In preparation for writing his latest book, Rainer Zitelmann interviewed 45 ultra-high-net-worth individuals, most of whom are self-made entrepreneurs.
He spoke with each of them for between one and two hours. In addition, they completed a personality test with 50 questions.
Here is a selection of the key findings from his recently published book, The Wealth Elite (http://the-wealth-elite.com/):
Education and extracurricular activitie
The Major Personality Traits of Successful Entrepreneurs
In terms of their later success as entrepreneurs, the interviewees’ formal education at school and university was by no meansa determining factor
Although a majority did benefit from good school and university educations, this didn’t set them apart from their peers.
In any case, their academic performances were usually no better than average. So education is not one of the personality traits of successful entrepreneurs.
Of far greater importance were their activities outside of school. Thus co-curricular adds to the personality traits of successful entrepreneurs.
More than half were involved in competitive sports as students. These can be taken as most dominant personality traits of successful entrepreneurs.
As competitive athletes, they learned to deal with victories and defeats and to assert themselves against rivals and competitors. This added to the list of personality traits of successful entrepreneurs.
They developed a tolerance for frustration and self-confidence in their own abilities.
Early entrepreneurial experiences adding to the personality traits of successful entrepreneurs.
Side Income: Personality Traits of Successful Entrepreneurs
Typical student jobs, in which young people work for an hourly wage, were the absolute exception.
Looking at their many ideas and ventures, it becomes clear just how creative they were. Thus creativity can be taken as one of the important personality traits of successful entrepreneurs.
They sold everything from cosmetics to home winter gardens, from used wheel rims to car washes, from used cars and motorcycles to insurance policies and real estate investment products, from animals they raised themselves to rings, from homemade radios to second-hand car radios. They knew the art of business along with other important personality traits of successful entrepreneurs.
These experiences were clearly formative for the young people who later became entrepreneurs, i.e paving ways for the personality traits of successful entrepreneurs.
Personality Traits Of Successful Entrepreneurs: On The Way To Stardom
They learned to organize, to sell and to think like entrepreneurs. Thus developed the personality traits of successful entrepreneurs.
They learned – often unconsciously – and acquired the implicit knowledge which is one of the important personality traits of successful entrepreneur and investors.
These early entrepreneurial experiences were the best preparation for their later independence.
The research hypothesis that entrepreneurs are “misfits”, I mean difficult and rebellious employees who could not have climbed the career ladder within an established company, was confirmed for a number of the interviewees.
They view themselves as difficult individuals, too non-conformist to submit to existing structures or other people. In other words, they set their own personality traits of successful entrepreneurs.
This non-conformity was often evident as early as their schooldays, typical personality traits of successful entrepreneurs.
Many reported huge conflicts with authorities, especially with their teachers. But, in addition to this group, there are others to whom this does not apply.
This second group had worked in large companies and risen up the ranks.
However, the pace at which their careers developed was too slow for them, or they felt that their earning potential was too low. Yet another landmark personality traits of successful entrepreneurs.
In modern entrepreneurial research, the ability to sell has been largely underestimated as a factor in achieving economic success.
However, there is almost no other point upon which the interviewees agreed so much: sales skills have contributed significantly to their success – regardless of the industries in which they have made their fortunes.
Two-thirds of the interviewees stated that the ability to sell successfully was a key factor in their success. All the successful business personnel have that making it another important personality traits of successful entrepreneurs.
Optimism and risk-orientation
In response to the interview questions, almost all of the interviewees agreed that they were extremely optimistic.
On a scale from -5 (extreme pessimist) to +5 (extreme optimist), 38 out of 40 respondents ranked themselves in the positive range, i.e. as optimists.
This included 35 who went as far as to rank themselves in the extremely optimistic range of +3 to +5.
But what do the interviewees mean by optimism?
It became clear that what they mean by optimism is the same as what psychologists call self-efficacy.
In their own words, the interviewees defined optimism as the belief that “as a result of your own abilities, or the network you have built, or your intellect, you are always able to identify solutions and to overcome anything”.
Extensive research has been carried out to investigate the risk orientation of entrepreneurs and the rich.
Some researchers have come to the conclusion that a high level of risk propensity is positively correlated with successful entrepreneurship and wealth,
Others have concluded that a moderate risk profile is characteristic of entrepreneurs. In all, the level of confidence to deal with risks is one of the major personality traits of successful entrepreneurs.
While others have argued that, although entrepreneurs’ actions are objectively risky, they do not subjectively perceive them to be risky. This is one of the very common personality traits of successful entrepreneurs.
The hypothesis that many entrepreneurs have only a moderate risk profile was not confirmed by the interviews.
Most of the interviewees rated their own risk profiles as very high.
This changes during the wealth consolidation phases, when risk profiles decrease.
It is at this stage that the hypothesis of moderate risk does apply.
The hypothesis that entrepreneurs and the rich take objectively higher risks but did not subjectively perceive them as such was not altogether confirmed by the interviews.
Most interviewees were well aware of their very high risk profiles. Thus risk-taking is yet another personality traits of successful entrepreneurs.
