Ego Paradox: The Sword and The Shield
“To go beyond is as wrong as to fall short.” — Confucius
The founder who sets a $1 billion revenue goal isn’t necessarily more ego-driven than the one who aims to do $1 million in revenue. They might have less ego, not more.
I know this sounds backwards. Much of startup culture sits on big goals, reality distortion fields, and founders who refuse to accept limits. But a meta-analysis of 11,819 entrepreneurs found something that counters the conventional wisdom: the same psychological machinery that makes founders bold also makes them defensive. Ego is both sword and shield—and most founders can’t tell which one they’re holding.
But here’s the deeper problem: when we say “ego,” we might not even be talking about the same thing. Ego holds many various (and contradictory) views, so framing the different interpretations of ego is vital to think through the matter effectively.
The Definition No One Agrees On
Ryan Holiday’s Ego is the Enemy is the de facto startup text on the subject. It has powerful applications and this book really did a huge favour to reinvigorate Stoic philosophy by packaging timeless ideas into modern packaging. Holiday’s definition of the ego is “the enemy of what you want and of what you have.” Ego in that sense is bad, suppress it, and stay humble or you’ll cause your own demise.
But Holiday isn’t using “ego” the way Freud did.
Freud’s ego is the conscious mediator between your drives and reality—the “man on horseback” managing your instincts. In his model, ego isn’t the enemy; it’s the thing keeping you functional. Without ego, you’d be pure id—desire without restraint.
Jung went further. He saw ego as the center of consciousness, subordinate to something larger he called the Self. The problem isn’t ego itself—it’s ego inflation, when you mistake your conscious identity for the whole of who you are.
Eastern traditions take it somewhere else entirely. In Hinduism, ahamkara (”I-making”) is the false identification of your true self with impermanent things—your job title, your net worth, your reputation. Buddhism goes further: anattā means there is no fixed self at all. Ego isn’t an enemy to be fought—it’s an illusion to be seen through.
The word ego carries the weight of psychoanalysis, spirituality, pop psychology, and hot takes simultaneously.
So when Holiday says “ego is the enemy,” he explicitly isn’t talking about Freud’s ego. When Eastern traditions say “transcend ego,” they mean stop identifying with the story you tell about yourself—not stop believing in yourself.
The founder reading ego advice faces a choice they don’t know they’re making: are they trying to suppress a dangerous impulse (Holiday), calibrate a spectrum disorder (clinical), or dissolve an illusion (Eastern)?
The prescription depends entirely on which diagnosis you accept.
The Sword Ego
This is the ego we know. The one that makes you quit your job, bet your savings, and tell investors your idea will change the world. The ego that wants you to become immortal, validated by the whole world, an historical figure to be remembered for centuries.
Research confirms this type of ego-centric energy works—at least initially. The meta-analysis found that narcissism correlates positively with entrepreneurial intention (rc = 0.24). People with high ego try to start things. They take swings others won’t take. They have to believe they can do exceptional things to want to take the jump.
VCs have learned to pattern-match for this. The “reality distortion field” isn’t a bug—it’s a feature they’re selecting for. The confidence to walk into a room and pitch something that doesn’t exist yet. The self-belief that lets you ignore the 90% failure rate and assume you’ll be the exception. Maybe all of invention and progress relies on some degree of “big ego energy” in order to imagine and achieve anything new.
The assumption underlying all of this: ego equals boldness equals good, as long as it’s channeled properly. Ego can be a force for good, not the enemy—and that’s a paradox I frankly struggle to harness as a founder.
But there’s a version of ego we don’t discuss much—and it might be the more dangerous one.
The Ego Shield
In a study of crowdfunding entrepreneurs, researchers found that the more narcissistic founders set lower goals and longer timelines than their less narcissistic peers. Let that sink in. The high-ego founders weren’t swinging for the fences. They were playing it safe.
