Why are certain people successful in starting and growing a business while others are not? Is it just luck or being in the right place at the right time? Certainly Bill Gates, with his technical talents, needed the computer revolution in order to make Microsoft the successful company it is. But is it just timing and luck or does personality matter in becoming a successful entrepreneur? Recent studies say yes, successful entrepreneurs share a number of common personality traits, and these traits are the predominant indicators of their success-outweighing education, family ties, skills and experience. Moreover, people who choose business ventures that are in sync with their true personalities tend to experience the greatest level of success and fulfillment.

In a recent study published in the highly regarded Journal of Applied Psychology, Hao Zao of the University of Illinois at Chicago and Scott E Seibert of the Melbourne Business School analysed and combined the results of twenty-three independent research studies. A statistical method known as meta-analysis was used which allows research studies to be combined in a way that yields overall trends within a field of research. Each of the twenty-three studies included in the meta-analysis compared entrepreneurs to a group of managers on the Five Factor Model (FFM) of personality traits: extraversion; emotional well-being; agreeableness, openness to experience and; conscientiousness. The authors found significant differences between entrepreneurs and managers on four out of these five traits. The entrepreneurs scored significantly higher than managers on the traits openness to experience and conscientiousness. Therefore, entrepreneurs are characterised as more creative, more innovative, and more likely to embrace new ideas than their manager counterparts.

The second key set of results showed entrepreneurs to be significantly lower than managers on emotional well-being and agreeableness. Consequently, entrepreneurs are more self-confident, resilient, and stress-tolerant than non-entrepreneurial managers. These results make sense considering the highly stressful, demanding, and chaotic work environments which entrepreneurs usually work. With regard to lower scores on agreeableness, entrepreneurs are likely to be tougher, more demanding, and more prone to drive a hard bargain than managers. This may explain how the successful entrepreneur is able to accomplish a great deal with relatively few resources. In addition, the negative aspects of low agreeableness, which can be significant, are no doubt less detrimental in a small entrepreneurial enterprise versus a larger and more structured organisation. Finally, no significant differences were found between the two groups on extraversion. Therefore, entrepreneurs were no more or less outgoing than the managers.

In his book, The Entrepreneur Next Door, William Wagner talks about how to determine your personality and, more important, how you can adopt those behaviors that entrepreneurship requires to maximise your opportunity for success. Wagner identifies seven broad personality types. Four are generalists: trailblazer; go-getter; manager and motivator. There are also three specialist personality types: authority, collaborator, and diplomat. According to Wagner, the four generalist entrepreneurial personality types start, own, and run the majority of successful businesses. A smaller but impressive number of businesses are run by people who possess one of the three specialist personality types.

What is the bottom line? According to active research, more than 80 per cent entrepreneurs have very similar personality traits. Although our upbringings, belief systems, education, training, and development affect our ultimate behaviors, our core personalities remain relatively constant throughout our lives. The most important factors that distinguish entrepreneurs who barely make it from those who make millions are personality and, sometimes more important, the ability to harness personality, use it, and learn from it.

(The author is a doctoral candidate at Carnegie Mellon University, Pittsburgh, PA. Also, knowledge editor, Financial Chronicle, New Delhi)