Success for a startup is easy enough to measure, but when it comes to entrepreneurs, what determines who will fail and who will succeed? The Founder Institute uses a personality-based test to measure the potential success of aspiring entrepreneurs. CNNMoney.com posted the results of their findings as told by Aaron Patzer, Founder of Mint.com who guest lectures at the institute.
The Founder Institute is a four-month training program for entrepreneurs designed to groom the next generation of technology industry leaders. There are locations in Silicon Valley, San Diego, New York, Boston, Houston, Brussels, Berlin, Paris, and Singapore.
To predict which students will be most successful in their program, the school administers a one-hour test graded on a scale of 0 to 5 that measures intelligence, aptitude, and the “Big Five” traits that psychologists use to profile personality types, which include conscientiousness, agreeableness, neuroticism, openness and extroversion.
The school then tracks the accuracy of the results. During the course of their studies the students grade each others’ business ideas on a scale of 1 to 5 and these scores are matched against the initial aptitude test. At graduation, the students who have already launched their businesses rank higher than those who haven’t. The school administrators also follow up with their alumni every six months to a year to track their milestones, such as selling a startup to a larger company.
After compiling the data, the institute found that the following traits had the most influence in determining which of its students would be most successful:
- Fluid Intelligence
Openness implies a willingness to try new things, while fluid intelligence refers to the ability to quickly assimilate new information. Although the age range in question was not specified, the study found that students with more life experience were more likely to follow through with projects. The study also revealed that previously considered factors, such as IQ, were not good indicators of success.
Because we are in the business of profiling startup companies, we had to wonder how entrepreneurs who are currently making the headlines would measure up using these criteria.
When it comes to tech startups, the most puzzling indicator on the Founder Institute’s list is age. Mark Zuckerberg created Facebook in his dorm room at Harvard in 2004 and by 2007 TechCrunch reported that his company was worth 15 billion dollars. Foursquare‘s Dennis Crowley might also lose points for having been named one of the “Top 35 Innovators Under 35” by MIT’s Technology Review magazine in 2005. So much for maturity.
Which entrepreneurs over 35 are staying competitive in the digital age? Of the entrepreneurs we’ve profiled in recent weeks, the one who came to mind was Tim Niedel, CEO of a charitable group discount site that’s still in Beta testing called MyEZDeal.com.
This entrepreneur went from manufacturing spray tanning booths at Magic Tan to entering the relatively new market of selling coupons for local services online. Without a technical background, Niedel used his judgment from working in the advertising industry to jump on a business model that seemed to be working for other sites like Groupon and added his own spin by donating some of the proceeds to charity. If the Founder Institute’s principles are correct, Niedel is an entrepreneur to watch.