Elite outsiders? Power and merit in the biographical narratives of highly successful tech entrepreneurs in Germany

Abstract

A central concern in recent sociological literature on elites is the disparity between the structurally unequal distribution of power resources in society and the minimization of that inequality in subjective accounts of elite individuals. This study contributes to the debate on this divergence in perception by drawing on a survey of 26 founders and CEOs of some of the largest and most influential start-ups in Germany – asking how these entrepreneurs narrate and legitimize their own path to an elite position. The main finding is that most of their (auto)biographical narrations ascribe the tech elite a status as outsiders to the established structures of the German economy. The surveyed entrepreneurs present their own elite status as meritocratically earned by emphasizing either their non-elite social background or their maladaptation to traditional elite career paths. In this study, it will be argued that their self-stylization as outsiders is best understood as a symbolic reaction in the larger context of the overall fading legitimacy of established economic elites. However, to be persuasive in appropriating and subverting the social figure of the outsider for themselves, these narrations necessarily ignore existing structures of inequality in the tech sector. This omission is especially glaring considering the exclusion of women from positions of power in the German tech sector, which this article critically juxtaposes with the dominant narratives in the field.

Introduction

There are two competing narratives about success and merit in the global tech economy. On the one hand, accounts from the field itself present it as a realm of heroic entrepreneurs, who creatively pioneer digital innovations to pull themselves up by the bootstraps (Andreessen, 2023; Thiel & Masters, 2014). On the other hand, critical analyses point out that the tech sector is hardly a level playing field, but rather an extension of existing structures of capitalist inequality (e.g. Mazzucato, 2013; Rikap, 2021; Staab, 2024). This contrast relates to a central theme in current elite studies, where the disparity between the objective distribution of power resources in society and the subjective narrations of individuals in elite positions is an increasingly important analytical problem. In recent years, many studies in elite sociology have therefore analysed how legitimization patterns of elite power are continuously shifted in relation to the global increase in wealth inequality (Friedman et al., 2024; S. R. Khan, 2011; Rivera, 2015; Savage, 2021; Sherman, 2017). This article contributes to that debate by drawing on a qualitative survey of the biographies of German tech elites. Specifically, it will be reconstructed how they narrate their own biographies in relation to the power structure of the German economy to present themselves as legitimate elites.

The theory section of this study starts with a discussion of its underlying conceptualization of elite power, drawing on the adaption of the classical Weberian definition of power to elite studies proposed by Mills (1956/2000) and then later by S. R. Khan (2012). In this conceptualization, any power relation requires a degree of legitimization – and in contemporary Western societies, the dominant mode of legitimization is that of meritocratic achievement. It will be argued that economic elites are currently undergoing a legitimization crisis against the backdrop of globally growing wealth inequality, and that the ever-changing notions of merit within the narrations of elite biographies are to be understood in this context. In Germany specifically, there is increasing public scrutiny regarding how little the persistently unequal processes of elite formation have changed over the last couple of decades (Hartmann, 2020; Hubrich & Staab, 2024; Kollmorgen et al., 2024). In this context, the immense amount of wealth creation tied to tech entrepreneurship in recent years plays a crucial role for the legitimization of elite power by providing a new narration of meritocratic achievement.

Empirically, therefore, this study draws on a novel survey of 26 of the most influential and wealthiest German start-up entrepreneurs (16 surveyed through interviews, 10 through case reconstructions based on extensive secondary data). Generally, the main finding is that the (auto)biographical narratives of these men centre on self-presentations as outsiders to the established structures of the German economic elite – despite many of them leading and partially owning companies valued upwards of a billion dollars. It will be demonstrated that these life stories of non-belonging are narratively constructed in two typified ways, of which one relates to social upbringing, and another relates to the institutional setting that shapes traditional elite careers in Germany. As all but one of the entrepreneurs surveyed for this study were men, the empirical analysis will end by juxtaposing the dominant perspectives in the field with the experiences of a female start-up entrepreneur that was gatekept from occupying an elite position. Through this, it will become clear that the self-stylization as outsiders by the men in Germany’s tech elite serves a primarily symbolic function. After all, the classical conception of Elias and Scotson (1994) makes it clear that actual outsider groups are not constructed by their own choice, but rather through stigmatization by established groups.

