Startup CEO Traits
I was having lunch with a friend who is a retired venture capitalist and we drifted into a discussion of the startups she funded. We agreed that all her founding CEOs seemed to have the same set of personality traits – tenacious, passionate, relentless, resilient, agile, and comfortable operating in chaos. I said, “well for me you’d have to add coming from a dysfunctional family.” Her response was surprising, “Steve, almost all my CEO’s came from very tough childhoods. It was one of the characteristics I specifically looked for. It’s why all of you operated so well in the unpredictable environment that all startups face.” 74HGZA3MZ6SV
I couldn’t figure out if I was more perturbed about how casual the comment was or how insightful it was. What makes an individual a great startup founder (versus an employee) has been something I had been thinking about since I retired. My comfort in operating in chaos was something I first recognized when I was working in the Midwest.
The Rust Belt – (Skip this Section if I’m Boring You)
Out of the Air Force, my first job out of school was in Ann Arbor, Michigan, in the mid-1970’s installing broadband process control systems in automotive and manufacturing plants throughout the Midwest. I got to travel and see almost every type of Rust Belt factory – at the time, the heart and muscle of American manufacturing – GM, American Motors, Ford, U.S. Steel, Whirlpool. Our equipment was installed in the manufacturing lines of these companies, and if it went down sometimes it brought the entire manufacturing line down.
I always made a habit of getting a tour of whatever manufacturing plant I was visiting. Most plant foremen were more than accommodating and flattered that someone actually was interested. I was fascinated to learn how everyday objects (cars, washing machines, structural steel, etc.) that ended up on our shelves or driveways were assembled.
My favorite factory was the massive U.S. Steel plant by Lake Erie. On my first visit the foreman walked through this enormous building, not much more than a giant steel shed, where they had an open hearth furnace. We came in time to see the furnace being tapped, pouring steel out into giant buckets. (Years later I realized I watched the end of an era. The last open hearth furnaces closed in the 1980’s.)
We stood on a platform several stories up and light streamed diagonally through windows set high on top of the building cutting through the black soot particles created when the incandescent steel hit the bucket. It was too loud to talk so I just watched the steel pour through the clouds of soot backlit by the blinding bright liquid metal. It looked like an update of the iconic image of Penn Station writ large.
And as I stared through the billowing clouds of soot flashing between black and white took on fantastical shapes as tiny figures on the factory floor scurried around the bucket. I could have stayed there all day.
Automobile plants were equally fascinating. They were like being inside a pinball machine. At the Ford plant in Milpitas the plant foreman proudly took me down the line. I remember stopping at one station a little confused about its purpose. All the other stations on the assembly line had groups workers with power tools adding something to the car.
This station just had one guy with a 2×4 piece of lumber, a large rubber mallet and a folded blanket. His spot was right after the station where they had dropped the hoods down on the cars, and had bolted them in. As I was watched, the next car rolled down the line, the station before attached the hood, and as the car approached this station, the worker took the 2×4, shoved it under one corner of the hood and put the blanket over the top of the hood and started pounding it with the rubber mallet while prying with the lumber. “It’s our hood alignment station,” the plant manager said proudly. These damn models weren’t designed right so we’re fixing them on the line.”
I had a queasy feeling that perhaps this wasn’t the way to solve the car quality problem. Little did I know that I was watching the demise of the auto industry in front of my eyes.
Operating in Chaos
Repairing our equipment could be time critical. One day, I was at the Ford Wixom auto assembly plant training my replacement and I was at met at the door by an irate plant manager. He welcomed us by screaming, “Do you know how much it costs every minute this line is down.” As I’m troubleshooting our equipment scattered across the plant, (in the computer room, above the steel, in NEMA cabinets next to line, etc.,) the manager followed us still yelling. My understudy looked at me and said, “how can you deal with this chaos and still focus?” And until that moment I had never thought about it before. I realized that what others heard as chaos, I just shut out.
A Day in the Life of A Founder
For those of you who’ve never started a company, let me assure you that it never happens like the pleasant articles you read in business magazines or in case studies. Founding a company is a sheer act of will and tenacity in the face of immense skepticism from everyone – investors, customers, friends, etc. You literally have to take your vision of the opportunity and against all rational odds assemble financing, and a team to help you execute. And that’s just to get started.
Next, you have to deal with the daily crisis of product development and acquiring early customers. And here’s where life gets really interesting, as the reality of product development and customer input collide, the facts change so rapidly that the original well-thought-out business plan becomes irrelevant.