The importance of implicit learning and gut feeling
The hypothesis that the entrepreneurs more often than not base their decisions on “gut feeling” was confirmed by the interviews. Thus making the gut feeling one of the important personality traits of successful entrepreneurs.
Of the 45 interviewees, 24 stated that gut decisions dominated, 15 said their decisions were primarily analytical, and six said their decisions were 50/50 or they could not clearly say one way or the other.
However, gut feeling, as many interviewees stressed, is not something you are born with: it develops as the sum of life experiences. In that light, experience also becomes one of the important personality traits of successful entrepreneurs.
This corresponds to the theory that gut feeling is the product of implicit learning – flashes of insight will appear in a fraction of a second, triggered by the recognition of a pattern, an awareness that is, in turn, the result of many years of collected experiences.
This implicit knowledge, which is the result of implicit learning, is what manifests itself in gut decisions.
It is therefore not surprising that educational qualifications are not the key factor for their entrepreneurial success.
The interviewees did not acquire their implicit knowledge, which later manifests itself in gut feeling, from the processes of formal learning, but from informal learning situations, for example in competitive sports or early entrepreneurial activities while they were at school or university.
“Big Five” personality traits
Each of the interviewees completed a Big Five personality test with 50 questions.
The key findings were as follows:
Conscientiousness was the most pronounced personality trait.
In the Big Five theory, conscientiousness not only refers to what we might normally associate with this term (i.e. a sense of duty and thoroughness), but also means diligence, discipline, ambition, goal-orientation and perseverance.
Extroversion was also widespread among the interviewees, although less so than conscientiousness.
Of the interviewees, 29 of 43 have high levels of extroversion, describing themselves as extremely optimistic people who preferred to go their own way.
Openness to experience was also very widespread with 28 of the 43 interviewees very open to new experiences.
Neuroticism was very low among the interviewees.
The hypothesis in entrepreneurship research that entrepreneurs are less agreeable was only partly confirmed.
According to the Big Five test, agreeableness was far less pronounced than conscientiousness, openness to new experience and extroversion.
Nevertheless, according to the test results, a majority of the interviewees did demonstrate higher levels of agreeableness.
However, there were doubts as to whether the test’s questions were able to sufficiently differentiate between more conflict-oriented and more harmony-oriented personalities in business life.
The results of the tests were therefore compared with the evaluation of the personal interviews.
Taking the individuals deemed to be conflict-oriented by the test, together with the interviewees deemed to be average or highly agreeable, but who described themselves as conflict-oriented in the interviews, the following findings emerge:
Half of the 43 interviewees who took the test showed a tendency to low agreeableness and can therefore be classed as more conflict-oriented, seven had average levels of agreeableness and 14 exhibited high agreeableness.
For many of the interviewees, their willingness to engage in conflict corresponds to the fact that they are contrarians and enjoy opposing majority opinions and swimming against the stream with their investment and entrepreneurial decisions.
Few of the Big Five personality test’s 50 questions got such as positive response from the interviewees as the statement “I would describe myself as someone who prefers to forge my own path”.
The majority of the interviewees – especially the investors – attributed much of their financial success to their ability to swim against the stream.
Dealing with setbacks
Almost all of the entrepreneurs and investors reported serious setbacks and crises, some of which were extremely serious.
How did they react? According to the findings of entrepreneurship research, “action orientation after failure” is a key entrepreneurial personality trait.
The interviewees revealed that their specific approaches to dealing with setbacks and crises is an important factor in their success and a unifying characteristic.
First of all, many interviewees stated that they remained extremely calm during serious crises.
Some reported sleepless nights, but a majority of the interviewees emphasized that even in the most serious crises they were able to sleep peacefully and that they could “switch off”.
In addition, it is striking that the interviewees demonstrated a fundamental attitude of not blaming external circumstances or other people for setbacks and crises but looked for the cause of the problems they were facing in themselves.
The interviewees never saw themselves as victims of circumstances or of the actions of their rivals; they always took personal responsibility for any problems.
Nor did they use negative market developments as an excuse for their difficulties; they blamed themselves for misjudging the market.
In their crises, they did not just focus on solving the problem and restoring the status quo – they tried to turn setbacks into opportunities.
They repeatedly reported how their crises and setbacks only served to make them even more successful.
Entrepreneurs explained that the growth of their companies, the conquest of new markets, the decisive improvements to their corporate strategies and products were only achieved in response to severe setbacks and crises.
One quality that the interviewees all shared is that they are able to “get over” negative experiences very quickly.
To put it simply, they never struggled with the things that they could not change anyway, they focused instead only on practical ways to overcome their crises.
Dr. Rainer Zitelmann is a German historian and sociologist.
In the late 1980s and early 1990s, he worked as a research assistant at the Central Institute for Social Science Research at the Free University in Berlin.
He then went on to head the real estate section of the major German daily newspaper Die Welt.
He became a self-employed entrepreneur in 2000 and was the owner of Germany’s leading communications consultancy for real estate companies until 2016.
He is also a successful real estate investor.
Zitelmann has written and published 21 books that have been translated into many languages worldwide and are particularly successful in Asia.
His latest book, The Wealth Elite, is based on 45 detailed interviews and is the first qualitative sociological study into the personality traits of ultra-high-net-worth individuals.