First published in the Financial Times on 24th June 2014.
It may be that by nature the self-employed tend to be optimists
Are entrepreneurs happy souls? They should be, because in a sense they define what makes us happy. According to research by economists and psychologists, the key to happiness is to find your own path in life.
After all, entrepreneurs know that it is autonomy and freedom – the ability to determine one’s own destiny, rather than the money – that is the critical reason why they do what they do. Many of the self-employed earn less than they could working for someone else. But they choose to be their own boss because it gives them more satisfaction and control over their career.
This latter aspect is a crucial factor in achieving fulfilment: mastering your own direction in life, rather than letting others do it for you (parents, teachers, bosses and so forth), really matters. Too many people feel helpless because they have no power over their world.
Recent research appears to confirm these views. Earlier this month, Babson College published the results of the Global Entrepreneurship Monitor study for 2013 in the US. It states: “ On the whole, those who choose a path of entrepreneurship end up . . . more likely to see their lives as ‘excellent’ and ‘close to ideal’ than those who do not become entrepreneurs.” Indeed, on average entrepreneurs rate their well being more than twice as high as the rest of the population.
For the first few years of their career, young entrepreneurs do not have bumper scores in the contentment stakes. Improvements in well being come over time. I can empathise: when I was in my 20s, and searching for opportunities, I often felt lost and frustrated. Sometimes I felt a failure, and unlikely ever to reach my ambitions. Almost all entrepreneurs strive in the early days until they adjust to their circumstances or change them.
It may be that by nature entrepreneurs tend to be optimists, and unsurprisingly as a breed they are happier than pessimists. Studies indicate that about 40 per cent of one’s happiness is decided through genetics rather than circumstance or nurture. This predisposition can typically be boosted by choosing to plough your own furrow and pursue your passion, rather than conform and simply do what others expect of you.
Another factor may be that humans appreciate earned success – they favour an appropriate linkage between merit and reward. Entrepreneurship offers this direct connection. Those who take a risk by inventing something or starting a business can expect just deserts if they win in the marketplace; whereas those who battle their way to the top in a large corporation or institution have to deal with the capricious tendencies of office politics, where triumph may be nothing to do with talent. In many large organisations credit for great ideas is stolen by senior managers – leading to enormous bitterness from junior team members.
And this feeds into another conclusion of research into happiness: humans flourish when they are active, and have purpose. Idleness, permanent relaxation and apathy are a path to a misery. I think the vast majority of us have an inbuilt need to be busy, productive and wanted. The important things take effort, and will test you: but the sense of achievement gained thereby is far greater than any enjoyment or gain derived from sheer luck, inheritance or consumption.
As Ralph Waldo Emerson said, “the high prize of life, the crowning glory of a man is to be born with a bias to some pursuit, which finds him in employment and happiness – whether it be to make baskets, or broadswords, or canals, or statutes, or songs”.
There are other reasons, too, why entrepreneurs are more likely to be happy than most. For example, they know well, through the exertion of building an enterprise, that the journey is the thing, not the destination. And they also understand that no undertaking is ever close to perfect – it is always a series of pragmatic compromises.
This is actually positive news; for we all need fresh goals, and the chance to do better. Entrepreneurs live and work in the real world, and yet they are dreamers at heart, struggling with the rollercoaster of victories and defeats.
To me, that is a marvellous combination, and why I am happy to be an entrepreneur.