The mechanism is ego-protection. If you set a goal you can’t fail to hit, you protect your self-image from public rejection. If you give yourself extra time, you build in excuses. What looks like “being realistic” or “conservative planning” may actually be higher ego, not lower—it’s armor against the possibility of falling short where everyone can see.
Clinical psychology has a name for this: vulnerable narcissism—the hypersensitive, status-protecting variety that looks like introversion but is driven by the same entitlement as its grandiose cousin. The grandiose narcissist attacks. The vulnerable narcissist withdraws. But beneath both: the same contempt-proneness, the same entitlement, the same antagonism.
The crowdfunding study had a punchline. Backers detected this pattern and funded these founders less. The market sees through armor. People sense when someone is playing defense instead of offense—even when that person doesn’t sense it themselves.
Going 0 → 1 Rewards Ego
Recent research suggests ego isn’t uniformly good or bad—it depends on when. A 2024 study put it this way:
“Narcissism is a tw-sided sword for founders. In the early stages of a company, many of the founder’s tasks can benefit from narcissistic tendencies. In the later stages of a company, that might shift to overwhelmingly negative effects.”
The 0→1 phase—ideation, founding, early fundraising—rewards ego. You need unreasonable self-belief to start something from nothing. You need to project confidence before you have evidence. You need to convince people to join a company that might not exist in a year.
Conversely, the 1→100 phase—scaling, managing, iterating—punishes it. You need to listen to customers who tell you your product is wrong. You need to hire people smarter than you and actually let them do their jobs. You need to kill your darlings when the data says so.
The trait that makes you start the company makes you unsuited to run it. Very few founders end up the CEO of a public company.
Narcissism correlates with passion for inventing but not passion for scaling. The visionary founder archetype—brilliant at creation, terrible at operations—isn’t a personality quirk. It’s a predictable consequence of the same psychological machinery.
A systematic review found that “while narcissism makes potential entrepreneurs have higher entrepreneurial intentions and greater willingness to take risks, it also prevents entrepreneurs from discovering opportunities, acquiring resources, and learning from failure.”
What gets you here won’t get you there.
Want to Fund My Big Ego?
A team analyzed the crowdfunding outcomes of entrepreneurs they ranked on a narcissism scale.
Low narcissism: underfunded. The founders didn’t project enough confidence to attract backers.
High narcissism: also underfunded. The founders projected so much confidence that it repelled people—or they’d set defensive goals that signaled weakness.
The sweet spot was in the middle.
This is the calibration problem. There’s an optimal zone, but it’s not at either extreme. Too little ego and you never start. Too much ego and you can’t course-correct when reality pushes back.
Multiple wisdom traditions arrived at the same place through different routes:
Confucius: “To go beyond is as wrong as to fall short”
Aristotle: The golden mean; virtue as balance between excess and deficiency
Stoicism: Humility without self-abnegation; confidence without arrogance
Clinical psychology: Healthy narcissism—adequate self-love, not too little, not too much
Taoism: Balance of opposites; the middle way as dynamic equilibrium
The Visibility Problem
The symptom of too much ego is not being able to see you have too much ego. This is the fundamental challenge. You can’t use a broken instrument to measure whether the instrument is broken.
This is perhaps the only point on ego where all traditions converge:
Jung: Ego inflation is “narcissistic delusion that the ego is the self”—you don’t see it because you’re inside it
Buddhism: The illusion feels like reality; you can’t see the prison from inside the prison
Tolle: “Awareness and ego cannot coexist”—the ego hides when observed
Clinical psychology: Narcissistic grandiosity correlates with unrealistic self-assessment
Stoicism: Marcus Aurelius constantly warned himself against becoming “another Caesar”—he knew visibility required vigilance
The usual narrative told on Steve Jobs casts him as proof that massive ego works—the reality distortion field, the perfectionism, the impossible demands. But the overlooked chapter tells a different story.
Jobs was publicly fired from Apple in 1985, by the board he’d helped create, from the company he’d co-founded. This wasn’t a strategic transition. It was a humiliation.