If you can’t manage chaos and uncertainty, if you can’t bias yourself for action and if you wait around for someone else to tell you what to do, then your investors and competitors will make your decisions for you and you will run out of money and your company will die.
Great founders live for these moments.
Creating the Entrepreneurial Personality – A Thought Experiment
Fast forward three decades back to today. The lunch conversation was an interesting data point to add to a hypothesis I’ve had.
I’ve wondered, just as a thought experiment, how would we go about creating individuals who operate serenely in chaos, and have the skills we associate with one type of entrepreneurial founder/leader?
One possible path might be to raise children in an environment where parents are struggling in their own lives and they create an environment where fighting, abusive or drug/alcohol related behavior is the norm.
In this household nothing would be the same from day to day, the parents would constantly bombard their kids with dogmatic parenting, (harsh and inflexible discipline,) and they would control them by withholding love, praise, and attention. Finally we could make sure no child is allowed to express the “wrong” emotion. Children in these families would grow up thinking that this behavior is normal.
(If this seems unimaginably cruel to you, congratulations, you had a great set of parents. On the other hand, if the description is making you uncomfortable remembering some of how you were raised – welcome to a fairly wide club.)
Over the last 5 years I’ve asked over 500 of my students how many of them grew up in a dysfunctional family (participation was voluntary.) I’ve been surprised at the data. In this admittedly very unscientific survey I’ve found that between a quarter and half of the students I consider “hard-core” entrepreneurs/founders (working passionately to found a company,) self-identified as coming from a less than benign upbringing.
Founders as Survivors
My hypothesis is that most children are emotionally damaged by this upbringing. But a small percentage, whose brain chemistry and wiring is set for resilience, come out of this with a compulsive, relentless and tenacious drive to succeed. They have learned to function in a permanent state of chaos. And they have channeled all this into whatever activity they could find outside of their home – sports, business, or …entrepreneurship.
Therefore, I’ll posit one possible path for a startup founder – the dysfunctional family theory.
Throwing hand grenades in Your Own Company
One last thought. The dysfunctional family theory may explain why founders who excel in the chaotic early phases of a company throw organizational hand grenades into their own companies after they find a repeatable and scaleable business model and need to switch gears into execution.
The problem, I believe, is that repeatability represents the extreme discomfort zone of this class of entrepreneur. And I have seen entrepreneurs emotionally or organizationally try to create chaos — it’s too calm around here — and actually self-destruct.
So What?
Lets be clear, in no way am I suggesting that growing up in a dysfunctional family is the only path to becoming a founder of a startup. Nor am I suggesting that everyone who does so turns out well. And in particular I’m not suggesting that every employee who joins a startup fits this profile, it just seems more prevalent in the founder(s).
And this hypothesis might be a good example of confusing cause and effect. Yet I am surprised given how much is written about the attributes of a startup founder, how little has been written about what “makes” a founder.
Let me know what you think. Does any of this match your experience or people you know?
Comments and brickbats welcomed.
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Filed under: Customer Development, Family/Career/Culture, Technology | Tagged: Early Stage Startup, Entrepreneurs, Startups, Steve Blank, Tips for Startups |
Heh. I coach agile teams for a living, and I do most of my work with start-ups. Just last week I was telling somebody that I was grateful for my chaotic childhood. Getting over that has given me the ability to gradually impose some order on chaos without freaking out.
My big worry with this approach is that I may still be too comfortable with certain sorts of harmful chaos, perhaps blind to them. The thought that I might even be partial to them is intriguing!
fascinating. i’ve theorized about this myself. many of the most successful people i know have some tragic life stories that have driven them to do great things. to tragedy, though, i would add dissatisfaction. or perhaps, discontent. stated positively, this would often be viewed as progressive perfectionism. endless discontent, while not the happiest way to live, drives progress and innovation. pair that with the strength that comes from overcoming tragedy, and you have yourself an entrepreneur!
William, I like your point about being “too comfortable” or even “partial” to chaos. i often find myself bored, i think, because of this. reminds me of a line in ray lamontagne’s song, Empty: “I’ve been to hell and back so many times, I must admit you kind of bore me.” sometimes those with battle wounds just keep on going into battle because they’re addicted to it…
As one of the students you have discussed this with, you know how I feel. I’ve actually been thinking about it a lot lately. This concept could be very empowering to struggling teens.
There’s a human compulsion to take and read all manner of personality tests … because most of us are egotists, and love learning (or “learning”) about ourselves.
With that in mind, I really enjoyed this article. What could be more flattering to an entrepreneur than to read
Founding a company is a sheer act of will and tenacity in the face of immense skepticism from everyone – investors, customers, friends, etc. You literally have to take your vision of the opportunity and against all rational odds assemble financing, and a team to help you execute. And that’s just to get started.