Theoretical background

Power and meritocratic legitimacy in elite biographies

Defining elite power is simple enough: ‘Elites are those with vastly disproportionate control over or access to a resource’ (S. R. Khan, 2012, p. 361). Yet, when Mills (1956/2000) conducted his seminal study on the elites of the post-war US, he was faced with an analytical problem that haunts scholars to this day: ‘men of power tend, by convention, to deny that they are powerful’ (p. 23). This disparity between subjective accounts of elite individuals and their objective positions of power is accounted for in the conceptualization of power that underlies the work of both Mills and Khan. They follow the classical Weberian framework (Weber, 2021), in which power can principally be based on a host of different resources depending on the specific social context, but in capitalist societies is typically tied to institutionalized positions within the hierarchies of the political economy. The elites of the start-up economy, for example, are those who lead the best-capitalized companies and whose opinion is therefore considered by the elites of other sectors. Additionally, though, there is an important second dimension of power in the Weberian framework, which is that any lasting power relation needs to (consciously or unconsciously) appear as legitimate to the individuals involved in it. And while the mode of legitimization in a given society must relate to the distribution of power resources in it in some way, it can principally take a host of different forms and change over time.

In the society of the 1950s as described by Mills (1956/2000), elite positions were legitimately proffered and occupied based on a sense of entitlement: ‘The elite . . . feel themselves to be, and are felt by others to be, the inner circle of “the upper social classes”’ (p. 11). These upper social classes, as Mills described them, were homogeneously white, Anglo-Saxon members of few certain Protestant churches, resident in few certain metropolitan neighbourhoods, and educated at exclusive private schools and universities. While Mills never explicitly discussed gender inequalities, women were generally excluded from occupying formal positions of power at the time of his analysis. Rather, their role in the upper classes was confined to the sphere of the family and to the role of the ‘society lady’ (Mills, 1956/2000, p. 79), serving as informal networkers between the men in elite positions. As educational systems and labour markets increasingly opened for women in the second half of the last century, formal positions of power became gradually more available to women. However, even the few women who made it into these positions often remained outsiders to narrower elite circles, as they found themselves excluded from established ‘old boys’ networks’ (Moore, 1988, p. 575). Data across different countries and sectors show that today ‘education has enabled women to make gains in middle-class or professional jobs that pay well’, but they are still strongly underrepresented in elite positions (Keister et al., 2022, p. 156).

Yet today’s elites are no longer gatekeepers who explicitly exclude others from positions of power based on demographic criteria or not fitting into a hegemonic elite culture. In a study that turned out to be pathbreaking for the recent revival of the sociology of elites, S. R. Khan (2011) analysed the culture of a boarding school on the US east coast explicitly mentioned by Mills as a typical place of exclusive elite formation half a century earlier. Khan found that the students there, even though they largely still come from the same privileged social classes as before, today quite sincerely believe in the values of meritocracy, diversity and social openness. However, as Rachel Sherman’s (2017) study on ultra-wealthy New Yorkers shows, the principle of meritocratic achievement elicits a sense of uneasiness among the elite – as many of those in very privileged social positions are afflicted by doubts about whether they actually deserve their status. This problem is especially poignant as, despite all shifts towards openness on a cultural level, the distribution of wealth in Western society remains as unequal as in the 1950s world described by Mills and is currently increasing rapidly (Savage, 2021). A growing body of literature has therefore engaged with the question of how notions of meritocratic legitimacy are constructed across a wide range of social contexts (Friedman et al., 2024; Friedman & Reeves, 2024; Hecht, 2022; Kantola & Kuusela, 2019; S. R. Khan, 2011; Rivera, 2015; Schimpfössl, 2018; Sherman, 2017). An overarching insight of these analyses is that merit is neither an objectively definable, static quality of individuals nor an unequivocal concept. Rather, it is ‘a social construction embedded in societal-level cultural beliefs about what constitutes worth in a given time and place’ (Rivera, 2015, p. 9). As shown especially vividly in Lauren Rivera’s analysis of elite firms’ hiring processes (Rivera, 2015), the goalpost for who exactly deserves to be viewed as a meritorious individual is continuously moved to reflect the qualities and experiences of the social groups that are already privileged.

The institutional contexts of elite recruitment therefore matter for the specific social construction of meritocratic legitimacy. For example, in a comparison of elites from the UK and Denmark, Friedman et al. (2024) demonstrate that UK elites view their own merit as based on innate talent, whereas Danish elites describe their own merit as the proven capability to work hard. These differences, they argue, correspond to the respective national paths of elite recruitment: while the British sense of meritocratic legitimacy is shaped by attending selective private schools, Danish elites are selected through their work experience at a few large companies or public ministries. By differentiating between merit based on hard work and on innate talent, Friedman et al. (2024) provide an understanding of merit as a concept with multiple possible conceptualizations. Biographical narratives therefore play a central role in the construction of meritocratic legitimacy, as individuals can instrumentalize their lived or intergenerationally transmitted experiences to piece together a biography that best conforms to the conception of merit that is culturally dominant in a given social context. In a survey of British elites, Friedman et al. (2021, p. 716) found that accounts by interviewees from privileged social backgrounds are often deflected in favour of ‘particular “origin stories” which act to downplay interviewees’ own, fairly privileged, upbringings and instead forge affinities to working-class extended family histories’. Friedman and Reeves (2024) further discuss the social function of such deflections. They argue that there is a ‘symbolic market for ordinariness’ (Friedman & Reeves, 2024, p. 58) in the face of growing social inequalities and generally increasing public scrutiny of elites, meaning that meritocratic legitimacy is gained by presenting oneself as having overcome humble origins.

