The Personality Science of Startup Success: Policy Insights for Australia's Innovation Economy

Paul X. McCarthy, Xian Gong, Fabian Stephany, Fabian Braesemann, Marian-Andrei Rizoiu, Margaret L. Kern

Recent research analysing over 26,000 startups globally has revealed that founder personalities are not just quirky anecdotes but instead they're statistically significant predictors of company success. Using artificial intelligence to analyse social media data and a set of Big Five personality traits, researchers can now distinguish entrepreneurs from employees with 82.5% accuracy based purely on personality characteristics. Companies founded with multiple founders who combine certain specific personality types are up more than twice as likely to achieve successful exits through acquisition or public listing.

For Australian policymakers seeking to strengthen our innovation economy, these findings offer unprecedented insights into the human factors that drive startup success. Rather than focusing only on funding, infrastructure, or regulatory frameworks, this research suggests personality diversity and team composition may be equally critical levers for fostering entrepreneurial success.

The Science Behind Entrepreneurial Personality

The study, led by researchers from the University of Technology Sydney, UNSW Sydney, University of Oxford, and the University of Melbourne, represents the largest-scale analysis of entrepreneurial personality traits ever conducted. By combining data from Crunchbase (the world's largest startup database) with Twitter personality analysis, the research team identified distinct psychological profiles that separate successful founders from the general workforce.

The Adventurous Core

The most significant differentiator is adventurousness which is a preference for variety, novelty, and starting new things. This trait, part of the Big Five personality framework's "Openness" domain, showed the largest effect size in distinguishing entrepreneurs from employees. Successful founders also showed notably lower levels of modesty and higher activity levels, suggesting they're comfortable being the centre of attention and maintaining high energy output.

Critically, the research debunks the myth of a single "entrepreneur type." Instead, it identifies six founder personalities:

• Fighters (pure hackers): Spontaneous and impulsive, tough, sceptical, and uncompromising

• Operators (operations-focused hackers): Highly conscientious, detail-oriented, and orderly

• Accomplishers (technology-focused hustlers): Extraverted and conscientious

• Leaders (pure hustlers): High openness, strong in emotional interests and altruism

• Engineers (hipsters): Highest in imagination and intellect

• Developers (product-focused hackers): Balanced "middle child" personality

The Power of Personality Diversity

Perhaps most significantly for policy consideration, the research shows larger, personality-diverse founding teams dramatically outperform solo founders. Startups with three or more founders are more than twice as likely to succeed as solo-founded companies. Teams combining complementary personality types and such as the "Hipster, Hacker, Hustler" trinity, show the highest success rates.

This finding challenges common assumptions about the lone genius entrepreneur and suggests that fostering collaboration between different personality types should be a priority for innovation policy.

Implications for Australian Innovation Policy

1. Rethinking Incubator and Accelerator Design

Traditional startup support programs often focus on business planning, technical skills, and access to capital. The personality research suggests these programs should also emphasise team formation and personality compatibility assessment. Australian incubators could implement personality profiling to help founders identify complementary co-founders and build more balanced teams.

The research indicates that teams with specific combinations, such as a Leader with two developers, or an Engineer, Leader, and Developer, achieve significantly higher success rates. Incubators could facilitate "founder dating" sessions based on personality complementarity rather than just sector knowledge or technical skills.

2. Immigration and Talent Attraction Strategies

Australia's startup visa program and Global Talent Independent Program could benefit from incorporating personality insights. Rather than focusing exclusively on educational qualifications or business experience, immigration assessments could consider personality traits that predict entrepreneurial success.

The research shows that certain personality combinations are powerful when brought together. This suggests Australia might benefit from attracting diverse personality types rather than optimising for any single "ideal entrepreneur" profile. A policy framework that recognises the value of different founder personalities could help Australia build stronger startup ecosystems.

3. Regional Development and Innovation Hubs

The study confirms that location significantly affects startup success, with firms in certain countries and regions showing markedly higher success rates. For Australian regional development policy, this suggests that creating the right environment for personality-diverse teams to form and collaborate may be more important than traditional infrastructure investments alone.

Regional innovation hubs should be designed not just as physical spaces but as social ecosystems that help with the connection of complementary personality types. This might involve programming that brings together technical developers, business-focused leaders, and design-thinking engineers from across geographic boundaries.

4. University Entrepreneurship Programs

Australian universities could redesign their entrepreneurship education to account for personality diversity. Rather than trying to make all students into "entrepreneurs," programs could help students understand their own personality strengths and identify the types of co-founders they need to succeed.

