What Do We Give Up When We Become Freedom-Seeking Entrepreneurs? A Lot, Actually.

Illustration by Mark Weaver Photo: Mark Weaver
To the Office, With Love
What do we give up when we all become freedom-seeking,
self-determining, autonomous entrepreneurs?
A lot, actually.
Illustration by Mark Weaver

One October day, I sat in on a seminar at the Freelancers Union called “Building a Foundation for Your Freelance Life.” The woman who led it, Michelle Ward, wore bright-red pants and a headband sprouting an enormous plastic flower. Ward is a career coach and the founder of When I Grow Up, which in 2013 made Forbes’s “Top 100” career websites. 

“Raise your hand if you consider yourself a creative freelancer,” she said at the start of her presentation. A number of hands went up. “Great! And what about a techie freelancer?” Also a number of hands. “Great. And what about a healing freelancer?” Nothing. “No one? Hm. Anyone I missed?”

A woman tentatively raised her hand.

“May I put you on the spot?”

She hesitated. “A capacity-building freelancer?”

“A capacity-building freelancer,” said Ward. “Intriguing! I love it. We’ll have to circle back around to that later.”

The way Ward describes her mission is to “transition workers from their soul-sucking jobs into work that feels like play.” During her presentation, she told the group the story of how she herself made the switch to self-employment “without the fear of losing my apartment, living on the street, becoming a bag lady.” (In a nub: She got her life-coach credentials while working at her desk job, set aside a big bonus, and generated a “killer” web presence.)

I’d expected the crowd at this event to be young and female, but I was wrong on both counts. The men outnumbered the women. The median age, if I had to guess, was 40. They were architects, graphic designers, advertisers, videographers, tech types. As the seminar came to a close, it was clear Ward had energized many of them. But it was also clear that a number had not jumped willingly to a freelance life. Even those who did had misgivings. Joe Babiec, a spiffy 46-year-old who had worked at some of the most prestigious consulting firms around (Booz Allen Hamilton, Monitor Group), confessed afterward that he was anxious about hanging out his own shingle. Yes, he was excited. “But I’m concerned,” he said, “about how to be successful without all the resources I’m used to—colleagues, knowledge networks. The traditional benefits of an office, basically. Not the coffee machine and four walls, but what’s inside the four walls.”

Say what you want about the future of work, but this much is clear: The traditional compact between employers and employees is slowly fading away, and with it, a way of thinking, a way of living, a way of relating to others and regarding oneself that generally comes with a reasonably predictable professional life. In October 2010, Intuit, the Silicon Valley–based software company, estimated that more than 40 percent of the American workforce would be made up of “contingent workers” by 2020, a statistic that has since been repeated with almost religious regularity. It’s only conjecture, of course, and skeptics point to the fact that the official self-employment rate in the United States is still hovering at just a shade over 10 percent. But there are plenty of serious people who believe Intuit’s estimate is perfectly plausible. “Forty percent doesn’t sound too high to me if you include all contract workers, part-time workers, freelancers, and individual suppliers,” Robert Reich, the Berkeley economist and former Labor secretary, told me. “At the rate we’re going now, it could be higher than 40 percent by 2020. A majority of workers will be on their own by 2030.” Indeed, back in 2006, the Government Accountability Office estimated that 31 percent of the American workforce were already in this position, more or less using Reich’s same criteria.

In certain segments of the population, self-employment is markedly expanding—like baby-boomers between the ages of 55 and 64, who, according to a report from the Ewing Marion Kauffman Foundation, make up 23.4 percent of new entrepreneurs. Bully for them, you might say. But it’s not clear how many of these 55-to-64-year-olds willingly made this choice. Kathleen Christensen, who directs the Alfred P. Sloan Foundation’s Working Longer program, suspects many aren’t starting their own businesses because they’ve been seized with a vision or a solution to a problem, as the mythologized version of the entrepreneur supposedly is. “From the research I’ve conducted,” she says, “they often lack other options.” Many are conscripts in self-employment rather than volunteers. There’s now even a term for such workers: “necessity entrepreneurs” (rather than “opportunity entrepreneurs”). Though not a whole lot of work has been done examining the difference between these two groups, what little there is suggests that necessity entrepreneurs aren’t always as successful—or as happy.

