Building a successful team

Nobody is perfect, but a team can become so.

In another post, we highlighted how the Big Five brings differentiation between successful and unsuccessful individual founders. Below, we take it a step further: what combinations of personalities make a HiTech StartUp successful?

First requirement: finding the right "building blocks" for the team. Next step is turning it into a productive team through appropriate management skills and techniques and team building.

McCarthy et al (2023) explore in Nature whether they can identify a "typology" of successful founders in HiTech StartUps using the team Big Five results.
Their research question was, in a nutshell: can everyone make a StartUp successful from their personality, or is one personality trait more suitable than another to lead to a successful exit after all?

They examined the successful or unsuccessful development of 21 187 HiTech StartUp as a function of more than 300 variables. Some of these variables were related to the firm (e.g. location, stage of development of the StartUp). Other variables had to do with the founders (e.g., number, gender...). The influence of most of these variables were filtered out to delve deeper into personality differences.
It is no coincidence that the authors were able to publish in Nature. Numerous analyses were conducted to validate the successive research steps.

They arrive at 6 successful starter profiles. All of these profiles score high on intelligence, adventurousness and activity level - some a bit more than others.

But each of the profiles places emphases on also different personality traits. The main differences are presented in the table below.

Uit McCarthy et al. (2023)

Don't let the naming in this table mislead you: an "engineer" could be a chemist, psychologist or a lawyer. An "operator" could be an engineer, economist or a biochemist by training.
Although these profiles are named according to the professions in which you often find the combination of personality traits, the designation is used here independently of the professional domain.

And that leads us to the next question....

Do some combinations of personalities create a more successful team in the HiTech StartUps?

The combinations of two Leaders plus one Developer gives the highest success rate. Slightly less successful towards exit are starter teams composed of two Developers plus an Operator, or, an Engineer plus a Leader plus a Developer.

These combinations are all more than twice as successful as homogeneously composed Accomplishers founder teams or the starter team with only a Developer plus an Operator.

It is striking that the three top StartUp founders teams have the Developer as a common element.

So the Developer as a "middle child" without extremes (min or max) in personality works successfully when combined with an excess of Leader traits (adventurous, persistent, assertive, lots of self-control and confidence) or in combination with an Operator (careful and agreeable) or together with a Leader and an Engineer (lots of imagination and intellect).

These combinations work better than a homogeneous StartUp team with only Accomplishers (organised, outgoing, down-to-earth so with little imagination) or a Developer alone together with an Operator.

In concrete terms, this means, for example, that in a team, with only Accomplishers, people are highly organised, think in business and concrete terms, are sufficiently outward-looking but do not deploy enough creativity and flexibility to cope with the endless stream of problems and quandaries that are peculiar to the life and success of a StartUp.

Using typologies has advantages and disadvantages

Advantages are clarity, seeing connections, being able to think in consequences of getting certain people to work together.
The disadvantage of using typologies is that few people "purely" represent a type. Most people are a little more complex than the sheer type of which they have most characteristics. In changing circumstances, for example greater or lesser workload, people may also show their prominent type more or less to the outside world.

Number of founders

Overall, McCarthy et al (2023) find that the success rate of StartUps increases from 1 to 7 co-founders. Three, four and five co-founders are more successful than one or two founders. Six founders are more successful than three, four or five co-founders. Of the 21 187 StartUps surveyed, those with seven co-founders are the most successful.
We often hear that more co-founders dilutes ownership of the StartUp too much or complicates decision-making in the team. But it does improve the chances of success, even if more frequent communication means it takes longer to make an important decision. As an explanation, it is thought, not only the greater opportunity for diversity of personality traits described above but also the more extensive support network in a larger founder team.

Turning 1 + 1 + 1 = 6

So do you have much choice when putting together your StartUp team?

Usually not, for various reasons: who has the appropriate expertise and experience, skills and network, who fits into the career picture, who is affordable given the stage of development of the StartUp...?

Then team building comes into play: recognising each other's strong talents (not only in terms of expertise but also in behavioural terms). In this team coaching, the Management Team starts to recognise and appreciate each other's differences and encourage each other to use that for optimal team functioning. Ensuring that people experience personality differences as an enrichment instead of a daily source of irritation.

From previous profiles, it is clear that you need to have all personality traits present at least "sufficiently" (the need for a Developer profile).

On top of that, you are looking for additional talent to be outward-looking, work consistently and accurately, maintain imagination, connect and be pleasant to work with...

This systematic approach can contribute to greater team success by harnessing the diversity brought together.

By understanding the different personality types within a team, team members can be taught to communicate and work together more effectively.
Diversity in thinking styles, priorities and approaches can lead to a wider range of interests being balanced, allowing more ideas and solutions to emerge and making the team more flexible in addressing the myriad challenges faced by HiTech StartUps.

Awareness of and respect for each other's strengths and preferences prevents much friction and fosters positive team dynamics, improving productivity and team performance.

Summary

Investors, founders, employees and other stakeholders have a strong interest in putting together a diverse StartUp team. In doing so, we look not only at subject-matter expertise, for example, but also at diversity in thinking and acting styles. Once the team is put together, we must do everything to make it successful by developing the team and its ways of working. The only losers are the competitors.

Would you like to get acquainted with our way of recruitment and development assessment? Or, the step that follows, namely our approach in building the productive team? We have explained what we do, and why, in more detail on this website.

Would you like to have an informal talk with us about this? Gladly, contact us via the contact page, please.

Reference

Paul X. McCarthy, Xian Gong, Fabian Braesemann, Fabian Stephany, Marian‑Andrei Rizoiu & Margaret L. Kern (2023) The impact of founder personalities on startup success.