The Self-Made Billionaire Effect

The Puzzle Nobody Could Explain

Here is a question that should keep every corporate boardroom up at night. The world is full of huge companies stuffed with talented people, deep pockets, and decades of market data. Yet again and again, the people who create truly staggering wealth are not these companies. They are individuals who often started out inside those very same companies, got frustrated, walked out the door, and went on to build fortunes the corporation could never have produced on its own.

Steve Jobs worked at Atari. Steve Case worked at PepsiCo. John Paul DeJoria was actually fired from a hair-care company before he built John Paul Mitchell Systems. Michael Bloomberg came up at Salomon Brothers. Mark Cuban, Mo Ibrahim, T. Boone Pickens, Stephen Ross, Michael Jaharis, all of them spent real time as employees before they became billionaires. So the obvious question is the one John Sviokla and Mitch Cohen set out to answer: why couldn't the corporations that employed these people capture even a fraction of the value those same people went on to create alone?

That is the heart of "The Self-Made Billionaire Effect." Sviokla, who ran global thought leadership at PwC, and Cohen, a PwC vice chairman, decided to stop guessing. In early 2012 their team took the Forbes "World's Billionaires" list, stripped out everyone who inherited their money and everyone who made it in opaque, hard-to-verify markets, and ended up with roughly 600 genuinely self-made billionaires. From that pool they drew a random sample of 120, balanced for geography and industry, and added a long series of interviews. What surprised them most was that nobody had ever done this before. There were memoirs and magazine profiles and contradictory hot takes, but no systematic study of how these people actually think.