Yet it’s possible that more of us may be necessity entrepreneurs in the future. In his very fine Cubed: A Secret History of the Workplace, Nikil Saval introduces the uninitiated to the term economics writers use when describing modern white-collar workers: “Precariats” (a mash-up of “precarious office proletariat”). One day, it’s possible that many of us will think of work “not as a stable engagement, but a series of engagements,” as urban theorist Richard Florida puts it, and the concept of a “career” will become quaint, as will the idea of “work” as a place. In fact, among a younger generation of workers, this shift has already begun. According to Dan Schawbel, the founder of the Boston-based consulting firm Millennial Branding, today’s 20-somethings think of entrepreneurship as a mind-set, rather than as the explicit act of starting a company; on university campuses, there’s been a huge increase in students majoring or minoring in entrepreneurship. Richard Greenwald, a labor scholar at Brooklyn College, says he’s struck by how many of his students chafe at the notion of traditional organization jobs, “referring to the TV show The Office to describe what office life looks like.”

This transformation will have consequences far beyond a lack of psychological stability and job security for workers. It will change the very nature of work. What are we losing in a future that looks this way?

Courtesy of the Early Office Museum Archives

Let me just get this out of the way, in case my bias isn’t already clear: I am a creature of the office, happy to be an employee, comfortable with the idea of slow, plodding, incremental gain. I like showing up. Thus far, it has seemed like the easiest way to guarantee myself a night’s sleep, to the extent that I can ever get one, and also to pay for stuff, like my mortgage and health insurance. (My dad, who has shown up at the same law firm for the past 42 years, shares this bias, so much so that he’s unwilling to retire.) It also fills me with suspicion that some of the most enthusiastic believers in this freelance vision of the future are making an awful lot of money telling us how to prepare for it. (If you think about it, being a futurist is a pretty stable engagement—speculation about how 2020 is going to look can’t really be outsourced.) It further irks me that a number of these futurists have tenured positions at first-class universities, universities being one of the last known places where true sinecures exist. (Though now, naturally, at the expense of a growing underclass of adjunct professors making $3,000 per three-credit course, whose careers, mortgages, and health-care arrangements are anything but stable.)

But I recognize that my preference for the grayish creature comforts of the office honeycomb is not the majority point of view. Most Americans—indeed, a plurality of people in many industrialized nations—claim to find the idea of self-employment far more appealing. In 1989, the International Social Survey Programme asked random participants from 11 countries whether they’d prefer being an employee or working for themselves. An overwhelming 63 percent of Americans chose self-employment, as did 48 percent of Britons and 49 percent of Germans.

The actual rates of self-employment in those countries, however, were nowhere near that high. Which raises an obvious question: If so many people want to work for themselves, why don’t they? The economists David Blanchflower and Andrew Oswald set out to find the answer in their 1998 paper, “What Makes an Entrepreneur?,” which has since become a minor classic in the field. Their main discovery was not at all what I would have expected. I thought they’d find that the unifying theme among entrepreneurs was an outsize willingness to take risks. No. It was very different, almost the contrary, and much more concrete: “The probability of self-employment depends positively upon whether the individual ever received an inheritance or gift.”

In other words, those who already have some form of security are the people most apt to work for themselves—and by a wide margin, the authors added, even when factoring in “personal, family, and geographic characteristics.” This would likely explain why one of the largest dives in self-employment in the U.S. happened in 2007, just after the cratering of the housing market. “Home ownership made it possible to be self-employed,” explains Blanchflower, a professor of economics at Dartmouth. “They had something to borrow off of. You can’t do this now.”

The futurists, then, may be declaring that an increasingly unstable job market will drive more and more of us to go into business for ourselves. But it is under precisely the opposite conditions that most human beings are inclined to do so. “Some people are lucky enough that when life presents them with a blank canvas, they start filling it in,” says Laurence Stybel, an organizational psychologist and consultant whose firm does work for Boston Scientific and Harvard. “But for a lot of us,” he adds, “when life presents us with a blank canvas? We just freak out.”

