Why Ownership is Everything

In business, ownership is everything.

I learned that lesson quickly when I worked as an Executive Assistant at a start up company.

In that role, I had inside access to sensitive data, like ownership percentages for the company founders, investors, and employees.

Most companies don’t offer employees any ownership, just a paycheck. (In my mind, this is fair.)

Silicon Valley startups offer employees some small piece of equity (or ownership) of the company. It’s a sort of incentive for working long hours and sometimes taking reduced pay.

If the company gets bought or IPOs, then the employees get compensated for the portion of the company that they own.

Ok, now that the primer on ownership is over, here’s what blew my mind when I got to look at the Cap Table (ownership percentages) for my first company:

The real owners, the founders and the investors, owned astronomically more than any of the employees.

The percentages weren’t even in the same ballpark.

Here’s a visualization of how a startup company pie might be split up after raising a few million dollars in financing:

At best, employees fight for a little sliver of the smallest chunk.

Once I recognized that, I knew that I needed to become an owner as quickly as possible. (Two years later, I cofounded a company :) .)

Why do owners reap more rewards?

The reason that owners reap more rewards is because they have more invested in the project.

Specifically, owners assume more risk and take more responsibility than non-owners.

If the company fails, the owners stand to lose the most and they are the ones held most accountable for that result.

The cost of ownership then is two-fold:

  • Risk
  • Responsibility

Applying the ownership model to YOU

You don’t have to run your own business to apply the ownership model to your own life – personally or professionally.

People who take ownership over their professional lives tend to win big professionally. People who take ownership over their personal lives tend to see huge personal victories.

Unfortunately, the majority of people are not owners. They are just employed to their lives and careers. (Tweet Me)

They make minimal investments in themselves and see minimal gains.

The reasons?

  1. They are not willing to risk their time, energy, and money investing in themselves.
  2. They are not willing to take responsibility for the outcome of their work and life.

I named this website Bootstrap My Life for a reason.

Bootstrapped companies do whatever it takes to get themselves off the ground and keep ownership for the founders.

They might not be pretty. They might not be easy to run. But they retain ownership. And when they win, they win big.

Bootstrapped lives are the same.

Taking action

Ok, so what do you do with this info?

First, take responsibility for the outcome of your life and work. Decide that you are not just going to let life happen to you, that your professional success is not solely the result of opportunities that fall into your lap.

Start by shifting to an ownership mindset.

Second, take an appropriate risk. If you are dead broke and late on payments, don’t quit your job to start a company.

Instead, take an account of your resources:

  • your financial resources
  • your available time
  • your personal and professional network

Then, take a risk that both pushes you forward and honors the reality of your current status.

Here’s a look at what available resources look like at different points along a typical career path:

At first, you may only be able to risk your time by taking on an extra project at work or putting more effort into building your personal platform.

Once efforts like this are met with promotion or new opportunities, you may be able to risk some money to invest further in yourself.

Start small and with each victory make the risk a little more audacious.

Whatever your step is and wherever you find yourself on this path, ask yourself:

When it comes to my life, am I an owner or an employee?

Bam! I’d love to hear your thoughts. Leave a comment and let us know what it what would it look like to apply the ownership model to your professional life.

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7 thoughts on “Why Ownership is Everything

  1. Hey dude,

    Great post. I personally feel like I’m in stage between mid & late in which the money and network bars are the same as mid, but the time bar is as low as late. There’s a light at the end of the tunnel, but it’s a long tunnel.

    Joel

    • Nice. You know, your the second person in that stage who has told me that they are time strapped. I guess it’s true that time is indeed our most precious resource. Thanks for sharing!

  2. Time management is so Key! and in that graph, it shows me how valuable time is and what I can leverage with my time. – Money and Network! sometimes I have to cut out small things i feel are important (which are more “Urgent” than important) and stick to the big things.

    Employees put in just enough time to cover whats urgent.
    Owners put in enough time to cover whats important.

    Thanks Ryan!