So you’re telling me there’s a chance?!
Genetics, personality traits, and entrepreneurial orientation.
The Story
Towards the end of the movie Dumb and Dumber, Jim Carrey’s character, Lloyd, finally comes face to face with Mary, the woman he has fallen in love with and driven across the country to confront. Their exchange goes like this:
LLOYD: I really like you, Mary. I like you a lot. I’m gonna ask you something flat out and I want you to answer me honestly: What do you think the chances are of a guy like you and a girl like me ending up together?
MARY: Lloyd, that’s difficult to say. I mean we hardly—
LLOYD: I asked you to be honest, Mary.
MARY: But Lloyd, I really can’t—
LLOYD: Come on, give it to me straight. I drove a long way to see you, the least you can do is level with me. What are my chances?
MARY: Not good.
LLOYD: You mean not good, like one out of a hundred?
MARY: I’d say more like one out of a million.
There is a long pause, as Lloyd looks down, dismayed, and then looks back up with a big smile and says…
LLOYD: So, you’re telling me there’s a chance?1
I met a lot of real estate developers when I worked in development during the housing boom of the 2000s, and one thing many of them had in common was that Lloyd’s last line was their favorite movie line of all time. It almost passed as code words among developers: “So you’re telling me there’s a chance?” The reason they all like this line so much is that developers are very optimistic people, and they know that about themselves and one another. Here’s the thing: Real estate developers are entrepreneurs, and entrepreneurial people share some common personality traits, just one of which is optimism.
The Theory
When I started conducting research for my book, How Real Developers Think, I drilled into a dozen discrete academic fields, but because developers are entrepreneurs, I started with the biological roots of entrepreneurial behavior. Biology means genetics, and genetics influence one’s predisposition to entrepreneurship in three areas: Activity or energy level, intelligence, and personality traits.
Activity/energy Levels: First, “activity” or “energy” levels are genetic, and people with higher energy levels who need less sleep are more predisposed to be entrepreneurs (think Tigger vs. Eeyore, from Winnie the Pooh), and people with ADHD (Attention Deficit Hyperactivity Disorder) are high energy, and are often entrepreneurs.2
Intelligence: Genetics affect intelligence, and entrepreneurs usually possess above-average intelligence as measured by IQ. But there are other types of intelligence. Emotional Intelligence, or EQ, includes cognitive skills such as self-control, willpower, and delayed gratification as measured by the famous “marshmallow test” (check out the videos on YouTube), and SQ measures social intelligence. “Success Intelligence” is a holistic approach that combines physical, intellectual, emotional, and spiritual intelligence to create a fulfilling life. While all forms of intelligence are helpful, in entrepreneurship, some studies have found that high-IQ people with less education are more successful entrepreneurs than less intelligent but more educated people. In other words, raw intelligence trumps book smarts when it comes to making the connections required to identify and exploit opportunities. There are also correlations between intelligence and ADHD, Dyslexia, and Autism Spectrum Disorder, a subject I’ll explore further in a future episode about neurodivergence and entrepreneurship. Suffice it to say that many developers joke about having ADHD, probably because many of them do.3
Personality Traits: People predisposed to entrepreneurship share certain personality traits, which can be assessed using different models. A well-known general model is the “OCEAN Five” or “Big Five” psychological model of personality traits, where the acronym OCEAN stands for Openness to new experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism. Each of us ranks low or high on these traits, but entrepreneurs generally score high on Openness to new experience and Conscientiousness; are neutral on Extraversion; and score low on Agreeableness and Neuroticism. In other words, they are always willing to try new things (O), they have the drive to get things done and sweat the details (C), they do not need to be liked and therefore have no trouble driving a hard bargain (A), and they are emotionally and psychologically stable, which is helpful when engaging in risky ventures with ups and downs (N). Generally, Extraversion (E) is less important when it comes to generating ideas, but it does matter when it comes to selling those ideas, as well as the final product, both of which all developers must do all the time, so I suspect most developers score higher on extraversion than the average entrepreneur.4
Another model that is focused more specifically on entrepreneurial behavior is the Measure of Entrepreneurial Talents and Abilities, or “META,” a self-report scale of 44 items that measures personality traits on four dimensions: Proactivity, creativity, opportunism, and vision. On this scale, entrepreneurs score highly in their ability to start and complete projects; generate innovative business ideas; remain alert and informed, detect future trends, and identify new opportunities; and see the bigger picture and drive change and progress.5
A third model is called the Battery for the Evaluation of the Entrepreneurial Personality, or the “BEPE Battery.” This is a questionnaire which evaluates the eight specific personality dimensions identified in the literature as the most promising when characterizing entrepreneurial personality: Self-efficacy, Autonomy, Innovativeness, Internal locus of control, Achievement motivation, Optimism, Stress tolerance, and Risk-taking. Entrepreneurial people typically score high on all eight of these dimensions.6
The META scale and BEPE battery incorporate traits that are more specific to entrepreneurship, and indeed, studies that combine the OCEAN Five with either or both of these scales lead to more accurate predictions of “entrepreneurial orientation” or “EO.” After interviewing several hundred developers myself, I can confirm that these are relevant scales and measures that accurately reflect the developer personality, so what follows is my own developer profile:
Most real estate developers I have met and talked with possess high energy levels and need less sleep than other people. They use that energy to propel their projects, themselves, and other people forward. All of the developers I have ever met are highly intelligent. On the OCEAN Five, developers score high on Openness to new experience, which correlates with imaginativeness, as demonstrated by one developer who said to me, “Never be afraid to ask the question.” They also score high on Conscientiousness, which correlates with being organized, and reminds me of a different developer who repeated Woodrow Wilson’s mantra that, “Persistence and determination are omnipotent.” And they score high on Extraversion, which correlates with being outgoing, and reminds me of yet another developer who told me that you have to keep talking to people because “while a person may say ‘no’ at first, sometimes ‘no’ really means ‘maybe’ and even ‘yes.’” Developers score low on agreeableness, which is helpful when they have to play hardball in business dealings. Think of the oily boss in the movie Office Space, saying, “Yeah, about that…you’re fired.” Finally, they also score low on neuroticism. When I interviewed over 60 developers in 2010, in the wake of the great financial crisis, many were in financial difficulty and had lost or were at risk of losing properties to foreclosure, yet most told me, unprompted, “I sleep like a baby every night.” Personally, I would be throwing up.7
On the META scale, developers score high on the four measures of proactivity, creativity, opportunism, and vision. With their high energy levels, they are quick to identify and get in front of trends, and they are very creative when it comes to developing and promoting ideas to a wide variety of people whose support they need. They have an eye for lucrative opportunities and are quick to seize and exploit them, and they are good at developing grand, long-range visions, which they have the confidence and perseverance to realize over long time frames.
And when it comes to the BEPE battery, developers score high on all eight measures, but I’ll focus on just three here: Internal locus of control, risk tolerance, and optimism. People with a high internal locus of control are confident that they can transform their visions into reality and that they control what they do and the outcomes of their work. People with a high external locus of control, however, believe that outcomes are driven by luck and fate, that things happen to them, and they have little control over their lives and have to make do. Developers have a very high internal locus of control, as evidenced by one who told me, “My parents taught me that I could do anything I want to.” Most people overvalue downside risk, an instinct that comes from our time on the savannah, 10,000 years ago, when overvaluing downside risk meant living another day rather than being eaten by a lion. Entrepreneurial people, however, see risk as simple math with upsides and downsides of the same value, but they are also very good at managing downside risk. One developer told me, “I take risks, yes, but not stupid risks.” Last but not least, developers are optimistic and often overly optimistic. One study showed that entrepreneurs (think, developers) are often overly optimistic about the value of the opportunities they discover, and that they think their chances of success are higher, and even higher than their competitors’. Which brings us back to Lloyd, and “So, you’re telling me there’s a chance?”8
The Lesson
Entrepreneurial developers can be brilliant, charming, and persuasive, if sometimes challenging to work with, but they are all amazingly creative. One colleague described his developer boss as having the ability to stand inside a vacant, dilapidated old building and see through the mess and the daylight shining through holes in the roof to notice that it has “great bones” and that he could “see what it can be.” Another colleague talked about her developer boss who, “had lots of drawings and renderings of grand plans and visions that seemed completely unrealistic and far-fetched, but that after five years, they had all, amazingly, become reality.” That kind of ability to envision something and then make the vision real takes a certain kind of creativity and determination that not everybody has. Think about the enterprising people you know, and you can begin to see how genetics plays a role in “entrepreneurial orientation,” or “EO.” And if you know or work with developers, I suspect that many of the words and concepts above feel very familiar to you.
“Success is walking from failure to failure with no loss of enthusiasm.”
- Winston Churchill
The People who are crazy enough to think they can change the world are the ones who do.
- Steve Jobs
Being an entrepreneur is easy. It’s like riding a bike. Except the bike is on fire. You’re on fire. Everything is on fire.
- Anon.
Farrelly, Peter, Bobby Farrelly, and Bennett Yellin, Dumb and Dumber, Script, November 1993.
Shane, Scott, Born Entrepreneurs, Born Leaders: How Your Genes Affect Your Work Life, New York: Oxford University Press, 2010, pages 151-168.
Ibid.
Leutner, Franziska, Gorkan Ahmetoglu, Reece Akhtar, and Tomas Chamorro-Premuzic, “The relationship between entrepreneurial personality and the Big Five personality traits,” in Personality and Individual Differences, 63 (2014) 58-63.
Ibid.; Pekkala Kerr, Sari, William R. Kerr, Tina Xu, “Personality Traits of Entrepreneurs: A Review of Recent Literature,” Working Paper 18-047, November 2017.
Ibid.; Cuesta, Marcelino, Javier Suárez Álvarez, Luis M. Lozano, Eduardo Garcia-Cueto, and José Muñiz, “Assessment of Eight Entrepreneurial Personality Dimensions: Validity Evidence of the BEPE Battery, in Frontiers in Psychology, November 2018, Volume 9, Article 2352.
Brown, Peter Hendee, How Real Estate Developers Think: Design, Profits, and Community, Philadelphia: Penn Press, 2015.
Ibid.