Elite formation in the tech economy

One of the most far-reaching recent dynamics in shaping the formation of economic elites was the emergence of a digital tech sector originating in the Silicon Valley. Today, large American tech firms are among the highest valued companies globally, and their executive strategies are widely regarded as role models for successful corporate leadership (Staab, 2024). In this context, it is to be noted that there is an important operational logic at play in the tech sector: as digital markets are typically winner-take-all markets, dominant companies have often gained their market positions by following aggressive ‘growth before profit’ strategies (Srnicek, 2017). From the perspective of critical political economy, many scholars have therefore pointed out that the most important skill of the founders of tech companies does not concern product innovation itself, but rather the ability to raise enough capital to outlive all competitors (L. M. Khan, 2016; Rikap, 2021; Srnicek, 2017; Staab, 2024). In fact, many of the basic technologies that have been successfully commercialized by today’s leading tech companies – for example, the smartphone touch screen or GPS – have originally been developed and funded by public institutions (Mazzucato, 2013). Nevertheless, the tech world places a high value on being ‘disruptive’, in the sense of constantly threatening the status quo of established companies by working on innovations that can upend existing market structures (Christensen et al., 2015). While an emphasis on disruption stands at odds with the sector’s reliance on financial markets and public support, it is at the same time inherently necessary due to the operational logic of the sector – as only those entrepreneurs who can convincingly promise fast scaling and exponential growth will get the venture capital that their companies need to survive.

In keeping with the value placed on being disruptive, the mode of elite legitimacy in the tech sector seems to differ from both the entitled elitist gatekeeping described by Mills (1956/2000) and the notion of meritocracy tied to social openness observed by S. R. Khan (2012). Classically, the worldview of the tech elites originating in the Silicon Valley has been described as combining a strong belief in technology and entrepreneurship with an emphasis on anti-statism and personal liberties that was shaped by the counterculture of the Californian New Left (Barbrook & Cameron, 1996). Yet, in this originally very informal sector, the first generation of successful entrepreneurs happened to be men, who then went on to fund and employ more of their male friends – creating a ‘bro culture’ in the tech world that left woman on the sidelines (Chang, 2019). This fact alone partly explains the female underrepresentation in the sector: after all, labour economists have long pointed out that even without explicit discrimination, it becomes increasingly unlikely for women to enter an occupational field when the percentage of women already working in the field falls below certain statistical ‘tipping points’ (Pan, 2015). However, among US tech elites specifically, explicit and ideologically motivated gender discrimination is another likely factor at play. Since Trump’s second presidential inauguration, it has become increasingly evident that the Silicon Valley was never the progressive stronghold that many believed it to be, and that radical right-wing political ideology always had a foothold in it (Golumbia, 2024; Lewis, 2025; Vandiver, 2024). In this context, Lewis (2025) points out that there were already influential right-wing voices in the tech world of the 1990s – such as George Gilder, who spouted that ‘men were biologically and socially more suited to entrepreneurship than women’ and that tech entrepreneurship was a tool for ‘restoring the male breadwinner role in society’ (Lewis, 2025). Today, the leading figure on the intersection between the political right and the tech economy is undoubtedly investor Peter Thiel, who once co-founded PayPal with former DOGE director Elon Musk and who mentored the current vice president, J. D. Vance. For Thiel, the concept of being notoriously disruptive and anti-status-quo carries over from the operational sphere of investments into the political sphere, which causes him to question basic liberal values such as the belief in gender equality and to call instead for ‘hard men’ (Vandiver, 2024, p. 206) to solve overarching social problems.