?
But, ego-stroking aside, it was a great post.
Your THEORY is well founded! 🙂 Dabrowski’s Theory of Positive Disintegration supports your hypothesis extremely well.
Basically, when certain people go through bad times, but also have the tendency to react positively by putting their energy in moving forward, they are able to handle a lot more as well as see opportunity or a bright side when others do not.
Great thinking! 🙂
I think it’s a little muddy with cause vs effect.
The environment you describe certainly can’t help anyone… but it does seem to highlight the resilient vs the not-resilient. I had a pretty bad upbringing myself. For whatever reason, I am resilient. My older brother is not. I have had lots of trouble, but I’ve always surmounted it… he never has.
But who’s to say that he wouldn’t crumble in the face of lesser problems, even if we’d had an idyllic childhood? And who’s to say I wouldn’t be a stubborn mule regardless, too?
Interesting to think about, either way. (And, for some people, sad. But what can you do?)
Steve sees the dysfunctional family as a classroom of sorts. You see it as a filter. There is not enough data here to arrive at a conclusion and both are compelling views.
I agree with Amy. As interesting as this blog is, it ultimately brings up the century old question of what is God-given (born) versus what is man-made (taught).
And I believe that the deeper a characteristic trait is, the less it can be learned/trained, so good entrepreneurs are learned while great entrepreneurs are born.
Enjoyed the stories of your experiences.
The hypothesis though seems pretty weak argument to me, and a somewhat bass-ackwards way of looking at what one would presume is more the real goal, of creating processes to develop successful-founder ability.
What about growing up well-loved by good parents, but with extended periods of chaos? I like my odds. 🙂
I’m reluctant to dive into the psychology of what makes a founder, but I can say that the whole troubled childhood is true of a lot of the founders I know including myself.
That said, there are *a lot* of people out there who come from broken homes and who had extremely difficult childhoods and relatively few founders. That makes proving this one way or another all the more difficult.
Its an interesting idea, but i wonder if it has less to do with developing skills to deal with adversity, as opposed to simply building in an insecurity that fuels the person’s drive to succeed. There’s a famous quote that reads “entrepreneurs have something to prove”. I can personally attest to this. I was raised in a very stable / functional family with great parents, but there were a number of exogenous events and factors in my teenage years that in retrospect gave me a hunger to thrive.
Bill Gates i believe was raised in a fairly stable family as well, and my guess is that years of getting picked on and teased in school embedded a solid base of insecurity that fueled him later.
I also recollect reading a study not that long ago that found that men raised in middle-to-upper middle class families made up an overwhelmingly dominant fraction of entrepreneurial success. I believe the thesis of the article was that middle-upper middle class provided a strong base of education and resources, but without removing the overwhelming economic drive to succeed.
[…] Founders and dysfunctional families Startup CEO Traits I was having lunch with a friend who is a retired venture capitalist and we drifted into a discussion […] […]
I’m wondering how someone can practice operating in chaos? assume that this person did not have a troubled childhood (that could possibly help in this regard based on your hypothesis).
Anyways, to be a great entrepreneur you don’t have to be born a great entrepreneur; you can learn it if you’re given the chance.
Though I had a very stable family with very good parents, I grew up in a country (Lithuania) that was occupied by Russia for 12 years of my life. Surviving the oppression, seeing rapes and murder committed by Russian military, KGB on our necks entire time, being afraid to talk about certain topics, and than constant change when we were kicking them out of our country – that is what I think made me so resilient to chaos.
So my statement is: it is not your parents, but the environment you grew up in. There is a reason why so many successful entrepreneurs are from countries that were oppressed by occupying nations.
I agree more with what you said Apollo; chaotic environment can include the family. Good point.
I grew up homeschooled–and played sports in the public school. Great parents, who loved me dearly.
but every day at practice, i was reminded that i was different–playing sports in a world where no one understood my education.
gave me the best set of guts i think i could have had, because i saw that my education, in both the acadamic arena and in general social skills, taught me better than 95% of the people i run into… when your parents take a risk on you, and it pays off, it emboldens you to take a risk on yourself–even when no one knows what the heck you’re doing…
The fine line might be that those who `survive’ a dysfunctional family have a better chance. I think `survival skills = nature’ and `dysfunctional family = nurture’, where nature plays a bigger role. I have read that about 50% of behavioral traits are heritable, 0-10% of behavioral traits are acquired from family and the remaining is mostly acquired from peers (http://www.psybertron.org/slatereview.html).