The years that followed—NeXT, Pixar—weren’t exile. They were recalibration. Jobs learned to work with teams differently at Pixar. He learned to build organizations, not just products. When he returned to Apple in 1997, something had shifted. The ego was still there—you don’t launch the iPod without ego—but it was channeled differently. Calibrated.
When Jobs gave his famous Stanford commencement speech, he delivered the line we all remember: “Stay hungry, stay foolish.” But listen to the context. He said it after describing his lowest moment, after being publicly rejected by the company he’d built. It wasn’t a prescription for ambition. It was a prescription for humility. Stay in beginner’s mind. Don’t assume you know everything.
Engineered Humility
Ed Catmull built something different at Pixar. Jobs clearly did learn from that approach.
“Sometimes, magic happens. And by magic, I mean the ego has left the room.” - Ed Catmull
But Catmull didn’t just hope for humble people. He built systems that neutralized ego:
The Brain Trust: Senior creatives critique each other’s films—with no authority to mandate changes. This removes power structure from feedback. You can hear what’s wrong without someone forcing you to fix it, which makes you actually listen.
Hiring smarter: “He was more qualified for my job than I was... I felt this fear—if I hire this guy, my boss will realize.” But Catmull hired him anyway. That hire became Pixar’s co-founder.
Power dynamics: “If a powerful person talks, they’re setting the tone in the room. And we don’t want them to set the tone.” So powerful people speak last.
The result: 22 films, 15 Academy Awards, $14 billion-plus box office. The most consistently successful creative studio in history.
This is what ego calibration looks like when it’s systematized.
The Echoism Trap
We’ve spent most of our time on too much ego. But the inverted U has a left side too.
Clinical psychology has a name for deficient ego: echoism—the Echo to Narcissus. Where narcissists take up too much space, echoists disappear. They dissolve themselves into others’ needs until there’s no self left to lead.
What does too little ego look like in founders? Never starting because surely someone else smarter must have tried already. It looks like burnout, self-sacrifice without boundaries. It looks like accepting bad advice because you don’t trust yourself and your gut.
Eastern traditions warn about this too. “Non-attachment” misunderstood becomes self-abnegation. The Bhagavad Gita doesn’t advise Arjuna to stop acting—it advises acting without attachment to outcome. Too little ego isn’t spiritual attainment; it’s a different kind of trap.
Walt Disney was fired from a newspaper job. His editor’s remarks: “You lack imagination and have no good ideas.” His first animation company failed completely, leaving him broke.
Disney didn’t reframe rejection as “they don’t understand my vision” (grandiose). He didn’t quit to protect his self-image (defensive). He absorbed rejection without it destroying his self-worth or inflating his ego into defensiveness. Same story for Edison and Dyson. Any good inventor has to clearly see their work as independent from their own self-worth to make meaningful progress in spite of burning, continuous failure.
This isn’t ego-as-sword (attacking). It’s not ego-as-shield (avoiding). It’s something else: persistence without attachment. Acting without needing validation or avoiding rejection.
Awareness as the Path
Ego isn’t a duality, it isn’t good or bad. Ego is a tool: a sword and a shield.
The question isn’t “do I have too much ego?” You can’t answer that accurately—by definition, excess ego distorts self-assessment. The real question is: what tool am I using right now?
The founder wielding ego as sword is taking risks, attacking markets, betting on vision. They’re making asks they’re not sure they’ve earned. They’re building something that might not work, in public, where failure is visible.
The founder wielding ego as shield is setting safe goals, avoiding feedback, protecting self-image from the possibility of falling short. They’re staying in comfortable positions because stretching would mean risking exposure. They’re calling it realism.
The calibrated founder isn’t ego-less. That’s not the goal and probably isn’t possible anyway. The calibrated founder is ego-driven too. And simply aware that their ego will always lead to blind spots. They’ve built systems—people, practices, feedback loops—that tell them what they can’t see themselves.
Ego is mostly invisible to us. We all tend to think we have less ego than we actually do. The best way to know how much ego we really do project is to ask others what they really think—if you can stomach it.