For decades now, the office has suffered a lousy reputation. It’s a cubicled Hades of demoralized proletarians; it’s a glassed-in pasture of innocent cows that at any moment could get carted off to the abattoir. We saw this dim view played out over and over again in the pop culture of the last half of the 20th century, whether in The Man in the Gray Flannel Suit or “Dilbert” cartoons or Office Space, the cult film from 1999 that culminated in Ron Livingston taking a baseball bat to a fax machine. (And in this century, of course, we have Dwight Schrute’s stapler entombed in a Jell-O mold.) Saval chronicles these visions and dozens more in Cubed, ultimately implying there’s an irresolvable tension between white-collar workers and management: You may love your work, but the company you work for will never love you back; your office may be designed for maximal autonomy and self-determination, but you are not, in the end, autonomous and self-determining. Offices are factories in drag, their indifference to your life reflected in their most basic unit of design, the cube. Even if management is experimenting with the latest design fads (volleyball pits between desks! Workbenches! No assigned workstations at all!), its efforts will inevitably regress back to the cube. No matter how much lipstick you put on it, the cubicle, with its burlapped walls and push-pinned art, will inevitably be the office pig.

Why, then, do people build attachments to those cubes—or “freak out,” as Stybel puts it, if they have nowhere to go? What hidden comforts, apart from economic stability, does the company office provide? Well, there’s kinship, for starters. Offices are fundamentally social ­places, and in an age of dwindling social capital, in which Americans are less and less apt to visit with neighbors, join civic organizations, or have their friends over to dinner, having a community of professional peers is no small thing. According to a study commissioned by a Brooklyn-based organization called Lifeboat, 36 percent of adults have met at least one of their closest friends at work (and that’s on average: The number rises with successive generations, topping out at 50 percent for baby-boomers).

It’s also through your office that you stand a reasonably good chance of finding the person you’re going to marry. ­(Couples you may have heard of who first met at the office: Bill and Melinda Gates, Barack and Michelle Obama.) Last year, a study published in the Proceedings of the National Academy of Sciences found that 21.66 percent of the couples who met offline and married between 2005 and 2012 met through work; a Harris poll conducted that same year on behalf of ­CareerBuilder found that 38 percent of its sample hadn’t just dated someone “through work,” but someone at the same company, and that nearly one-third of these relationships led to marriage. (Fun fact: At Southwest Airlines, about 2,000 of its 35,000 workers were married to one another in 2004.)

It’s not just our personal lives that the office improves. Our co-workers also make us better at our jobs. There’s lots of research out there that gets at this, both directly and indirectly, but some of the most compelling, for my money, has been done by Boris Groysberg, a professor of business administration at Harvard Business School and the author of Chasing Stars: The Myth of Talent and the Portability of Performance. He’s analyzed top performers in a variety of professions (security analysts, general managers, even football players), on the theory that they, more than anyone else, are the new economy’s “free agents,” people so highly skilled that it shouldn’t matter where they work. Yet what Groysberg has consistently found is that whenever his research subjects changed jobs, they underperformed. “Those free agents,” he says, “are not free agents. They depend on the organizations that make them stars. It often takes them five years to recover.” And what, within those organizations, did they depend on? “In most cases,” he says, “their colleagues.”

Colleagues know your strengths and weaknesses. They know where the bodies are buried in your particular organization and its secret folkways, or what organizational psychologists call “informal information systems” (all that good stuff that’s not in official memos); over time, they’ll share that information with you, and it’ll make you work more shrewdly and efficiently. The mere fact that they’re there at all—in one place, at one time—probably makes a difference: Who on earth does their best work in a vacuum?

“The first thing that’d be lost if offices went away, I think, is creativity,” says Adam Grant, the 33-year-old management wunderkind at Wharton and author of the recent Give and Take. “So much of organizational creativity is about the random walk down the hallway of an office. There are so many examples of successful people who never would have crossed paths if they hadn’t been in the same office together.” The makers of the Post-it note being the most famous example. (Spencer Silver, who invented the “low tack” adhesive, had no clue what to do with it; his colleague Art Fry realized it could be used to hold down the bookmarks that kept falling out of his hymnal at church.) “I think the odds of Spencer Silver having met the just-right guy outside his own office,” says Grant, “would have been much lower.” Indeed, the need for these kinds of connections may explain the rise in the number of co-working spaces, which, according to Saval, has been doubling steadily since 2005 in the U.S. (The Wall Street Journal just reported that WeWork, a provider of such spaces, has a valuation of $5 billion.)

