Research shows that the way in which entrepreneurial team members work together plays an important role in determining venture outcomes. But does passion always lead to great teamwork? Is it the more passion the better? What happens if one team member is very passionate and another not passionate at all? What if people are passionate about different things? Researchers surveyed 107 tech teams participating in an accelerator program, and found that diversity of passion among individual team members — in terms of how passionate they are, and what they’re passionate about — had a negative relationship with team performance, due to conflicting emotions and identities within the team.
Passion is the fuel that entrepreneurs need to keep going. Research shows that passion is a key predictor of entrepreneurs’ creativity, persistence, and venture performance. In other words, the more passionate the entrepreneur, the more likely they are to succeed.
Does the same idea apply to entrepreneurial teams? After all, the majority of new ventures are started and led by teams, and research shows that the way in which entrepreneurial team members work together plays an important role in determining venture outcomes. But it’s not clear how passion influences things. Does passion always lead to great teamwork? Is it the more passion the better? What happens if one team member is very passionate and another isn’t passionate at all? What if people are passionate about different things?
We conducted a study to understand how passion affects entrepreneurial teams. By conducting surveys with 107 tech teams participating in an accelerator program, we found that diversity of passion among individual team members — in terms of how passionate they are, and what they’re passionate about — had a negative relationship with team performance, due to conflicting emotions and identities within the team. We also found that high diversity in passion is more harmful during the later stages of venture development.
The Different Kinds of Entrepreneurial Passion
Prominent passion scholar Professor Melissa Cardon has established a framework distinguishing three types of passion among entrepreneurs.
- Some entrepreneurs are passionate for inventing: They focus on identifying new opportunities or creating new products or services. These are the typical scientists or product-oriented entrepreneurs.
- Some entrepreneurs are passionate for founding: They focus on setting up and nurturing the initial venture. These entrepreneurs get energized from creating the initial businesses. They often exit after a certain point and restart the process with a new venture.
- And other entrepreneurs are passionate for developing: They focus on building the venture, and they get energy from growing the business, attracting new customers, hiring new employees, and building an organizational culture.
We wanted to understand what happens to teams (and their ventures) that have these different kinds of passion. So we worked with an accelerator program in the Netherlands to collect information from a total of 251 entrepreneurs who were part of teams. (Of the individual team members, 71% were male, with an average age of 34. The average education level was a master’s degree, and 43% of the participants had prior start-up experience.)
After a team was accepted into the program, we sent an online survey to all team members asking about their passion and drive for the company. We used validated scales to measure passion, asking them to rate agreement with statements such as, “Searching for new ideas for product/services to offer is enjoyable to me,” “Establishing a new company excites me,” and “Assembling the right people to work for my business is exciting.” We also collected control variables and asked about characteristics of their business and entrepreneurs’ prior experiences.
At the end of the 10-month program, all teams were evaluated by external venture capital investors on the quality of their business ideas and the amount of investment the team had received five years later.
The Effects of Passion in Entrepreneurial Teams
We found a clear negative effect of diversity of passion, including diversity in how passionate team members were (high versus low passion), as well as diversity in what they were passionate about (inventing, founding, developing).
The first pattern we saw in our data was that teams with members who varied in how passionate they were (e.g., Theresa was very passionate about the venture, but Tom was less so) had worse short-term performance, in terms of the quality of their business plan and team dynamics.
The second pattern we observed was that teams with entrepreneurs who varied in what they were passionate about (e.g., Jackie loved to tinker with product improvements, while John was excited to interact with our customers) had worse long-term performance and raised less capital after the five-year period.
Why might these differences in passion hurt a venture? Let’s dig into a few (anonymized) examples from our data.
To understand the first pattern, let’s take the case of the Jumbool team, where founding members Emma and Sarah are very passionate about their venture, Bastian is moderately passionate, and Pieter is not passionate about it at all. In this particular case, the two most passionate team members started to work and strategize their priorities without including the rest of the team, and short-term performance dropped immediately. The passionate team members, Emma and Sarah, started avoiding working and communicating with Bastian and Pieter. This lead to less teamwork and lower group cooperativeness, which decreased team performance.
In contrast, look at the Catch20 team, consisting of four entrepreneurs who were equally passionate. They reported fewer negative emotions to us in their surveys, and they worked more quickly and with more focus than the Jumbool team. Because teammates were equally passionate, they engaged in participative decision-making instead of the autocratic decision-making processes that characterized the Jumbool team.
Now let’s look at the second pattern we observed: Teams with entrepreneurs who varied in what they were passionate about had worse long-term performance and raised less capital after the five-year period. Yollie was a company that failed because it had three founders that were all extremely passionate for the three different roles. Whereas Jan focused on the technology and felt like a true inventor, Rob was very passionate for founding and Rita was very passionate for developing. When it came time to making hard decisions, the three-headed structure really didn’t work. The many different passions led the team to pursue different goals, lose focus, and fail to reach consensus. It didn’t work as a divide-and-conquer strategy, because they didn’t come back together around a shared goal. The Yollie team performed worse and worse and eventually had to close their business.
Takeaways for Entrepreneurial Teams and Investors
While passion is generally positioned as a positive for entrepreneurship, our work suggests entrepreneurs should consider the negative outcomes that passion can have among teams. In particular, founders should consider passion diversity when thinking about bringing new members on board.
Even if high diversity in passion is not harmful during the early stages of a venture, it can present a greater challenge during the later stages of venture development. In the early days, team members are often focused on the short-term goals, such as finding a first customer or getting brand exposure. Individual differences are often less exposed. But over time, the lack of a consistent identity becomes more and more problematic as more impactful decisions are made, and team members invest more time in the venture.
Our study also has implications for the incubator and investor community. During the investment process, investors tend to merely interview entrepreneurs about the financial metrics that they are forecasting. Our study shows that including few questions about passion in their interview techniques can provides insightful knowledge on the survival of the company over the long run.
More specifically, accelerator programs and start-up boot camps could design courses and personal growth sessions around the topic of team composition, with an emphasis on passion diversity in teams. Especially for young startups that enter these programs, insights and dedicated sessions about the impact of various passions and ambitions within the team would add value. Oftentimes these teams are not yet “complete,” and careful assessment of team passion could potentially improve the success rates of future hires and the team as a whole.