Why You’re A Startup Founder: Nature And Nurture

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Editor’s note: Pokin Yeung founded two startups, GeckoGo and Askomatics, and is currently blogging and helping out various other startups. Follow her on Twitter @pokin.

Just over a month ago, a random conversation with another startup founder over lunch turned into a full-blown research project.

“You and I are both first-born children,” I mused to my friend, “I wonder if that had any influence on why we chose to start businesses.”

I theorized that first borns were often given more responsibility growing up, and wondered if this role served as training wheels for building startups. I also wondered if our upbringing had an influence on things like when we start, what we start, or how much money we raise — and ultimately, how successful we are with our businesses.

Four weeks, a survey of 318 founders, and a lot of data-crunching later, here are my conclusions:

Family Matters

  1. Your birth order does influence the likelihood you will be a founder.
    If you’re a first-born, you are more likely to be a founder — 55 percent more likely than the population distribution. Just under half (46 percent) of our founders were first-born children, and I fit into this category. If you come from a two-child family, this effect is larger. You’re 63 percent more likely to be a founder than the second born child.
  2. If you’re female, this effect is huge.
    Female first-borns are 118 percent more likely than second-born females to be founders if they come from a two-child family. I fit into this category, too. Maybe the capricious nature of sibling relationships combined with the leadership (read: guess-who’s-in-trouble-if-something-happens-to baby-sis) role gives us more comfort in the rock-and-roll world of starting companies.
  3. Second-born children are slightly more likely than the general population to be founders, but beyond that the chances actually decrease.
  4. Third-born or later children are 52 percent less likely to be a founder.
  5. Only children are underrepresented, and it’s statistically significant. Only children have been described as “First Borns on Steroids.” They are typically more likely to become CEOs and be hyper-achievement oriented.  Yet they are underrepresented in our study. Could it be that only children prefer to rule larger, more established companies?  Or is it something about the uncertain dynamic of having siblings to fight with that gives first borns the skills and motivation to take the leap?
  6. There is no correlation between your birth order and your chance of raising money or having a successful exit.

Startups run in the family

The data suggest that your parents can shape your inclination to become a founder – especially if your mom was an entrepreneur and you’re a girl. Female entrepreneurs are 1.4 times more likely to have a mom who was also a founder. Over 50 percent of our founders surveyed have a parent who had also started a business, and 14% of respondents have a brother or sister who’s taken the leap. So it seems having a good role model matters — especially for females. Organizations like Women 2.0 are a good start, and more access to mentorship programs during the formative years could make a big difference in bringing more female founders into play.

Higher education or trial by fire?

Startup founders have to do a lot of multi-tasking, but two things that don’t seem to mix are school and startups. Most founders tend to wait till school is done before starting their first business. In general, by the time founders are 25

  • 74 percent of you had started a business if you didn’t have a college degree.
  • 55 percent if you had a bachelor’s degree.
  • 24 percent if you had a graduate degree.

Also, 50 percent of you waited till after 30 to start your first business if you had a graduate degree.

How else do you compare against the population? For starters, you overachieve.

Startup founders in general tend to overachieve. You are 6.4 times more likely to have skipped a grade, and 6 times more likely to start some sort of business endeavor (selling candies, anyone?) while still in school. Across the board, startup founders are more likely to more likely to do things like play sports, play a musical instrument, or hold a part-time job while still in high school. Maybe it’s a desire for learning, general well-roundedness and drive for growth that creates the motivations for founders to strike out on their own? Or maybe it’s a curiosity about the world. Lots of potential theories and areas of further research.

So what next?

The specific circumstances that push founders to take the leap definitely involves more than the sequence in which founders arrive to their families, but it does seem clear that once you become a founder, you stand to quite strongly influence future generations to come.

There were other interesting areas of research, including the types of adversity faced by startup founders growing up, and it’s what I want to dig into next. If anyone is interested who didn’t participate in my study before, I’d love to ask you some questions here.

startup-birthorder-infographic

[top image via flickr/sdminor81]