Even if co-workers aren’t supporting or inspiring or engaging you—even if they’re outright antagonizing you, in fact—they often serve a hidden function: They make you strive, make you expect more from yourself, make you realize more is possible professionally. Twenty-seven percent of millennials say that workplace friendships make them more competitive, according to a ­LinkedIn survey released this past summer. And the transformative effects of co-workers are nothing compared to those of mentors, who by definition expect the most from you and make it their business to show you the ropes. “Most successful people will tell you they’ve been mentored,” says Stybel, the Boston-based consultant and organizational psychologist, “and that mentor is often found at work. One of the things I tell young professionals as they’re starting out is to manage themselves well enough to be worthy of being mentored, and that can only be done through physical proximity.”

Wait, I ask him. Doesn’t that mean telling millennials to go work in an office? The very thing so many of them purportedly disdain?

“Yeah,” he says. “And sometimes even in a large company.”

Colleagues are a tangible benefit provided by organizations. But perhaps the most profound benefit is intangible: They help forge identity. At first blush, this notion may sound laughable, or at least paradoxical, given the office’s reputation as a wasteland of depersonalization. But Sue Ashford, a management professor at the University of Michigan who’s written thoughtfully about nonstandard work, notes that offices provide a “holding environment”—a psychoanalytic term coined by Donald Winnicott—to contain our existential anxiety.

“What we found among nonstandard workers,” Ashford tells me, “wasn’t just economic stress. It was identity stress. Like, Who am I? Do I have any value? What was missing was a sense of place.” Think of all the signals you get just on your way into work. “When I come into my office every day, I have someone who waves to me from the reception desk,” says Ashford. “I have my name on the door. I’m on the org chart, I have a set of colleagues. There’s all these things that communicate to me, subliminally, that I matter.” But for nonstandard workers, she says, “all those reminders of who you are go away. You’re no longer a ‘Googler’ or an ‘IBM-er.’ Those signals are absent.”

“One of the great organizational scientists, Robert Kahn, asked: ‘Where does the organization go when people go home at night?’ ” says Adam Grant, Ashford’s sometime collaborator. “That was one of the aha moments I had. The physical presence of an office suggests something real. It’s not just that they bring people together. It’s that they’re a stable representation of the organization—the mission and values it represents and the community it’s designed to hold and create.” Grant mulls this over and then takes the same plunge into psychology that Ashford does. “I think the office is about object permanence,” he says. “In other cultures, you may have a very large family home that provides you with memories—you associate it with experiences and relationships and people. It’s a landmark. But in a society as mobile as ours, we run the risk of never having that permanence.”

This crisis of identity and impermanence is made worse if you suffer a dry spell as a freelancer. If an actor keeps auditioning for jobs without getting them, is he an actor, really? If a graphic designer gets no commissions, or if a consultant gets no clients, or if an ad-copy writer is sought out by no one, are they still who they are? “You’re still a lawyer when you’re not in the courtroom,” says Ashford. “But nonstandard workers only are who they are when they’re doing it.”

Which raises the question of whether certain types of people are better suited to the new freelance economy—namely, those who can tolerate frequent longueurs and stoutly withstand rejection.

Oswald and Blanchflower argue that no one particular suite of childhood personality traits can predict who will later become self-employed. They scrutinized two data sets that followed around 12,000 Britons at regular intervals throughout their lives and never once found a common denominator. “It is access to start-up capital that matters,” they say. But there is a countervailing school of thought. Paul Graham, an essayist and a venture capitalist, says being “relentlessly resourceful” is what separates successful entrepreneurs from the rest. Dane ­Stangler, vice-president of research and policy at the Kauffman Foundation, says that the best of them tend to be problem solvers, rather than those who simply adapt to inconveniences. In 2003, a trio of psychologists from the University of Georgia followed
a sample of college alums from the same southeastern university and found that the qualities of “proactiveness,” “insight” (focus and self-awareness), and “openness” were the most definitive predictors of success in the boundaryless work economy.

The other quality that seems essential to this way of life is extroversion—or, at the very least, a willingness to network, accumulate contacts, and promote one’s own work. “It’s not just doing the work. It’s acquiring the work,” says Schawbel of Millennial Branding. Schawbel is a good example: He published more than 23 articles in the run-up to his latest book, Promote Yourself, in order to drum up attention; at his book launch, he mentioned that he’d spent three and a half years trying to get himself on the Today show before he eventually succeeded.

