“Well after the point that Facebook’s valuation passed $1B, Mark still lived in a small, crappy apartment and slept on a mattress on the floor. All he really cared about was work and he spent most of his waking hours at the office,” wrote Facebook’s first product manager, Ezra Callahan.
Entrepreneurs have a peculiar habit of bucking the capitalistic expectation of easy money for long hours hunched over a laptop, leaving cushy jobs to start a risky new company, dedicating their time to charity, or simply working enough hours to make their equivalent hourly salary less-than-minimum-wage. A new longitudinal study of business students has an explanation: happiness isn’t about the money.
“The joy that comes with an influx of money wanes quickly as people become accustomed to how wealth shapes their daily lives. Yet respect and admiration from one’s face-to-face groups might bring sustained [Subjective Well-Being],” concludes a new Berkeley study, which finds that the respect of one’s peers is far more predictive of an MBA’s happiness after graduation than their income.
Nine months after graduation, Berkeley Professor Cameron Anderson and his colleagues found, their students’ happiness couldn’t be predicted by their income, but could with responses to questions like “I am held in high regard by others” (so-called “sociometric status”). “Occupying a higher position in the local ladder thus created a sense of influence and control over one’s social environment, as well as a sense of belonging and acceptance,” explain the authors.
Of course, reputation is a double-edged sword: in the wrong environment, it can lead to the worst kinds of self-destructive greed.
“I can honestly say that the environment now is as toxic and destructive as I have ever seen it,” former Executive Director of Goldman Sachs wrote, in his angry, public exit from the banking giant, “It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail.”
Yet, in the right environments, such as the startup technology sector, reputation can push people to pursue innovation at the risk of a secure paycheck. As one engineer told Silicon Valley anthropologist, Anna Lee Sexanian, “A man who has not changed companies is anxious to explain why; a man who has (changed companies) perhaps several times, feels no need to justify his actions. Mobility has become the norm.”
Just last year, Biz Stone and Evan Williams left their respective positions at Twitter to start a mysterious new company, Obvious, which invests in an eclectic array of social impact ventures, such as faux-meat producer, Beyond Meat. “Being able to change the game in terms of how we deliver protein to the growing human population is probably the single biggest thing anybody could do,” said Kleiner Perkins investor, Amol Deshpande.
What the Berkeley study shows is that entrepreneurs who work tireless hours creating new products, or tech giants who push game-changing ideas, are sincere in their explanation that the effort isn’t about the money. But, it’s not altruism either. Rather, it’s about wanting to look at yourself in the mirror, and your friends in the eyes, and feel worthy of respect.
Federal Reserve Chairman, Ben Bernanke, best summed up the idea with an anecdote of Abraham Lincoln:
I am reminded of a story about Abraham Lincoln. According to the story, Lincoln was riding with a friend in a carriage on a rainy evening. As they rode, Lincoln told the friend that he believed in what economists would call the utility-maximizing theory of behavior, that people always act so as to maximize their own happiness, and for no other reason. Just then, the carriage crossed a bridge, and Lincoln saw a pig stuck in the muddy riverbank. Telling the carriage driver to stop, Lincoln struggled through the rain and mud, picked up the pig, and carried it to safety. When the muddy Lincoln returned to the carriage, his friend naturally pointed out that he had just disproved his own hypothesis by putting himself to great trouble and discomfort to save a pig. “Not at all,” said Lincoln. “What I did is perfectly consistent with my theory. If I hadn’t saved that pig, I would have felt terrible.”