Why Be an Entrepreneur?

I saw a discussion on Reddit about entrepreneurship recently that got me thinking. What’s the point of being an entrepreneur when the odds of success are incredibly low? This is especially true if you’re low on resources or clout.

Beyond the Silicon Valley Narrative #

The dominant narrative about entrepreneurship has become increasingly narrow: raise venture capital, grow at all costs, aim for a massive exit, and hopefully become a billionaire. It’s the script that’s celebrated in tech publications, glorified by accelerators, and drilled into the minds of computer science graduates.

But this narrative represents just one model of entrepreneurship—and frankly, not a particularly accessible or fulfilling one for most people. The statistics are sobering: only about 1% of startups that seek venture funding actually receive it, and of those, roughly 75% fail to return capital to investors.

So why pursue entrepreneurship at all?

Personal Motivations: Autonomy and Impact #

For me, the reason I want to be an entrepreneur is simple: I have valuable skills and I want to work on things that I care about. I don’t care that much about getting rich, but I do want to earn enough to live comfortably and not have anxiety about paying the bills.

It’s also very important to me that what I work on has a positive impact on the world. I’m quite opinionated about what’s good and not good for the world. It baffles me how some “tech leaders” are more concerned about acquiring additional money numbers rather than trying to improve the world around them. There is more than enough wealth in the world to solve most social issues, but the reality is that rich people need an underclass willing to work for low wages with no opportunity of upward class mobility to keep themselves on top.

That part doesn’t seem unusual to me either. A lot of people want the same basic thing: more control over their work and the chance to spend their time on something they actually believe in.

Ownership of Labor Value #

Anyway, to stay on topic, the reason I want to be an entrepreneur is that I want ownership of the surplus value created by my labor. I want ownership of the legal entity (a corporation) that benefits from all the output of my labor. You might call this communism, a cooperative model, or whatever. To me it seems like the best way to operate: working for yourself, and paying yourself first. I think everyone should own the fruits of their labor.

There are already plenty of companies built this way, or at least closer to it than the usual founder-and-investor setup:

• Mondragon Corporation in Spain employs over 80,000 people across 257 companies and organizations, with worker-ownership at its core
• King Arthur Flour in the US is 100% employee-owned and has thrived for over 200 years
• Arup, a global engineering firm with over 14,000 employees, operates as a trust for the benefit of its employees

At minimum, it’s enough to show this isn’t some fantasy that collapses the second real business shows up.

Reimagining Company Structure #

If I do manage to build a successful profitable startup on my own, I’d like to do a few things differently regarding equity and ownership in the company:

• All employees would receive equity in the business
• Equity will be granted proportionally to the amount of time spent as an employee, rather than by job title or position in the hierarchy
• Employees would get nearly the same amount of equity granted every month, regardless of job title/position/seniority (some exceptions might apply, like for example sales compensation is usually commission based)
• I’d like to do away with management layers, and focus on having the most skilled workers do their best work by letting them make their own decisions

The main things I want to push against are pretty simple:

The compensation gap problem: The average CEO-to-worker pay ratio at S&P 500 companies is now 324:1—up from 61:1 in 1989. This disconnect between contribution and compensation creates systemic inequities.

The agency problem: When ownership is separated from day-to-day work, decision-makers (executives) may prioritize short-term metrics that influence their bonuses over long-term company health.

The innovation problem: Top-down management often stifles creativity and fails to leverage the distributed intelligence of the entire organization.

Flat(ter) Structures in Practice #

While completely flat organizations are rare, more companies are experimenting with reduced hierarchy:

Valve (the gaming company) has operated without traditional managers for years. Employees self-organize around projects they believe will create value.

Basecamp maintains a very flat structure where small teams work with high autonomy and minimal management oversight.

Haier, the Chinese appliance manufacturer, reorganized its 80,000 employees into 4,000+ self-managing “microenterprises” that operate as internal startups.

Those examples are enough to make me take the idea seriously. They also make the tradeoffs obvious: if you want fewer managers, you’d better be good at communicating, making decisions, and staying aligned without somebody hovering over everyone.

The Equity Distribution Question #

It’s not hard to understand why wages haven’t grown proportionally to productivity and corporate profits: the vast majority of employees aren’t compensated with equity. Historically equity compensation has been heavily tilted towards executive fat cats, the Good Ole Boys Club, and people who came first.

I don’t believe the CEO of <insert big company name> adds much more value than the lowest level employees. In fact, you could make the argument that the hardest jobs tend to have the lowest pay and worst compensation–the only reason they earn less is because most difficult jobs tend to be unskilled labor which doesn’t require much training or expertise to do.

We only worship tech CEOs because we’ve decided as a society to accept that they are somehow better than the rest of us. It’s a class distinction that deserves more scrutiny.

The Practical Challenges #

While these alternative models are appealing, implementing them comes with significant challenges:

Financing: Traditional investors expect traditional structures. Finding capital for alternative models often means accepting slower growth or seeking mission-aligned investors.

Talent: People are conditioned to understand hierarchical organizations. Operating in flat structures requires different skills and mindsets, which can limit your talent pool initially.

Decision-making: Without clear authority structures, decision processes must be explicitly designed to avoid decision paralysis or unaccountable decisions.

Scale: Many alternative models work beautifully at small scale but face growing pains when expanding beyond a few dozen people.

Starting Small, Thinking Big #

I probably wouldn’t try to build the perfect version of this on day one. Better to start with a few rules I actually mean and keep pushing the company in that direction:

1. Start with principles: Codify your values around compensation, decision-making, and equity early, even if implementation is gradual.

2. Experiment incrementally: Test alternative approaches in specific teams or domains before company-wide implementation.

3. Build transparency: Even without perfect equity, radical transparency around compensation and decision-making can address many issues.

4. Seek like-minded partners: Finding co-founders and early employees who share your vision for organizational structure is crucial.

Beyond Money: The Purpose of Work #

For me this gets into what work is even for. Is it just a way to stack money and increase shareholder value, or can it also be a way to make useful things, solve real problems, and help people make a decent living?

Entrepreneurship lets you set the terms a little more. You can build something that serves the people doing the work and the people around it instead of just extracting as much as possible from both.

So for me, “Why be an entrepreneur?” has a pretty ordinary answer. I want to work on problems I care about, make enough money to live without constant stress, and build something that doesn’t treat everyone else involved as disposable.

That’s a prize worth pursuing, even against long odds.