In contrast to such eccentric and unapologetically chauvinist figures who have come to economic and political power in the US, German elites are traditionally considered more moderate and unadventurous. Over the last couple of decades, the structure of the economic elite in Germany has changed little – which fits the operational logic of the country’s dominant industrial companies centred around accepting slower growth rates in exchange for financial stability and incremental processes of innovation (Hall & Soskice, 2001; Sorge & Streeck, 2018). Hartmann (2002, 2016, 2018, 2020) has long demonstrated that German elites in all parts of society, but especially in the economy, are largely recruited from the upper classes. He therefore argues that an individual’s chances of getting into positions of power are determined by the mastery of a class-specific habitus rather than by meritocratic achievement. Against this backdrop, elite start-up entrepreneurs in Germany make for an insightful study population. Structurally, they are sandwiched between the two contrasting institutional logics of the disruptive global tech economy and the slow-paced German economy (Hubrich, 2023; Nachtwey & Staab, 2020). In the context of a national economy that is perceived as increasingly stultified, tech entrepreneurs serve as a potential new source of elite legitimacy. After all, the figure of the self-made entrepreneur is generally much more appealing than that of the appointed manager (Kantola & Kuusela, 2019; Sherman, 2017, p. 9).

In a first quantitative overview study on the field, Hubrich and Staab (2024) have surveyed the CVs of the elites of Germany’s digital economy, including both start-up leaders and those responsible for the digitalization of established companies. They found that in terms of educational and career paths, Germany’s tech elites still largely adhere to the established national patterns that have been repeatedly pointed out by Hartmann over the last couple of decades. In assessing the networks of elites in the digital economy, they demonstrated that such networks are dominated by companies founded in the 19th or early 20th centuries, while the CEOs of younger companies clearly remain on the margins of the network. Overall, German tech entrepreneurs are thus in a structurally much weaker position than their American counterparts. Nevertheless, it should be kept in mind that the entrepreneurs studied in this article lead and partly own companies typically valued in the realm of 1 billion dollars – they are therefore still in social positions ‘from which they can look down upon, so to speak, and by their decisions mightily affect, the everyday worlds of ordinary men and women’ (Mills, 1956/2000, p. 3). This begs the question: How do the German tech elites view their own biographies and how do they present and legitimize their own positions of power within the German economy? Are they copycats of the eccentric Silicon Valley tycoons, or do they follow the established German paths of elite formation and elite legitimization?

Methodology

The most prominent and reputable marker of entrepreneurial achievement in the start-up economy is belonging to the club of so-called ‘unicorns’ – which means having founded a company valued at over 1 billion dollars. The bulk of elite individuals relevant to this study therefore consists of the 62 currently active founders or CEOs of German unicorns (own research based on deutsche-startups.de, 2024). Additionally, 32 other entrepreneurs whose companies are below that threshold, but who are influential in the German digital economy through activities in associations, public consultation bodies, or as serial entrepreneurs, were also identified as relevant elites. Based on this positional definition, the basic population of relevant entrepreneurial elites consists of 94 persons overall, who were each contacted up to three times to request an interview. Sixteen of them agreed to interviews, which took place in the first half of 2024. To verify the completeness of the typology laid out later in this article, the analysis was then extended to 10 more individuals who were not willing to be interviewed, but whose cases could be reconstructed through publicly available narrative data (e.g. published autobiographies or appearances in long podcast interviews). Overall, therefore, 26 elite individuals out of the 94 that are of primary interest for this study were surveyed. Table A1 in the Appendix lists all surveyed cases and their relevant sources of power.

To analytically access biographical narrations and the symbolic functions they fulfil, this study adopts the methodological framework for biographical research developed by Bogner and Rosenthal (2023), whose approach is based on the figurational tradition of Elias (1982a, 1982b). In this framework, it is assumed that biographies are never objective accounts of all the factors that shape an individual’s life course; rather, overarching social structures of power inequality consciously and unconsciously shape an individual’s understanding of his or her own biography. Social-constructivist biographical methods take ‘the subjective experiences and perspectives of the actors as the starting point of the analysis’ to ‘reconstruct[] their life history and its genesis’ (Bogner & Rosenthal, 2023, p. 569). However, these ‘biographical self-presentations’ are then to be situated ‘in the light of the relevant social figurations’ (Bogner & Rosenthal, 2023, p. 573), meaning that they need to be interpreted in the context of the structures of inequality in a given field. One of the most productive ways to do this, as proposed by Bogner and Rosenthal (2023, p. 569), is to empirically include the perspectives of agents structurally different from those in power positions as a method to avoid the ‘perpetuation of the dominant myths’. In the German tech economy, it is obvious which perspective is missing: the female one. All but one of the elite individuals interviewed for this study were men. This is due to the very clearly gendered structure of the field: there is not even one woman among the 62 founders of German unicorns that are still active in the management of the company today. The very few women who occupy elite positions in the field do so via their activities in associations or consultation bodies. ¹