I was doing research for a dissertation (that never got finished) interviewing serial entrepreneurs to answer the question “are entrepreneurs born or can they be made?” As both a VC and now as an OD consultant specializing in start ups, I see that many of the traits that might be considered “unhealthy” from a purely psychological point of view are actually adaptive for a start up entrepreneur (such as the ability to suspend reality testing and keep going after a dream in the face of lots of discouragement!) Anyway, one of the CEO’s I interviewed said she thought entrepreneurs had been people who at some point in their lives had realized that none of the rules they had been taught really worked, that they were going to have to create their own. That enabled them to be comfortable in ambiguity and in the situation where they had to create something from nothing. And, of course, that probably makes them the first folks to question or discard the rules — which can cause chaos when the company gets big enough that rules and processes and systems are necessary
I agree with this theory 100% from my own experiences founding startups and coming from a (borderline) dysfunctional family. I have seen other friends come from very stable environments who fall apart in chaos and feed off of security.
Interestingly, this is exactly what Hemingway said when asked for the one trait a great writer needed.
I was raised in a pretty rough neighborhood (Halawa Housing, in Hawaii). My mother was a single parent on welfare and raised 8 kids. I picked up street smarts out of necessity — learning how to navigate the buildings, gangs, social groups, defending myself, making alliances with the bullies/leaders, how to dissolve conflict, and most of all learning to observe people.
The ends never met, money was always tight. The housing project was full of drug users and people exploiting the welfare system. Throughout all this my mother still instilled in an implied concept of using my skills, brains, or hands to earn money to “get out” of the ghetto.
I think the irony of my motivation and obsession with startups is the desire to keep in touch with chaos and risk I lived through while maintaining at least some a small level of control. Do I think I owe my successes to these experiences? Sure, but I would never wish the same experience upon my children.
The fear of ghosts of our pasts and the fear of a marginal future continues to motivate me to never give up and wake each day to keep moving forward.
“It ain’t where you from, it’s where you at” — Mos Def “Habitat”
[…] a start up or a turn around requires additional traits mentioned in Steve Blank’s post titled “Founders and Dysfunctional Families.” Black mentions: tenacity (in the face of skepticism from investors, customers and friends); an […]
I am not sure that dysfunctional families are intrinsically good. It seems to me that what you are getting are the survivors, who have the special qualities needed to face serious challenges.
However, it is quite possible that the accumulation of hard knocks, whether from the family or other sources, can do a lot to sharpen perceptions and judgment. It is not my view that a carefully structured and maximally sheltered upbringing is a good idea.
Ideally, nurture and education ought to be able to fulfill this function while doing less emotional damage.
Sadly, we have not yet learned how.
I agree with Maurice Karnaugh. I think that VC was taking advantage of the information revealed about the survivors from the fact of survival. There are other ways to cultivate the ability to deal with stress and uncertainty in life. The military, for example, is pretty good at training people that way — an example that complicates even Mr. Blanks’s case.
I think “survivorship” is more the entrepreneurial driver than dysfunctional upbringing, although the latter often begets the former. the great ceo’s i’ve seen just don’t give up. i’ve best heard it described as “fire in the belly” just like the one in the steel mill you describe. adversity is just an issue to confront, overcome…
i lost my infant son four months into startup #4. the only thing that kept me barely sane was immersing myself in the startup, heads-down, drivign business through the pain the way a marathoner confronts a hill with cramps at, say, mile 23. The successful entrepreneur’s mantra might well be “what doesn’t killya makes ya stronger.”
“… between a quarter and half of the students I consider ‘hard-core’ entrepreneurs/founders (working passionately to found a company,) self-identified as coming from a less than benign upbringing.”
Perhaps I’ve misunderstood this sentence, but your numbers actually show that a minority of founders come from dysfunctional families. Inverting your measure, we see that 75-50% of ‘hard-core’ entrepreneurs/founders come from a benign or better upbringing, no?
Correct. I wasn’t trying to make the case that allentrepreneurs come from dysfunctional families, just a larger percentage than the population as a whole.
steve
“Typical Company Founders Are Married with Children and Well-Educated; Strive to Rise Above their Lower-, Middle-Class Heritage” is what the study “The Anatomy of an Entrepreneur” by the Kauffman Foundation has concluded.
Here is the url:
http://www.kauffman.org/typical-company-founders-are-married-with-children-and-well-educated-strive-to-rise-above-their-lower-middle-class-heritage.aspx
Mark,
The Kauffman Foundation does excellent work.
