's success does not only depend on the entrepreneurial traits and several other factors count for the success of the business such as team, finance, Niche but also all of these factors are somehow related either directly or indirectly to the entrepreneurial personality traits (Fallick, 2006)
For example, an entrepreneur that has high risk-taking trait will not appeal to the employee who is seeking regular growth in the career or looking for a long term settled business however it might attract the employee who shares the same vision as the entrepreneur also the venture capitalist do consider the business proposals very carefully the risk portfolio of the business. Sometimes entrepreneurial personality traits do collide with the business ideas and market practices that cost them a lot but also these traits stand them out from the regular ideas and provide a fresh idea in the market, almost all of the high tech entrepreneurial ideas were against the market trend and unique such as Snapchat, Instagram, Pinterest, etc. (Mathews, 2018)
What should be the ideal personality traits in an entrepreneur?
Among various Researchers that support the idea of an ideal personality for an entrepreneur one very Prominent Researcher David Gartner has discouraged the idea that organization success has a strong link with entrepreneurial personality traits and instead emphasized focusing on how the organizations emerge and what are the relevant facts that support the organizational growth and with the profound impact of the other factors he instead emphasizes that there is no ideal personality of an entrepreneur that guarantees a successful organization however some personality traits do help in the positive growth of the business (Gartner, 1985)
Most researchers are not only interested in the traits that lead to the venture start but also they focus on the traits that keep on adding to the success of a venture and long term survival and whether or not those traits are generalized or they are just limited to one niche for example social compatibility is not a required niche for the high tech entrepreneurship in which most the entrepreneurs are socially not active and show the introvert behavior while the industries such as hospitality and entertainment the social abilities and interest of an entrepreneur add a lot to the growth of their business (Sarath, 2018).
The study of entrepreneurship does not only helps in the study of the correlation between the success of the business and the personality of the person who started it but also it helps the business schools design the curriculum for the people who wish to study entrepreneurship successfully and to design such courses and specialized schools which helps the entrepreneurs learning from practical examples and seeking better opportunities with the help of developing personality traits (Shane & Venkataraman, 2000). A lot of researchers also argue that the personality traits are not nature driven or exist in the entrepreneur before the start of the business but some traits develop with the time of business or manipulate from the surrounding environment such as risk-taking behavior in the entrepreneur gets stronger with the success of each decision also risk-taking behavior depends on the team of entrepreneurs as the ones with the most risk-taking behavior are the ones which have the team possessing the same trait of personality (Turker & Sonmez Selçuk, 2009).
Personality study of entrepreneurs is not just associated with business studies or economics but it is created by a complex collaboration of economics, business management, sociology, psychology, philosophy, and logic to answer simple yet complex questions such as who are entrepreneurs? what traits define them? what should be an ideal entrepreneurial personality should be? to design an entrepreneurship degree program which traits and sciences are to be taken into consideration? what psychological traits drive the entrepreneurship mindset? etc. (Wolfe & Shepherd, 2015).
There are three basic questions that every researcher in entrepreneurship interested in 1) is there any specific personality traits that define the likely hood of a person becoming an entrepreneur 2) are there specific personality traits that help the entrepreneurs gain success in their startup? 3) are the personality traits in an entrepreneur vary with their choice of business or geographical area or do all the entrepreneurs more or less share the same personality traits? According to The Myers-Briggs Type Indicator which is a personality assessment tool used in most of the fortune 500 companies have to describe the two more widely present personality traits in more or less all of the entrepreneurs despite their social status or geographical location or the industry type they are venturing in these two traits are 1) Perception 2) Intuition (Patel, 2017).
