You are a realtor that just moved to the city after college. You get paid $60,000/year, making your $3,800/month Upper East Side studio that you bought to fit in with your co-workers unaffordable, but your 5% commission just brought you $1. 5M this year. Your friend that got the return offer from Google gets $200K/year and just coasts through work, going to play competitive pickleball everyday at 5pm. She just needs to attend most meetings with the occasional "wifi outage" and will get the PM role in a few years. If you were paid as much as her, you would have done the minimum too, but the 5% pushes you to grind harder than all of your colleagues. You skip birthday parties, pickup basketball games, late nights at night clubs, and everything else to get more leads. To sign more deals. To increase your commission. If I was your boss, I'd want you to obsessively grind like that too.

Roivant—Vivek Ramaswamy's biotech venture— did something few others did in the pharmaceutical industry: scientists received carried interest in the projects they were working on. Pharma companies pay their scientists with a mix of base salary (fixed), performance incentives (fixed upside), equity (infinite upside, fixed downside), and benefits (fixed, in-kind). Scientists have little incentive to take risk since their pay only astronomically jumps if the entire company does better in the public market, which often can't be controlled by an individual or a team's work within a company. Partners at private equity firms have a base salary (fixed), bonuses (fixed upside), benefits (fixed, in-kind), and carry (infinite upside, fixed downside). Unlike venture capital where the carry is tied to fund performance (where partners can coast on their hardworking teammates), deal-specific or team-specific carry is the norm in PE, so partners actually have to be productive to benefit. If a deal goes well, there is no cap on the gain, easily tens of millions for some deals, pushing partners to take bets farther down the risk-return spectrum and work their ass off to make sure the bets play out as planned. Complacency is not rewarded. Payoff is asymmetric.

Many companies rely on a few big wins and many small losses (e.g. pharma, venture capital, tech sometimes), but the people actually doing the risk-taking (e.g. scientists, venture partners, software engineers, product managers, etc.) seem to be inefficiently leveraged.

That kinda sounds like Google. It's an open secret that Google's managerial class has won the cold war against the builders. Product innovation has waned, with the graveyard of products getting larger each year. Since Google has hundreds of products, many generating their own revenue, it would interesting to see what would happen if each product team received a percentage of each product. E.g. if your team's product does well then you could make millions as it scales. Most product teams would probably drop their 5-degree bureaucracy overnight.

It's easy for this to turn into the Wild West, with teams sacrificing true world-changing products for short-term profits but bounds derived from the company's mission and leadership would "steer" the potential chaos into true value-generation and satisfaction for team members. More ownership in the product = more effort to make it valuable. If a team truly succeeds, they will be rewarded for their work. The company will be rewarded orders of magnitude more. Although the incentives are more non-linear than a New York realtor's fixed 5% commission, incentives are aligned. This can't be that revolutionary.