Entrepreneurship Always Leads to Inequality
“Inequality, in the broadest sense, is precisely, and perhaps paradoxically, what entrepreneurship is all about: entrepreneurs use their wit and grit to burst into new markets and generate extraordinary wealth, sometimes very quickly, more often over decades.Along the way, entrepreneurship rewards smart and risk-tolerant investors (who helped build the success) with wildly above-market (read: unequal) financial returns.
The most successful entrepreneurship is disruptive — a term entrepreneurs these days have donned as a magic mantle: “We have a disruptive business model, a disruptive technology, and will disrupt the market” goes the startup pitch. Amazon has disrupted book stores and other retail chains, Zipcar disrupted car rentals, Netflix is disrupting cinemas and cable companies, Airbnb disrupts hotels, and Bitcoin may disrupt the payment industry.
But the meaning of ‘disruptive’ was never meant to be pure and all-positive: its synonyms include ‘troublemaking,’ ‘disorderly,’ ‘disturbing,’ ‘unsettling,’ and ‘upsetting.’ With all the buzz around disruptive innovation as a driver of business success in recent years, it’s important not to forget this original meaning.
Entrepreneurial success is intrinsically lopsided, a natural outcome of creating extraordinary value for customers. Entrepreneurship — if it succeeds — will always be, by definition, about the top one or two percent. It is about being the best of the best, about jumping over hurdle after hurdle on the way to the gold medal in the Olympics of enterprise, and leaving competitors in the dust.
Entrepreneurship, per se, can create many social goods. It can push innovation, can create dignified employment, can improve quality of life, can contribute to fiscal health through taxes, and does (at least in a few countries, including the US) dramatically boost philanthropy.”