Four areas of personality
Despite having a lot of models, psychological and sociological assessments to check and define the personality traits most of researchers have narrowed down these four areas to be of more critical importance in determining the personality of an entrepreneur
Extrovert or introvert
This area is very important in terms of the energy and motivation drive of an entrepreneur and answers whether the entrepreneur's energy driver is the communication or interaction with the outside world and people around them or the motivation factor is exploring their inner world and having minimum interaction with the outside world (Shamuganathan, 2016). Though most entrepreneurs have a mixture of both sides in all of them one side is more dominant than the other side and it also depends on the type of business or startup, for example, most of tech entrepreneurs do not find social interaction very productive and usually, they hire people to minimize the social interaction with the business community and focus on their inner ideas and goals while the entrepreneurs in the entertainment and sports industry focus more on the relationship building and spend most of the time dealing with the people (Goss, 2005)
This is very important and usually decides whether the startup will turn out to be profitable or not it depends on how the entrepreneur process the information surrounding them whether they look at the numbers and utilize the five senses or they mostly look at the bigger picture besides the current facts and figures, the entrepreneur with the correct composition of these two traits can predict future opportunities and find the failed business or market that can be turned into a profitable one example such as Apple which created Touch screen phones when there was no market and despite Nokia being in the loss for several years Apple invested more and more into cellular phone business another example is Netflix which have seen the future market for the video streaming and despite blockbuster being the market leader and have 80% market in hand Netflix did not give up and ultimately run blockbuster out of business (Fallick, 2006)
Entrepreneurs have to analyze many situations in a day, especially in the beginning of their startup the analyzing ability is a very important personality trait of an entrepreneur there are two different schools of thought on this one the entrepreneur might have or utilize both of them but usually have more trait of one then another number one is entrepreneur might logically analyze the current situation by placing facts and figures and then act accordingly which is the case in most of the situations the second one is considering what will work best for the people around them even if it goes against the numbers and facts the complex situations needs to be analyzed using both if entrepreneur just focus on one methodology they might lose their grip on the overall situation however it also depends on the sensitivity and importance of the case (Wolfe & Shepherd, 2015)
It is so far the most important personality trait of an entrepreneur for the well-being of the startup as the vision of an entrepreneur to the outside world depends on the communication, the clarity of the message and the style of conveying the message to the outside world is what matters most, entrepreneurs have two basic approaches to convey their message to the outside world whether their clients (Leisinger, 2015)venture capitalist or internal team the first one is the communication in a planned and orderly way which makes the most sense in the typical business communications which deals with the numbers and figures the second way of communication is the planned spontaneous way of communication which leaves room for the sender and receiver both to input their view in the communication and gives more flexibility for expression and discussion.
For business deals these both ways of communication are totally suitable and widely used however a proper proportion of flexibility and hard facts creates a balance for an entrepreneur to convey the message to the outside world (Kinser, 2017)
Social entrepreneurs are in contrast to commercial entrepreneurs are more focused on the improving quality of life within society and serving humanity in general however with the rise of charity culture and social entrepreneurship among celebrities there is now a huge boom in the social entrepreneurship market however entry to social entrepreneurship is not as easy as commercial entrepreneurship (Crant, 2017). Social entrepreneurs are more focused on closing the gap between the actual needs of the people and what the government or authorities are providing them instead of creating a new market or an innovative product social entrepreneurs tend to close the gap with innovative means and processes. For example, in Africa, there are a lot of social entrepreneurs working with the United Nations to provide food and clean water to the needy ones with the help of innovative products and processes (Nga & Shamuganathan, 2010)
The traits of social entrepreneurs tend to be more tilted towards social achievement rather than personal achievement and well-being of the society in general rather than organization financial health however the general traits are almost similar with both social and commercial entrepreneurs such as creativity, innovativeness, sense of destiny, sense of freedom and independence, as far as the risk-taking trait seems to be lower in the social entrepreneurs as compared to the commercial entrepreneurs (Crane & Crane, 2007)
Social entrepreneurship is emerging in the last two decades as a result of increasing capitalism and widening of the gap between riches and the poor also the unequal distribution of wealth in a society it is a sustainable tool to create an integrated society that balances the financial interests and the social values of a society. Social entrepreneurs are generally found to have more agreeable and flexibility than commercial entrepreneurs and they mold their business plans as per the needs of the society in contrast to commercial entrepreneurship which mostly focuses on manipulating the market in favor of the business (Elan, 2018)
To create an entrepreneur who maintains a balance between financial interest and social values there is a need to inculcate the personality traits of social sensitivity, social networking, and financial rewarding within the learners of entrepreneurship in order not to create an entrepreneur who only cares about the financial well-being of the organization but in turn is not willing to provide anything to the society which provides the basis for the existence of their business (Goss, 2005).
This study is an initial study on the common personality traits of entrepreneurs based on the concepts derived from the literature. There is no secret formula to being a successful entrepreneur however there are a few personality traits that we have found common among the successful entrepreneurs through different studies among them are strong work ethic, strong people skills, passion, determination, competitiveness, confidence, and discipline, etc. It has also been found that entrepreneurs do develop traits during their course of entrepreneurship and traits can be developed depending on other factors involved. Business schools should consider the common personality traits while designing their curriculum for entrepreneurial studies that will not only help entrepreneurs bring the best out of themselves but also helps in identifying the potential successful entrepreneurs. Other than these traits, every successful entrepreneur just wants to see what is at the top of the business mountain and they will pick up everything they get on the path while on their way up. But that is not where their determination ends.
Author: Muhammad Fahad Ali, a student at LIGS University, under the supervision of Dr. Michael Aubry.
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