This approach could be valuable in addressing the cultural barriers to entrepreneurship that exist in some Australian contexts. Students who don't fit the stereotypical "hustler" mould might discover they have essential "hacker" or "hipster" qualities that are equally valuable in startup teams.

Addressing Bias and Expanding Participation

Gender and Diversity Challenges

The research reveals about gender disparities in startup funding and success rates. Female solo founders received 20% less funding than male counterparts, while female co-founded teams received less than half the funding of all-male teams. However, the study also found that successful female founders show personality profiles more similar to successful male founders than to the general female population.

This suggests that personality traits, rather than gender per se, drive success, but systemic bias in funding and support prevents many potentially successful female entrepreneurs from accessing resources. Australian policy could address this through initiatives such as:

• Targeted funding programs that use personality assessment rather than traditional business metrics for early-stage evaluation

• Mentorship programs that match founders based on complementary personality types rather than demographic characteristics

• Investor education about unconscious bias and the importance of personality diversity in founding teams

Cultural and Background Diversity

The research's global scope reveals that startup success patterns vary significantly across countries and cultures. For Australia's multicultural innovation ecosystem, this suggests that founder teams combining different cultural backgrounds and personality types may have unique advantages.

Policy frameworks should recognise that different personality types may be more common in different cultural communities, and that fostering cross-cultural founding teams could enhance overall ecosystem performance.

Practical Policy Recommendations

1. Innovation Metrics and Measurement

Government innovation programs should expand beyond traditional metrics (patents, funding raised, jobs created) to include measures of team personality diversity and founding team composition. This would provide better predictive indicators of long-term success and more effective allocation of government support.

2. Procurement and Government Partnerships

Government procurement programs aimed at supporting startups could incorporate personality-based team assessment as a selection criterion. This would help identify startups with the personality diversity associated with higher success rates, potentially delivering better outcomes for public investment.

3. Education and Skills Policy

The research suggests that entrepreneurship cannot be taught as a universal skill but requires an understanding of individual personality strengths and team dynamics. Educational curricula should shift from generic "entrepreneurship" training to personality-aware team formation and collaboration skills as well as the practical mechanics of establishing and growing successful startups.

4. Research and Development Collaboration

Government R&D programs could use personality insights to optimise team formation for research commercialisation. Academic researchers with strong technical skills (often "Fighter" or "Developer" personalities) could be systematically matched with business-oriented partners ("Accomplisher" or "Leader" personalities) to improve knowledge transfer success rates.

Future Considerations and Limitations

While this research provides valuable insights, policymakers should recognise several limitations. The study focuses primarily on technology startups and may not apply equally to all sectors of the innovation economy. The reliance on social media data also introduces potential bias towards younger, digitally native entrepreneurs.

The research also highlights temporal factors and that startup success patterns change over time, and what works in one economic context may not apply in another. The Science of Startups research is ongoing with more research underway that exploring whether when adjusted for age whether personality changes by generations. Are people born among Millennial and Gen Z generations as entrepreneurial as those in Gen X and Baby Boomers for example? Other Science of Startups research is exploring the macroeconomic impacts of personality diversity. Is any of the variance in GDP explained by personality diversity at a national level for example and does this account for any variance beyond other known factors like immigration and the strength of institutions say.   

Conclusion

The Science of Startups offers Australian policymakers a new lens for understanding and supporting entrepreneurship. Rather than treating founders as interchangeable units or focusing only on traditional support mechanisms, policy frameworks should recognise the critical importance of personality diversity and team composition.

The research suggests that Australia's innovation success depends not just on creating more entrepreneurs but on fostering the formation of personality-diverse founding teams. This requires policy approaches that move beyond individual founder support to ecosystem-level interventions that help with the connection of complementary personality types.

For a country seeking to strengthen its position in the global innovation economy, understanding the personality science of startup success provides a competitive advantage. By incorporating these insights into immigration, education, regional development, and innovation support policies, Australia can build a more sophisticated and effective approach to fostering entrepreneurial success.

The message for policymakers from the science of startups is that personality is a critical economic factor that deserves systematic policy attention. The question is whether Australia will be among the first to leverage these insights for competitive advantage in the global innovation race.

This Insight draws on a paper titled The impact of founder personalities on startup success, available at https://www.nature.com/articles/s41598-023-41980-y.pdf

The citation is: McCarthy, Paul X., Xian Gong, Fabian Braesemann, Fabian Stephany, Marian-Andrei Rizoiu, and Margaret L. Kern. "The impact of founder personalities on startup success." Scientific Reports 13, no. 1 (2023): 17200.