In social-constructivist biographical research, optimal data on a person’s life stem from narrative, autonomously structured self-representations. Ideally, such data are gathered in hours-long interviews, spanning multiple visits to build trust with the respondent and give space to less immediately accessible thoughts and feelings (Rosenthal, 2015, pp. 170–173). In surveys of elites, however, this sort of interview condition is almost impossible to come by systematically, considering that the very nature of economic power positions grants their occupants little time as well as little reason to trust outsiders. In the context of this study, some entrepreneurs were willing to invite me to their home or office and sit down with me for more than an hour, but most preferred an online interview with a time limit of 30–45 minutes. The primary methodical challenge in this context was to still invoke narrative responses and encourage long answers instead of taking part in fast-paced question-and-answer games. In this short timeframe, it was certainly not possible to dig up long buried memories and feelings. However, this was not a principal methodical concern, since the sociological interest of this study lies precisely in which narrations of their lives the surveyed entrepreneurs spontaneously had at the ready.

Empirical analysis

The overarching narrative, presented in all the interviewed entrepreneurs’ life stories, is that of a self-assessment as outsiders. In this section, the two typified ways in which this outsider-story is narrated will be analytically spelled out. The first one relates to social upbringing, while the second relates to the institutional setting that shapes traditional elite careers. Finally, these two types will be juxtaposed by an account of the experiences of the only female interview participant, which will highlight the distortions in the dominant accounts.

Social outsiders

By the term ‘social outsiders’ this study refers to entrepreneurs who tell a life story of non-belonging to the established German elite that centres on their own social upbringing. In some cases, these men completed a veritably long and hard climb up the social ladder. For example, Uwe grew up in a rural area in the Palatinate, where ‘money was tight’ (5) ² as his father failed in running his own restaurant and then became a waiter, while his mother was a housewife. Similarly, Markus (11) grew up near Cologne with a single mother who worked as a dancer, and his father did not pay his child support dues. Today, Uwe is the CEO of a unicorn, while Markus chairs one of the largest VC (venture capital) firms in Germany. However, there are also those social outsiders who were born into well-educated and economically comfortable middle-class households, but still obsess over upward social mobility into the elite. Thomas (2) grew up in a suburb of Nuremberg, where his father was a graduate engineer at Siemens and his mother studied English literature before becoming a housewife. Jan’s (16) father was a dentist in Stuttgart, and his mother was a mid-level municipal civil servant there. Both told me that their lives revolved around an obsessive competitiveness described as ‘bordering on self-abandonment’ (Thomas/2) or ‘bordering on being a workaholic’ (Jan/16). While neither of them could articulate the source of this obsessiveness, it is probable that a sense of comparison to the ultra-wealthy and a desire to set themselves apart from families that are happy with what they have play a role.

Social outsiders strongly identify with their achieved social ascent and are openly proud of their entrepreneurial success. Thomas, for example, unsolicitedly told me that his personal net worth was between 100 and 200 million euros. However, they emphasize different aspects of their social climb in their biographical narratives. Among the social outsiders, one can distinguish between those who are what Sherman (2017) calls ‘downwards oriented’ and ‘upwards oriented’. The downwards oriented types omit any difficulties they faced in comparison to those from more privileged backgrounds in their self-presentations, and instead focus on the demarcation against the lower class from which they themselves originate. Markus, who radiated confidence throughout our entire interview, became quite taciturn and started nervously shuffling around in his seat when I asked him about his social upbringing, and all he told me was: ‘If I had needed help, I wouldn’t have made it’ (11). Similarly, Uwe sees himself as someone who has made it from a ‘confined’ small town to the ‘big world’, in contrast to his siblings, ‘who still live there and who, with their children, will probably always stay in that area, because I suppose they – well, it is also beautiful, but it is of course very constricted if you only see that setting’ (5).

The upwards oriented types, by contrast, tend to represent their own social backgrounds as a merely ‘average’ situation, from which they then heroically emancipated themselves as a feat of pure merit. For example, despite his arguably somewhat sheltered social background as a son of Siemens engineer (a respected and well-paid job in Germany), Thomas said that his parents ‘never really had any big achievements’, considering that his father ‘wasn’t even a team leader or something, just an engineer’ (2). While for the downwards oriented social outsiders, educational success was an important goal early on in their lives, the upwards oriented ones rebelled against their middle-class parents by neglecting school as teenagers. Thomas, for example, almost dropped out of high school because of obsessive gaming. He only sharpened his sense of social comparison and his drive for success when he studied business at a private university, where he felt that he was excluded from an ‘in group’, which consisted of students whose fathers occupied board positions in some of the largest German companies: ‘You really notice that there is kind of a group, where, I don’t know, it’s just – they all went to grammar schools in England or Switzerland and so on . . . . And I never really felt part of that and, uhm, I always thought that whole thing was stupid. And then I also kind of wanted to be better than them’ (2).

