What "Ownership" Means at Work
I was talking to a founder about joining his startup as an employee, but he said, “I want owners, not employees.”
What does this term mean?
Being a Good Team Member
It means taking responsibility for one’s work rather than having an attitude of “I was asked to do X and I did X — who cares what happens next?” It means being proactive, fixing or flagging problems instead of ignoring them thinking, “Not my job!” It means being invested emotionally in the company’s success rather than having an attitude of “I got paid this month, so screw them!”1
All this makes sense. It’s what good team members do anyway. If someone uses “owner” to refer to this mindset, that’s fine with me. After all, we all have our own metaphors to convey a point.
Where ‘Owner’ is Misused
The aforementioned founder confused having a positive attitude with being an owner. A friend lent me his car, and I was grateful to him, had a great time with the car, made memories, took good care of the car, and appreciated the car. I had a positive attitude towards the car, but I didn’t become its owner. Similarly, the founder confused a team member with a positive attitude for an owner.
If you stop and think, “owner” means having as much say as anyone. I might tell the founder that the user acquisition strategy should prioritise word-of-mouth. Or that we should focus on profitable customers. It’s better to have 100 profitable customers than 10,000 customers of which only 40 are profitable. The first validates that we’ve built some of value. But not in the latter case, where the customers may just be there only for the discounts. When I said this, the founder snapped, “That’s not in your place to say.” My reply was, “Then I’m not an owner.” To be an owner of something, one has to have authority over it. I own my car, so I can decide how to maintain it, whom to lend it to, whether to buy accessories for it, and when to sell it. If there are multiple owners, then each can’t have full authority, but to be an owner, you still have to have no less authority2 than the other owners. Otherwise, you’re not an owner. If you and I co-own a car, and I don’t let you drive it fast by flooring it, and force you to use premium fuel every time, then you’re really not an owner, are you? You’re just someone borrowing my car — there’s no confusion about who the owner is.
In fact, Y Combinator says cofounders should have similar equity. If someone offers you 20% while they keep 40% , then you’re not really a founder3 or an owner.
It’s fine for the founder to say “I want everyone to be an owner”, but when you go against him, it’ll become clear who the real owner is. If this startup is a ship, this founder is the captain. He goes around telling everyone, “You’re a captain here!” But that just shows that he doesn’t know what “captain” means. If you’re not the captain, you may still have unique skills that the captain doesn’t have, and your contribution to the safe and efficient running of the ship is equally valuable. What the founder is trying to say is “Everyone is valuable here”, and he’s twisted that into saying “Everyone is a captain here”, because of his misconception that the captain is the only valuable team member.
Downsides of Ownership
There’s nothing wrong with not being an owner. I can deliver great results with solid professionalism and responsibility. Every problem is the owner’s problem. By contrast, as a non-owner4, I make certain areas like fundraising, marketing, sales, legal and operations not my problem, so that I can own tech and culture and do an excellent job at that, so the founders don’t need to look over their shoulders at this area. Not being an owner has its advantages.
Ownership breeds conflict. Why? Because when everyone feels entitled to have it their way, you’re setting yourself up for disputes and hurt feelings. This is why apartment associations are political — everyone’s an owner, so you can’t tell deny them their say. But when different people want contradictory things, someone must lose. Damned if you do, damned if you don't. That’s part of why I prefer to rent. Applying this lesson to work, it’s sometimes better to be honest and say, “You’re not an owner, but you’re a valued team member.” Having clear roles reduces these. Hierarchy has its advantages, and egalitarianism has its drawbacks.
The Financial Aspect
An owner is exposed to both the ups and downs of the asset. If my car gets totalled, I suffer a loss. Similarly, if a startup succeeds, the founders don’t have to work again. In a startup, this is codified through an equity percentage5. Founders own a lot. But suppose you’re joining as an employee and you’re offered 0.2%. They may do a whole song and dance about how you’re an owner — but you’re not, any more than owning the tyres makes you the owner of the car.
Unless they offered you as much equity as any other founder, it’s just a financial offer, like your ISP giving you the 7th month free if you prepay for 6 months. Regardless of whether you accept the offer, you don’t own their network, and similarly the 0.2% doesn’t make you an owner of the startup, grandiose pronouncements aside.
In summary, you’re an owner only if you have at least as much say as anyone else over the asset. In a startup, this translates to having at least as much equity as anyone else.
Of course, with authority comes responsibility.
You can still call yourself Founder to get respect from others, but don’t fool yourself. Be clear in your own heart about your role.
… of the company, though I’m still the owner of the engineering team.
You could apply this principle to any asset: I own 100% equity in my car.