Why Are Entrepreneurs Prone to Bad Behavior? They're Wired That Way

The Psychology of Entrepreneurial Naughtiness

Not a news cycle seems to pass without tales of founders behaving badly.

In the past month alone, OpenAI's CEO turned former-CEO turned reinstated CEO, Sam Altman, was temporarily axed for being "not consistently candid" with the board. WeWork Founder Adam Neumann was blasted for his take the money and run strategy following WeWork's bankruptcy. FTX founder Sam Bankman-Fried was ticketed with a century of jail time for his fraudulent schemes concocted in the name of existentially-friendly 'effective altruism.' Binance Founder and now former-CEO, Changpeng Zhao, will pay a sweet $50 million dollar fine for his fast and loose interpretation of money laundering laws. And Elon Musk continues to do, well, whatever Elon wants.

(It's been a slow month for female entrepreneurs, but they are far from excluded. See here and here and here.)

It should go without saying: Entrepreneurs who engage in illegal activity should be held fully accountable. But for the most part, founder offenses fall below the line of criminality, hovering around the status of 'was that really necessary?' From emotional outbursts to impulsive decisions to impractical visions, the vast majority of founders are not fraudsters or scoundrels, but are instead easily moved by the whims of their own intense and peculiar personalities. They are, in a way, victims of the same wiring that made them entrepreneurs in the first place.

So, why do entrepreneurs seem to be naughtier than most? To uncover the answer, we have examine their genes — or more specifically, their dopamine genes.

Entrepreneurs are wired with dopaminergic minds. In other words, their brains need more intensity to feel a baseline level of aliveness. Entrepreneurs are more likely to have dopamine receptor gene variants that are tied to sensation-seeking, the tendency to seek out newness, intensity, risk, and thrill (1). This means entrepreneurship is a path to their own humanity — it's a one way ticket to stimulation town: There's risk! There's freshness! There are big checks! Well, there could be. The tradeoff of the entrepreneurial life is risk-bearing in the pursuit of novelty — and for many founders, they wouldn't have it any other way.

(Side note: This sensation-seeking is also why so many entrepreneurs gravitate towards things like Burning Man, base jumping, and combustible rocket ships.)

This means that individuals with dopamine receptor gene variants are more likely to self-select into entrepreneurship in the first place. Like a moth to a flame, those reward hungry brains gravitate toward the thrill of new venture creation, enchanted by the promise that no two days will be alike. Once they enter the entrepreneurial arena, they often find themselves armed with an inborn adaptive advantage of greater risk tolerance (and sometimes even risk preference) and ambiguity tolerance than their neurotypical peers, allowing them to shock-absorb speed bumps that might toss others off the road.

But this fortified wiring is not without its liabilities. The same genes that urge entrepreneurs to seek out risk and excitement also come with a supreme potential for naughtiness, including impulsivity, disorganization, distraction, recklessness, emotional dysregulation, addiction, flakiness, selfishness, Peter Pan-like behaviors, a never-good-enough approach, and a move-fast-and-break-things mentality. All of a sudden the news headlines come into view, featuring the too-big risks, too-short tempers, or too-childish behavior.

Thus, the assumption that founder naughtiness is the pure result of greed or malice is superficial at best. Sure, most founders want money or attention, like the rest of us. The difference is that their brains don't perceive more as enough — a tendency that we both celebrate and condemn them for. On one hand, this wiring allows them to build impossible things with the pace of a racehorse and at a scale that can be difficult to fathom. On the other hand, they often lack the governor that limits their top speed, occasionally resulting in full force forays off cliffs.

It should be restated: I'm not trying to justify bad behavior, especially not illegal behavior, nor am I suggesting that entrepreneurs deserve a get of out jail free card for being 'wired this way.' There's a fine line between criminality and precariously creative problem solving, and I'm not condoning entrepreneurs who exaggeratedly tumble over that marker. To this end, I agree that true felons, like Sam Bankman-Fried, deserve a lifetime of green beans on a cafeteria bench.

Instead, I wish to spotlight the fact that entrepreneurial naughtiness is inextricably linked — within reason — to their greatest potential. The very qualities that Forbes, Fortune, and Inc love to glamorize on their cover features are a sneeze away from their more shadowy counterparts. This sends admittedly conflicting signals to those in the entrepreneurial ecosystem: Be bold, but not reckless. Be visionary, but not idealistic. Be confident, but not arrogant. Be opportunistic, but not manipulative. Be disruptive, but not brash. Be curious, but not distracted.

At the end of the day, we must admit that our own fascination with entrepreneurs isn't due to of our bleeding love of cap tables or coding, but because they possess extreme qualities that can be combustibly powerful. We admire them, we gawk at them, we gossip about them — and maybe, we are them. When starting something from nothing, a bit of foxlike cleverness, hopeful beer goggles, and prickly grit will always be necessary. For entrepreneurs, this leads to the ultimate question: Do I know where the line is and just how close am I willing to get...?

1. Nicolaou, N., Shane, S., Adi, G., Mangino, M., & Harris, J. (2011). A polymorphism associated with entrepreneurship: evidence from dopamine receptor candidate genes. Small Business Economics, 36, 151-155.