Social outsiders are strongly opinionated regarding questions of social inequality, and typically produced elaborate and emotional responses whenever this topic was touched upon in my interviews. In the opinion of Markus, the German educational system and popular culture propagate a ‘culture of envy’ (11) directed against the wealthy, and therefore fail to offer any encouragement for working hard. This opinion shapes his worldview, which tends to be merciless towards the less fortunate: ‘I have earned every Euro that I have by myself . . . and I’m not willing to share any of it!’ (11). Similarly, Jan was strongly shaped by his work experience with a large American tech company, where he was positively impressed by the work effort of his colleagues that made him view the working conditions at most German companies as overly ‘cosy’ (16). In sharp contrast to this, Thomas thinks of class inequality as an important social problem and advocates for a 100% inheritance tax. However, he was the only one in the survey who explicitly favours such redistribution measures. For all other social outsiders, most problems in the German economy (and implicitly, in German society at large) come down to the issue that everyone else simply is not working as hard as themselves.

Institutional outsiders

By the term ‘institutional outsiders’ this study refers to entrepreneurs who tell a life story of non-belonging to the established German elite, who omit any decided accounts of their social backgrounds and instead focus on not following traditional institutional paths towards elite positions. This type includes heirs of ultra-wealthy families who want to tell an outsider-story despite their privileged social upbringing; but it also encompasses individuals with various social backgrounds from middle and lower classes who simply do not attribute a high relevance to their own upbringing.

For the offspring of ultra-wealthy families, starting their own business is not primarily a question of financial gain. Rather, start-up entrepreneurship seems to provide important psychological relief for those who struggle in measuring up against strict familial expectations of being a successful and industrious businessman. For example, Alexander (10) was born in Munich, and his family owns and manages one of the oldest, largest insurance brokers in Germany. He says that he comes from ‘a very traditional family with very traditional values’ (10), revolving around conservatism, decency and hard work. His life, then, seems to be about finding a creative way to live up to these values. Alexander had ‘massive disciplinary problems’ (10) in grammar school, where the principal once sat him down to inform him that he was the worst student the school had had in the past decade. Such problems of adaptation to hierarchical settings continued in later stages of his life, and he ascribes this to the notion that he has ‘always had problems with weak authorities’ (10). Unlike his brother, his father, and his grandfather, Alexander did not earn a doctorate in law. He studied business administration instead and tried out different salaried positions: ‘I’ve kind of worked in consulting, in corporate, I have worked at a large law office. And . . . I’ve never really enjoyed it anywhere’ (10). Relief came when a childhood friend approached him to found a start-up in Berlin together. No longer constrained by ‘weak authorities’, Alexander describes that here he was finally able to freely follow his own innate ‘ambition’, which he considers one of his ‘most outstanding features’ (10). The former troublemaker of the family had thus finally grown into an appropriate power position for himself.

However, there are also institutional outsiders from lower- and middle-class backgrounds who simply do not see their own class background as something that particularly shaped their biography. Torsten’s (7) father was a municipal civil servant in Kassel and his mother was a nurse, Hans’ (9) parents ran a family-owned bakery in Dresden. Both of them tell a life story that centres on having fun with what they do rather than following an overarching ambition to earn a place in society’s top ranks. Torsten, for example, started to teach himself programming in the 1990s to automate some tasks for a play-by-email video game that he was heavily invested in as a teenager. He then focused on being the lead e-guitarist of a band for a year and, due to that, had to repeat his last year of secondary school. After school, Torsten studied engineering, but dropped out of his degree programme after two and a half years as he was focused on working as a freelance programmer at the time. When he was 30 years old, he graduated with a media management degree from a relatively unknown university, which he picked because it was an easy degree to complete on the side. Eventually, Torsten ended up managing two different software companies valued at more than a billion dollars each, and he explains his career success as follows: ‘Well, I tend to take things to an extreme when I’m having fun with it – which is disastrous if you’re doing something wrong in the sense of that society doesn’t reward it, and which is quite good if it happens to be something that, um, works’ (7).

Hans also came to his entrepreneurial pathway quite serendipitously and relatively late in his career. He holds a PhD in economics and was working as a postdoctoral researcher at Dresden university when he got together with one of his later co-founders, a computer scientist, through an interdisciplinary research project. The project entailed the development of a software tool for corporate communications. As this software tool had promising commercial uses and they were both ‘tired’ (9) of academia with its publication pressures, strong hierarchies and bureaucratic processes, Hans and his colleague decided to found an independent start-up. Even though their first start-up eventually failed due to lack of market demand, Hans and his co-founder enjoyed the process of working autonomously so much that they decided to try a second time with a different software tool and this time were successful.

