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The Psychological Makeup of an Entrepreneur
Words Naomi Adjei
Defining what entrepreneurship is and the so-called entrepreneurial spirit, is one that psychologists have tried to do and as with many concepts in the human psyche there is no one-size-fits all concept. Although there are definitely outliers, there are common tendencies and behaviours that characterise those who decide to take this path. Is an entrepreneur born to do what they do; can these skills and behaviours be cultivated? Is it just sheer determination or simply just the survival of the most psychologically fittest? Assistant Forensic & Occupational Psychologist Naomi Adjei explores.
An entrepreneur is defined as one who organises, manages, and assumes the risks of a business or enterprise. Specifically, the field of individual differences psychology has identified and defined entrepreneurship as “behaviours consistently identified in relation to opportunity recognition, opportunity exploitation, innovation, and value creation.” Ultimately then an entrepreneur is someone who is innovative and is able to create something out of nothing.
What are the common personality traits and characteristics that make an entrepreneur? Personality trait studies have shown that extraverted individuals are more likely to engage in entrepreneurial activities, these include but are not limited to starting new businesses, finding new ways of helping society, and behaving entrepreneurially within organisations. This is unsurprising given that extraversion is linked to social interactions and that extraverted individuals thrive from being around others. However, interestingly the trait of extraversion has been found to be less linked to invention-type entrepreneurship and product development. As a result, more extraverted individuals are less likely to be involved in developing, building, or creating designs. A possible explanation is that a major part of creative innovations involves individuals, often solitary, effort and endeavours. Therefore, businesses and founders often talk about seeking co-founders and building a team of people who possess different personalities and skills to them.
“…founders often talk about seeking co-founders and building a team of people who possess different personalities and skills to them.”
A study into entrepreneurship and personality assessment by the Myers-Briggs Company found that the top two personality traits entrepreneurs possess are perception and intuition. It concluded that entrepreneurship and success doesn’t come to those who are smartest, but success comes to those who see out opportunities and take them. We are all familiar with the school dropout to successful entrepreneur story however, the other side to that is the wealth of knowledge within the teams and advisors behind them. Other common traits are; the need for achievement, tolerance for risk or uncertainty and believing that the performance of the business is controlled by their own actions and accessibility.
The other side of it is the psychological price of entrepreneurship. A common behaviour within entrepreneurship and leaders is impression management, which is a tactic some leaders use with the aim of attempting to influence the perceptions of others by regulating information in social interactions. Others might be aware of this as “fake it till you make it.” Whichever way you look at it, it could be seen as a level of optimism. Having a certain level of optimism is a key trait of an entrepreneur, a statement by Daniel Kahneman states: “a lot of progress in the world is driven by the delusional optimism of some people.” A common Instagram posted quote comes to mind: “live life and make decisions as if everything is rigged in your favour.”
Entrepreneurship is a path that is not taken by the masses so surely it is understandable that such a path will require more resilience. Not just resilience but the sheer ability to hustle, and not being consumed by doubt. This path will inevitably attract feelings of “the imposter syndrome” which is thoughts of not being qualified to be in the position that you are in and the fear that you will be found out as a pretender. Having the mental resilience to advance regardless of these thoughts is crucial. Entrepreneurship can also be a lonely road, there are days when your passion and drive may overtake that of your team or those around you and being willing to continue regardless is what will help you to progress.
An interesting theory that characterises entrepreneurs is the hypomanic edge by John Gartner which is an often-overlooked temperament. Hypomania is a mild but functional form of mania which includes hyperactivity and the need to be constantly active. The idea of having extreme but functional emotions may be responsible for some entrepreneurs' strengths as well as their flaws.
So are we saying that this is the price of becoming a successful entrepreneur or having the self-belief that you are able to do something and being able to translate this passion to their teams? Others have suggested that the rogue psychology of an entrepreneur is characterised by behaviours that are controversial and aggressive such as having narcissistic traits. Traits that successful entrepreneurs use to motivate themselves personally, their teams and psychologically deploy to overtake their competition.
Do we therefore have to accept that the emotional highs and lows are just what comes with being an entrepreneur like all other life stages, but just more prominent in the case of starting your own business. Either way the path of ‘success’ was never destined to run smoothly.