Always Be Cultivating. It’s the new-­economy corollary to Always Be Closing, Alec Baldwin’s brass-balled motto in Glengarry Glen Ross. There’s a whiff of the vulgar about it: Self-promotion does not equal substance. And something oppressive about it, too: The elusive goal of work-life balance becomes even harder to achieve when a part of you always feels compelled to network. In a 2004 paper, Blanchflower looked at data examining the well-being of the “successful self-­employed,” meaning those who had at least one employee, from 30 countries. While he found that the self-employed did indeed consider themselves happier, they were also more apt to report stress, exhaustion, and work-life imbalance than those in traditional salaried jobs. As a 40-something entrepreneur put it to me—a man who’s successfully launched three companies—there is “no longer a barrier between work life and social life. Every interaction is a transaction. There are very few friends who are just social.”

Regardless of how we feel about it, a traditional American office life—or career—is becoming increasingly rare. Nostalgia for it, in some ways, is pointless; we cannot go back. In the immortal words of Austin Powers: “That train has sailed.”

According to Cubed, the whole project may have been doomed from the start. When the modern office park was born, Saval writes, even Businessweek—which one imagines would be bullish about all tidy-workplace developments—called it a place of “illusory” freedom. In 1951, the sociologist C. Wright Mills called the new booming class of office workers “little men.” Saval, more piquantly, dubs them “autonomous followers.”

It’s something many American office workers still clearly believe themselves to be. A few years ago, Jeffrey Pfeffer published a paper called “Working Alone: Whatever Happened to the Idea of Organizations as Communities?,” in which he let loose a stream of damning statistics: Fewer than 40 percent of U.S. workers trust their companies to keep their promises; 52 percent don’t believe what management tells them; 67 percent “do not identify with or feel motivated to drive their employer’s business goals.” If that’s the case, why not break free?

“We’re between two universes right now,” says Sara Horowitz, the founder of the Freelancers Union. “There’s no robust safety net, yet there’s no going back to the old way.” If the future means less stability, she says, the least her organization (and others like it) can do is make the world seem more navigable, providing services large employers once did. “We’re trying to make freelancing a really good way of life,” she says.

And it may well be. But not for everyone, one fears. Though the ­Freelancers Union caters mostly to the white-collar self-employed—the graphic designers, the writers, the landscape architects—12 percent of freelance workers overall relied on some form of government assistance during the recession. (“People can taste that it can fall apart,” Horowitz says.) Those without college educations and valued skills are in an especially tenuous position. “Even the worst-paid artist,” says Florida, “isn’t in the same universe as low-wage workers.”

This isn’t hyperbole. According to an analysis done by Economic Modeling Specialists International, a firm Florida often uses for his research, the median wage for freelancers in arts and design in New York City is $17.46 per hour; for contingent food-service workers, on the other hand, it’s $7.62. What’s more, the wages of freelance artists and designers in this city exceed the national median by $1.30 an hour, whereas the wages of food-prep workers are $1.51 per hour less. The freelance economy, in other words, is especially punitive to the unskilled in this city.

The very words we use to describe these two sets of workers have embedded class distinctions: We reserve freelancer, with the word free in it, for the educated, because it implies a lifestyle of creativity and self-determination (even if its realities might be unstable). The term contingent worker, on the other hand, suggests you are just that, contingent: disposable, clinging to the outside and looking in, without any agency at all. According to the Government Accountability Office, nonstandard workers have both more education and less than traditional workers, depending on the type of work they do. And it is the less-educated workers about whom we should be most concerned as the world of work evolves.

“There are a couple different visions of the future,” says Lawrence Katz, an economist at Harvard. “One is a disaster: The cognitive elite live in their gated communities, and everyone competes to provide services for them at very low wages.” The other, he says, is more humane: “We invest in everyone.” He says the first arrangement is unsustainable. But he concedes that the second would only be possible if American education looked very different from the way it does now, and the social safety net, for which our country is hardly renowned, were a lot thicker. “It may well be,” he says, “that the secure future was a 50- to 75-year blip.”

*This article appears in the December 29, 2014 issue of New York Magazine.