For the last 15 years, we’ve been exploring what makes a strong entrepreneur, how to be an exceptional co-founder, and why psychology affects critical stages of a startup journey, such as fundraising, hiring, pivoting, etc. And when companies sometimes go down, the reason again lies within the characters of their founders. Besides showcasing positive traits for growing a business, our Entrepreneur DNA assessment reveals the possible traps. 

Based on comprehensive research encompassing 175,000 entrepreneurs, the Founder Institute has detected certain attitudes that can pose a serious risk to a startup's stability. Often rooted in less-than-ideal personality traits, these attitudes can, if left unchecked, lead to self-sabotage and even company failure.

In this blog, we will review five ways in which founders might unwittingly allow their weaker traits to steer their businesses off course. Afterward, we will share our recommendations for avoiding these pitfalls and harnessing your strengths to benefit your startup.

When Entrepreneur DNA Is Destructive

A startup founder's personality can shift from being constructive to destructive. In our research, we've identified 26 traits that define entrepreneurship. Each trait has its spectrum and can influence entrepreneurial success positively or negatively.

Regrettably, underdeveloped (or sometimes overdeveloped) traits can hinder a startup's growth. They can blend together and negatively affect a founder's behavior. Here are five worst-case scenarios we've seen, examples of which are publicly known.

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1. Excuse-making: Avoiding responsibility and blaming external factors for failures.

You don’t have to be an entrepreneur to know that making excuses is a sign of insecurity that is damaging to interactions with others. If a startup founder is continually in opposition and attributes problems to others, it leads to unnecessary conflicts.

Case study: Drew Houston, Dropbox's co-founder and CEO, has shared his experience with overcoming excuse-making and how this shift was crucial for his personal growth and professional success. Particularly during a 2013 MIT commencement speech, he reflected on the threat of waiting for the "perfect time" to act, acknowledging it as a form of excuse-making that delayed his start on Dropbox. Houston's journey underscores the importance of self-discipline and initiative for entrepreneurs.

2. Predatory aggressiveness: Damaging relationships with employees, partners, and customers.

There’s a misconception that entrepreneurs should forge ahead like bulldozers, stepping on others and eliminating everything standing in their way. In reality, such harsh behavior results in more trouble and contributes to a toxic environment.

Case study: Martin Shkreli, also known as "Pharma Bro," was widely criticized for what many saw as predatory aggressiveness and deceit. After acquiring the manufacturing license for the antiparasitic drug Daraprim, Turing Pharmaceuticals, under Shkreli's direction, raised the price of the drug by more than 5,000 percent overnight. Shkreli's actions ais unapologetic public defense of the price hike sparked a national debate on drug pricing and pharmaceutical ethics. 

3. Deceit: Eroding trust within the team and with external stakeholders.

Deceptive founders don't always have ill intentions. Many believe in their false statements or hope that everything will soon fall into place.

Case study: Elizabeth Holmes, the founder of Theranos, became infamous for deceit, among other issues. Holmes and her company made false claims about the capabilities of their health technology, leading to one of the biggest frauds in Silicon Valley. The stark discrepancy between what was promised and what was delivered not only corrupted trust among investors, partners, and the public but also raised serious ethical and legal questions. 

4. Emotional instability: Leads to poor decision-making and unpredictable leadership.

Emotions should not be suppressed or blown out of proportion. In entrepreneurship, emotional control skills have to be acquired fast, or the founder’s mental health and their venture’s future can be at stake.

Case study: Sheryl O’Loughlin, former CEO of Clif Bar and co-founder of Plum Organics, shared her struggles with an eating disorder and the challenges of balancing work and family life in her book "Killing It!" She discusses the emotional toll of entrepreneurship and the importance of maintaining emotional and physical health.

5. Narcissism: Focusing on self-interest over the company's well-being.

Research shows narcissism can be good for the initial state but is not a significator for success. One study found that narcissistic entrepreneurs are less likely to learn from business failures. In other words, they can be utterly oblivious to their circumstances and surroundings.

Case study: Dan Price, the CEO of Gravity Payments, hasn't directly labeled himself a narcissist but has been open about his journey toward identifying and correcting what he saw as selfish and ego-driven decisions early in his career.

Which Personality Types Have Bad DNA?

Previously, we’ve examined different personality types’ communication styles and how they can play out within a startup. However, no features are inherently 'good' or 'bad'.

For example, the Entrepreneur DNA Assessment recognizes nine different entrepreneur profiles, each with its pros and cons. Whether an individual will refine their character or become a less positive representation of their profile is entirely up to them. Thus, there is no direct correlation between a specific personality type and bad founder DNA. The tendency of each profile to cling to detrimental habits is individual. 

Strategies for Improvement and Avoiding Self-Sabotage 

Unfortunately, it's common to act against one's interests. In the rush of building a startup, founders can lose their way. And yet, as shown in Rand Fishkin’s book ‘‘Lost and Founder’’, they can also find their way back. Nonetheless, prevention is better, and it requires self-awareness to identify one's own tendencies toward negative traits.

In addition, seeking feedback and mentorship can provide reality checks and guidance. An upgraded perspective nurtures emotional intelligence, which can be honed through practicing simple on-site and off-site techniques.

Lastly, improvement should not be a solitary effort. It should be shared with the team, fostering a culture of accountability. Business ethics and integrity serve as another compass for a founder, building trust and credibility through honest and ethical behavior.

Getting absorbed into a powerful vision, goals, and desire for triumph is a road anyone can slip on. The most dangerous part of deviation is to do it blindly and without realizing it. Therefore, reflection and self-assessment are the best protection. Moreover, there’s always room for improvement as long as a person is willing to make the effort. 

If you want to know the traits that make you unique, including your biggest advantages and your low points, you can complete Founder Institute’s Entrepreneur DNA Assessment for free.

In case you’re interested in going further, we also offer an in-depth analysis of all 26 traits with commentary on their levels. With the full DNA report you also get a personalized action plan that focuses on your strengths and tactics for minimizing your weaknesses.

Learn more about the Entrepreneur DNA test 

The Founder Institute is the world’s most proven network to turn ideas into fundable startups, and startups into global businesses. Since 2009, our highly-structured accelerator programs have helped entrepreneurs raised over $1.75BN in funding across over 200 cities worldwide.

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