Overall, institutional outsiders come to elite positions by less straightforward paths than social outsiders. In the interviews conducted for this study, they were much less worried about presenting themselves as hard workers, and their responses on questions of social inequality were less emotional and less elaborate than those of social outsiders. When I asked Torsten about the social impact of digitalization, he responded that he does not consider himself the right person to answer that question, as he is ‘a kind of person who somewhat has blinkers on – in the sense of that when I do something, I always fully focus on it and don’t really think about it too much, not looking to the left or right’ (7). In general, institutional outsiders believe that digitalization will have win-win effects for everyone in society in the long-term, and that any concerns about it are simply short-term problems in taking everyone along. They adhere to a solutionist ethic (Nachtwey & Seidl, 2023), meaning they think that most issues in society should be solved through new technologies pioneered by businesses. This optimistic worldview comes with a certain naivety regarding social power dynamics. For example, on the topic of getting investors on board for his now billion-dollar company, Hans said that he ‘found the whole procedure to be extremely accessible, i.e., you have an idea . . . and there’s practically nothing stopping you from checking out this idea as well as possible, and then going around with this idea and collecting money’ (9).

Gatekeeping against female entrepreneurs

In the previous section, Hans (9) described VC funding as ‘extremely accessible’. Considering that there is not a single unicorn in Germany that was founded and is still led by a woman, such an assessment is doubtful. To contrast and contextualize the subjective accounts laid out above, therefore, this section discusses the case of Anne (13). She is the only female interviewee in this study, and she has recently decided to retreat from the entrepreneurial path. ³ Anne’s parents were both university professors in northern Germany, and she herself originally aimed for an academic career as well, holding a doctorate in computer science. When she worked as a researcher at the Technical University of Darmstadt, she became a team leader in the context of a larger federally funded project. Her team developed algorithmic software that companies could use to automatically gather market data for the optimization of their prices. Anne presented this software at industrial fairs such as the Hannover Messe, where established German companies showed strong interest in it and encouraged her to go into business with it for herself. To capitalize on what seemed like a once-in-a-lifetime opportunity, Anne and two of her (female) research staff members decided to break out of their foreseen career paths and found a start-up instead. After financing their first year on public grants and loans, a VC firm bought into the company.

Up to this point, it is to be noted, Anne’s biography fits perfectly into the type of the institutional outsider laid out above. Her case, however, took a different direction when the VC got involved in her company. Anne and her founding team had the impression that women were ‘not taken particularly seriously by investors’ (13). While no contempt towards women was ever expressed openly, it was noticeable ‘in dealing with each other’ that ‘there are obviously reservations’ (13). In Anne’s view, these reservations about women were the reason that the investors installed a new – male – CEO for the start-up. The new CEO, backed by the investing VC firm, then went on to negotiate sales contracts without consulting the majority female technical staff led by Anne. By vastly exaggerating the scope of the start-up’s software, the new CEO managed to win major customers. However, the contractually fixed requirements of these new customers were predictably not feasible for Anne’s company in terms of technology and personnel. In the attempt to make up for that and somehow satisfy customer demand, Anne worked up to 80 hours weekly for years. In this context, she noted that ‘it is quite hard to reconcile having a family and entrepreneurship’, and that ‘if you don’t have the right environment, you have to choose one of the two things’ (13) – voicing an issue that none of the men interviewed for this study brought up. In the end, Anne’s start-up was acquired by a large US-based company for a relatively low price. Anne became disillusioned by the business world, and (with great effort) managed to transition back into an academic career.

Although this is just a single case, it exemplifies the structural mechanisms central to the marginalization of women within the German tech elite. Acker (1990) has analysed how in large corporations, jobs are fundamentally conceptualized in such a way that the ideal worker is a ‘male worker whose life focuses on his full-time, life-long job, while his wife or another woman takes care of his personal needs and children’ (p. 149). In the tech world, gatekeeping of elite positions no longer works through formal hierarchies within large companies, but rather through VC investment decisions. The theory section of this study described that the operational logic of these investments is tailored towards fast-scaling growth and that this shapes who is viewed as a promising entrepreneur. In this context, images of the ideal entrepreneur are tied to personal characteristics culturally coded as classically masculine – such as assertiveness, action-orientation, self-reliance and untamedness. Considering that in most organizational dynamics, ‘men are actors, women the emotion support’ (Acker, 1990, p. 147), there is a stigma attached to femininity that seems insurmountable to some VC investors. It is therefore to be argued that Anne’s case of a VC-favoured male CEO making uninformed big picture decisions while the female founders of the company were demoted to support roles is likely not a coincidental or idiosyncratic experience. In fact, the most unique aspect of Anne’s case might be that she even stuck around for so long to keep the company alive with her technical expertise, given that in most situations where women hit such hard glass ceilings, ‘withdrawal’ is the most obvious career strategy (Tomlinson et al., 2013).

