Why are people drawn to entrepreneurship?
When I ask the question above, the first answer that comes into mind is material rewards. Material rewards of succeeding as an entrepreneur are immense.
Let’s admit it, only few people wouldn’t care about the material rewards entrepreneurial success could provide. Having said that, I don’t think the material rewards are the only motivation for all entrepreneurs.
In order to explain that, think about the following scenario. Suppose that you have two options to choose from.
The first option is to be an employee and the second option is to be an entrepreneur, but in either case, you’ll receive the same material rewards. Which one would you choose?
I’m sure the answers to that question would be quite divided. My hunch is that some people, especially employees, will choose entrepreneurship. Some people, especially entrepreneurs, will choose employment. The grass is always greener on the other side.
Why would someone choose entrepreneurship even if the material rewards were the same or less than employment?
That is the question that I’m interested in. In my opinion, there are a few answers to that. If you have an answer to that question, please let me know in the comments.
Being Your Own Boss
This sounds like a cliché, but it has a merit. Having control over your own life is one of the determinants of peace of mind and happiness.
As an entrepreneur, you have more control over your own life, working routine, and so on. You have more flexibility. You can make your own decisions and you don’t need to follow the orders of a boss, who may or may not be as intelligent and/or reasonable as you.
There’s always some friction between bosses and employees, because of the inherent conflict in their interests. Only few businesses can minimize this friction. It’s only natural for employees to get out of that situation if they have the opportunity.
Some employees might think that they know better how to run a business better. They might want to test their ideas in the market place.
The independence and freedom entrepreneurship brings can be attractive to employees on multiple levels, starting from their ability to make decisions on their own lives, working routines, and execution of the business.
Now, let’s drop the assumption that the material rewards of entrepreneurship and employment would be the same.
And let’s suppose that there’s no guarantee of material rewards in entrepreneurship, which is a more realistic assumption. Why would you still choose entrepreneurship over employment?
I know this is an exaggerated claim. The reality is slightly different and there are always some limitations.
Nevertheless, compared to the fixed income in employment, entrepreneurship promises unlimited upside.
Fairness, Progress, and Rewards Proportional to the Value Added
The rewards of being an entrepreneur are proportional to the value added. This might as well be the single biggest reason for many entrepreneurs to choose the path of entrepreneurship.
Most employment positions offer fixed income. The income is capped no matter how much value the employee adds. As a result, most employees end up doing only so much to keep their jobs. This can be stressful for some people as making progress in life is a human need.
Entrepreneurship fulfills the need to make progress, because the rewards in entrepreneurship are proportional to the value added. Moreover, this fact also fulfills the need for fairness.
As an entrepreneur, an individual knows that their rewards will be proportional to the value they add. They also know that the value they add will be proportional to the effort they make. This motivates them to make great effort and to become the best versions of themselves.
Entrepreneurship not only promises massive rewards, but it also involves great risk. The risks and rewards of entrepreneurship makes entrepreneurship an exciting game.
The entrepreneurship game is so exciting that some entrepreneurs end up being addicted to it, playing it 24/7, almost in their sleep as well.
Material rewards are an obvious factor that attracts many people to entrepreneurship. However, they are not the only reason for entrepreneurship. Some other strong motivations to start by your own are the following.
- Control over your own life, work, and decisions
- Unlimited Upside
- Rewards Proportional to the value added
- A Sense of Fairness
- A Sense of Progress
- Excitement and the Adrenaline Rush Due to the Risks and Rewards
What would attract you to entrepreneurship? What would keep you from going on your own? Let us know in the comments.