However it’s worth looking at page 8 of the study. In the country of birth it says 0.6% of the founders surveyed were born in China, 3.8% were born in India. That may be the case for the 549 founders they interviewed, but only 4.5% of total entrepreneurs born in China and India is not even close to what entrepreneurship in Silicon Valley looks like.
Therefore I’m not sure what to make of the rest of their conclusions.
steve
As somebody else pointed out to me recently, the empirical study of the identity of entrepreneurs has a long and dubious history:
In 1988, William Gartner writes:
“the attempt to answer the question who is an entrepreneur, which focuses on the traits and personality characteristics of entrepreneurs, will neither lead us to a definition of the entrepreneur nor help us to understand the phenomenon of entrepreneurship”
http://business2.fiu.edu/1660397/www/Session%202%20Readings/Gartner_1988_All.pdf
But the explanation for Steve’s observed discrepancy is that the Kauffman study was looking at both Silicon Valley startups and new small businesses around the country. Apples and oranges in many regards.
Steve, you do point out a possible problem with sampling.
I don’t know what number of entrepreneurs in SV are from China or from Chinese parents and likewise for Indians.
Also, the sample size isn’t up to standard either and I would be more comfortable with numbers over a thousand.
However, they do correspond to responses I’ve heard around SV. Not all seek VC funding so maybe there is difference between those that do and those that don’t.
Looks like more research is needed to get a better picture.
There’s nothing like a sparring contest in a hostile divorce, where one party does everything possible to squeeze the happiness of the other by leveraging the children’s emotions, stability and charisma. Of which the other party replies: Good to see you, and hope you are doing well (but secretly, this party is a pack mule who does not stop doing everything they can to what’s best for the family).
Why are so many people in Silicon Valley passive-aggressive?…
As a bay area native, I’ll offer that many folks around here not very direct and are uncomfortable with interpersonal tension. Especially compared with NY. (although I would love to see an actual study here) As far as valley types – native or imported…
As a fledgling founder, this post has enabled me to put alot of things into perspective. Personal and professional. Very inspiring.
“Founders as Survivors
My hypothesis is that most children are emotionally damaged by this upbringing. But a small percentage, whose brain chemistry and wiring is set for resilience, come out of this with a compulsive, relentless and tenacious drive to succeed.” couldn’t agree with you more on this.
maybe it’s because for children who went through that childhood, it’s that helpless tolerance that they had to put up in order to make it through is what sticks during their work life. It helps them shut out whats irrelevant, ignore what cannot be changed and work on a way out.
I totally agree with this hypothesis
Having come from an extremely challenging childhood survival is almost second nature
Chaos is normal everyday operating environment
It also makes me think of people who need to be hand held almost enviously of the childhood they probably enjoyed
On the plus side, I can go through a day with no outcomes or massively negative outcomes with a clear head
I take a long and fast walk in the morning with my dogs and the idea of what leadership traits come from being a survivor of childhood trauma brought me to this post. I’m getting ready to start my business and this post helps clarify many things about myself that are very affirming. 1-I’ve always been extra skilled at simplifying complexity. Chaos is okay but I always had a plan to manage it. Like someone replied above it was something normal for me and now I’m drawn to it. 2-It’s always been hard for me to be a follower. While I’ve thrived in sales roles and roles where I had free rein, I tend to burn out when I’m compelled do things someone else’s way if my gut says “don’t go that way” 3-But before knowing this gut feeling might be a réflex based more on my trauma and perhaps incomplete evidence, I became very skilled at making friends of the people around me giving me the benefit of other points of view on situations. Making friends easily started as a survival skill early on that now helps me come up with better solutions and stronger professional relationships.
I’ve gotten so many more insights Steve after reading your post. I’m encouraged now to consciously consider all of the other lessons I’ve learned from my early and difficult experiences for what I’ve gained from them and less from the opportunities I haven’t been able to make the most of because of them. Entrepreneurship is the right way for me to go. Thanks Steve!
Iam so grateful for your story. As a childline mentor and entrepeneurial myself will be interesting to see how I can circulate the story around
Dear Steve, thanks a lot for the story!
Me and all of my business partners also have this rags-to-riches stories in our backpacks.
Plus, there’s a very important notice about those hand grenades. We have a proverb that it’s better to keep founders out of the daily visiting their offices.
But the most interesting thing for me is how to provide my kids with those survival abilities, having them grown in an adequate and rich family. Will be glad to find some studies regarding this.
Have a nice day!
Just wanted to let you know that 13 years later, I’m still recommending this article to people. Such a spot-on psychological insight, and I think about it often when I’m in proximity to chaos, mine or others.