Younger siblings are born to build

First published in the Financial Times on 2nd April 2013.

Later-born children often possess a flexibility that helps them to create a start-up

I met an entrepreneurial headmistress recently. A few years ago she was appointed to rescue a failing school, which suffered chronic problems with pupil discipline. On her first day she shut the doors and asked every teacher to identify the worst offenders. They provided 72 names. She excluded every disruptive teenager, saying they would not be readmitted until she had met them and their parents for individual sessions in her study. Over the coming days she saw each one and in time almost all returned to finish their education. Meanwhile, the atmosphere in the school improved radically.

The really interesting aspect of her dramatic actions was that they broke all the rules. She had to ignore the system to fix the mess. Her methods were tough and unorthodox but highly effective. The school is now far improved and she has been feted.

Of course, complete rejection of all authority can lead to prison. There is sometimes a fine line between being an independent spirit and a criminal. A recent study at UC Berkeley Haas School of Business suggests that many successful entrepreneurs share a history of getting into trouble as teenagers. I know of two billionaires who were expelled from school. Clashing with institutions – big companies, government, schools – is almost expected of self-made men and women. The need for autonomy is a compulsion among business founders – they have to build their own structures rather than fit in with someone else’s.

A man who has consistently rejected external controls is Craig Venter, a scientist-entrepreneur. He made his name as a key promoter of the Human Genome Project and founded two companies, Celera Genomics and Synthetic Genomics. He says: “In my case, a rebellious attitude has probably been the most beneficial, although painful at times, trait in my life.” He has fallen out with various partners and organisations but his achievements are undeniable. He typifies the outsider who is also the pioneer, a loner who can be more innovative because he refuses to conform.

Innovators need to challenge the established order; they cannot simply follow existing pathways. Society benefits from such invention even if it generates upheaval. It counteracts the tendency for big companies to become resistant to change. As George Bernard Shaw wrote in Maxims for Revolutionists: “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends upon the unreasonable man.”

I have long believed that birth order is a factor in determining whether someone becomes an entrepreneur. Firstborn children tend to be more confident and perform best academically. They make classic authoritarian leaders and do well as executives in hierarchical organisations and in highly structured careers. They are used to taking responsibility, conforming to expectations, giving orders and getting special attention from their parents. They are more likely to be conscientious and prefer the status quo.

But I believe they are less likely to be entrepreneurs, save if there is a family business to run.

Later-born children tend to have more freedom. They are left to their own devices because parents, by then, have become more relaxed about bringing up their offspring. There is less pressure on them to be the perfect son or daughter. They are likely to be more creative, more enthusiastic risk-takers but do less well in school. They often possess a flexibility and independence that helps them build a start-up. They are perhaps less interested in status and rank. Often, there is less weight of promise on their shoulders – that is generally borne by the eldest child. Younger siblings are free to pursue adventures. These characteristics are advantageous to the entrepreneur.

Yet many entrepreneurs are also insecure. Part of why they strive is because they seek praise and attention. Possibly they are saying “Look at me Mummy/Daddy!” even as adults. Most have had to compete for affection with siblings who are typically bigger and more mature in the early years.

My amateur studies among entrepreneurs suggest a majority of them were not first-born – perhaps because they feel more comfortable being a maverick, working without many restraints. I always felt that myself, as a third-born son. Of course, there are degrees of rule-breaking. Complete anarchists do not become entrepreneurs – their energy is too destructive. Indeed, successful enterprise relies on a proper system of laws and ownership of property. But it needs challengers too.