First published in the Sunday Times on 5th April 2015.
Of course entrepreneurs start companies to make money. But for many, the cash is secondary, or even irrelevant. The reasons they invent businesses and make sacrifices are much more varied and complex.
Almost all entrepreneurs want autonomy. They refuse to report to a boss. They feel a visceral urge to control their destiny. This hunger for freedom in their work is generally a key element of their personality. They would rather earn less by running their own business than make more as an employee. To them that would be surrender, a betrayal of their values. At the Founders Forum, I polled entrepreneurs and most gave self-determination as the biggest driver for founding a business.
Many entrepreneurs are creative, and feed this craving by constructing a business. I would argue that the complexities of funding, staffing and running an enterprise, as well as devising products and delivering and selling them, is in various respects a more creative and socially valuable skill than painting pictures, writing books or singing songs. It is surely a more tangible and practical expression of an idea than most purely artistic outputs. Imaginative entrepreneurs work for themselves partly because they fear their vision will never be realised
within a large organisation, and because they want the credit for their originality.
At a talk I gave, a 70-year-old entrepreneur said he continued to start new businesses — he had done it seven times in his life — because he loved the challenge of doing something better than existing suppliers. He saw his mission as solving problems in a market, satisfying customers more efficiently than the incumbents. That is what gave him a zest for life — still dynamic after 50 years of productive work.
Some founders start companies because they thrive on the drama of it all. They relish risk-taking and would feel horribly bored stuck in middle management in a large organisation. They enjoy the struggle, overcoming the danger that they could lose everything — their savings, their reputation, their income, their confidence. They live for the adrenaline rush of beating the odds and winning.
Quite a few entrepreneurs are forced into self-employment because they have no choice. They cannot get a job, or they are made redundant, and they still need to earn a living and keep occupied. Yet, according to research, once they are their own boss, more than 70% say they would not wish to work for anyone else.
Plenty of people become entrepreneurs by accident. In many respects the hippie culture that started in Haight-Ashbury in the 1960s helped to spawn Silicon Valley in the 1970s and 1980s. Many of those hippies and entrepreneurs were students in the San Francisco Bay area, and both cohorts rebelled against what was then the mainstream. Of course, their countercultural interests — rock’n’roll and personal computers and the internet — have since become institutionalised. Most early Silicon Valley entrepreneurs simply wanted to tinker and invent: their corporations were an afterthought. Robert X Cringely titled his book about the creation of the modern computer industry by Silicon Valley’s nerds Accidental Empires.
Entrepreneurs may leave formal employment to work for themselves because they prefer the lifestyle — it enables them to better organise how and when they work. Being your own boss means you can work from home or part-time and enjoy a flexible schedule that lets you do other things — bring up children, look after elderly parents or pursue charitable interests.
Many want to pursue a particular occupation. Virtually all farmers are self-employed, as are many builders, hairdressers, taxi drivers and opticians. These careers are dominated by people who work for themselves, whereas hardly any actuaries, cooks, librarians or bus drivers do.
It seems to me the lives of many entrepreneurs trace a dramatic arc — whether by design or accident. It begins when they start or buy a business; it continues as they encounter difficulties; they overcome these to achieve a resolution; and their tale ends in triumph (or occasionally tragedy) — the classic narrative structure that underpins plays, films and TV drama, according to a book, Into the Woods, by the producer John Yorke.
Some founders are driven to forge a legacy, something larger than themselves that they hope will endure.
I believe we are all compelled to try to create order out of randomness, something coherent out of chaos. Humans are biologically and culturally programmed to counter entropy through action. Few do that in a more concrete way than entrepreneurs, building enterprises from scratch, assembling the elements to establish factories and shops, generate jobs and produce products. Like characters in fiction, entrepreneurs embark on a quest to discover a great truth. They face challenges and may meet defeat. But some go on to victory — a way to create meaning in life.