Discussion

This study analyses how the elites of the German start-up economy cast themselves as dynamic outsiders who started a company so that they could play by their own rules. The surveyed entrepreneurs tell a life story of non-belonging to the established structures of society that has led them to start their own companies, as is denoted by the recurring theme of having some kind of struggle in school as a mildly rebellious teenager. This life story is told in two typified ways. For social outsiders, the experience of non-belonging narratively relates to their own social mobility, while for institutional outsiders, it relates to the setting of the German economy that shapes more traditional careers. Social outsiders strongly identify with their upwards social mobility and present themselves as meriting success because they work harder than everyone else. Institutional outsiders, in contrast, tend to present their meritocratic legitimacy as self-evident, and view their current position in society as an accidental result of following a life goal that is not oriented towards social status, such as taking social responsibility or simply wanting to have fun in their job.

It was argued that this dominant self-portrayal as an outsider is to be understood in relation to the operational logic of investments in the tech economy, which heavily favours entrepreneurs who present themselves as assertive challengers of the status quo. In the US, the tech sector has grown so powerful that it has come to subvert classical overarching patterns of elite legitimization, both in the entitled mode described by Mills (1956/2000), as well as the more liberal and self-conscious mode observed by S. R. Khan (2012). German tech elites are dependent on global investment chains dominated by US firms, and therefore share their emphasis on being different from established elites with their American counterparts. However, none of the entrepreneurs surveyed in this study indicated any leanings towards the alt-right, and a lot of them seemed quite sincerely concerned with issues of social inequality. To my knowledge, there are also no large-scale attempts at political power grabs by German tech entrepreneurs. In this regard, the subjectivities of the studied tech elites fit their sandwiched position between the global tech economy and the German elite structure: they borrow the ‘disruption’ rhetoric from the globally leading US tech sector but adapt it to a specific national context by toning it down to a much milder version.

However, the outsider-story described in this study should not to be taken as describing the social reality of the field, but rather as a type of self-presentation that fulfils a certain symbolic function in a given institutional context. To be able to tell this story, the social position of the outsider is narratively appropriated and subverted. In their classical study on The Established and the Outsiders, Elias and Scotson (1994) emphasized that neither of these groups comes to their status through deliberate choices of their own. Rather, the established and the outsiders constitute each other in a ‘double bound’ (Elias & Scotson, 1994, p. xxxi) process. In this process, the established group forms a cohesive identity because it feels threatened by the mere existence of individuals structurally different from themselves. The established group thus starts to ascribe its members ‘superior human characteristics’ (Elias & Scotson, 1994, p. xvi) while stigmatizing anyone not belonging to its own group. For Elias and Scotson, then, the outsider group is only constituted through this shared painful experience of continuous stigmatization.

Recalling that this is what being an ‘outsider’ actually means in a sociological sense and relating it to the empirical material of this study, it is striking that none of the men surveyed here reported ever actually being stigmatized. On the contrary, most of them had the experience that large amounts of VC funding were naturally available to them whenever they had a good idea and worked hard. In their biographical accounts, they like to play with the image of social deviance, but the reported instances of it were never consequential – for example, despite the frequency of the theme of having trouble in school, no one in the survey ever actually dropped out of school. As much as the self-presentation as an outsider might be functionally necessary, it must therefore inherently remain oblivious to existing structures of inequality. Such structures of inequality nevertheless exist in the sector, as was demonstrated in this article by juxtaposing the dominant male accounts of the field with the experience of the one female entrepreneur interviewed in this study. In her case, as soon as VC got involved in the company, the female founding staff got demoted to the role of technical support. In their place, a new male CEO was installed, who then made overly confident and unrealistic promises to customers, leaving the worry over how these promises were to be operationally fulfilled to the female technology experts of the company. While this single case is not a substitute for a more systematic analysis of gendered VC funding structures (that topic goes beyond the scope of this article), it already demonstrates the structural inequality mechanism that makes femininity a stigma in the tech world precisely because of the idealized image of entrepreneurship that follows from the operational logic of the sector. Overall, therefore, it is to be concluded that the German tech elites’ self-representations as outsiders serve a necessary symbolic function given the institutional context of their sector – but that in fulfilling this function, they must at the same time disregard and subvert the structures of inequality that exist in their field.