

What is the point of building a business? - mattm
http://dyske.com/?view_id=921

======
modoc
Part of it is being my own boss, working on stuff I choose. But honestly a big
part of it is the potential for profits to scale independently of, or at least
at a very high ratio to, my effort/time.

Working for someone else you'll never make more than $X/year, where X is some
general high point for your position/field/location/etc... That could be $50k,
$100k, or $300k, but it's unlikely to be much higher (unless your position is
CEO, investment banker, or thief (wait is that two or three positions?)).

By building a business, my hope is that the business will expand, I'll hire
people, I'll have long term contracts, recurring revenue, and other mechanisms
in place that will allow me to work 40 hours a week and make $200k one year,
$500k the next, and so on. When you work for someone else in general your
income will be fixed to some hours*$Y formula. Building your own business can
free you from that limitation.

~~~
siculars
I could not agree more as starting your own venture is the ultimate
liberation. After spending many years working for someone else I have finally
decided to take the plunge and implement one of my ideas. I must say the
dreariness of the day-to-day working a job under management that sucks the fun
out of life has motivated me to make this decision.

modoc's earnings analysis should not be taken lightly. It is what separates
the working poor from the comfortably wealthy.

------
alanthonyc
To have _"a creative outlet that supports me financially"_ -pretty much sums
it up for me.

If I just wanted money, I'd just focus my energies on my current job/career.

~~~
patio11
I always wanted a job where I could get paid for thinking big thoughts and
sometimes writing about them. Then I found out that the jobs that fit that
description, such as "university professor", are typically scarce, highly
sought after, and guarded by layers upon layers of BS to protect the interests
of people who already have them. ("First, we're going to have you go through
seven years of indentured servitude for a _shot_ at getting one of these jobs.
Then, we're going to subject you to a toxic hothouse of petty politics about
trivial things.")

So I started a business to write my own job description: think big thoughts,
sometimes write about them, avoid BS to maximum extent possible. It turns out
this actually works.

~~~
Perceval
The indentured servitude can be cut pretty short if you go out and out to
apply yourself. If you get into a decent program, your Ph.D. will be fully
funded: a full ride plus a stipend for living costs. Unlike professional
education and masters degrees, Ph.D. programs realize that you'll never make
enough money as an academic to pay them back, so they actually pay for you in
the interests of reproducing academia.

You can get through your coursework in a year-and-a-half if you take courses
over the summer. Take your comps over the next sixth months, so that by the
beginning of your third year you're ABD ('all but done' or 'all but
dissertation'). You can write a dissertation in two years, one if you have an
amazing work ethic and an original idea going in.

It's not actually that terrible a proposition. Four years, getting paid
(although admittedly not a lot) to sit around reading lots of books that
you're interested in, write a couple seminar papers, and TA two or three
classes.

The petty politics, however, you will never have a chance of escaping. If you
want a job getting paid to sit around thinking interesting things, try a think
tank. I worked for two years as a research assistant at a major bipartisan
foreign policy think tank in Washington DC. Had a great experience.

------
toadpipe
Really thoughtful article about balancing money with other things,
purposelessness and self-discovery as a path to creativity, and creativity as
a business strategy. All the things he talks about that relate to my
experiences are dead on. I've had similar thoughts about keeping any business
I start private, and bootstrapping instead of seeking VC funding. Who wants to
optimize for current needs, or short term profits? I would much rather give
people something they can't even describe until they see it for the first
time. If it weren't for mathematicians who were mostly motivated by
aesthetics, we wouldn't even have computers.

It's interesting that he describes having a kid as a way of avoiding or
delaying self-exploration. I've found that self-exploration has been one of
the hardest things I've done, but by far the most helpful, although I think
that outside of solving personal problems the line between self-exploration
and other sorts of exploration starts to blur. It's really about the
exploration of appealing ideas for reasons that one probably can't explain to
anyone else.

~~~
dasil003
Yeah, this article concretized a lot of the types of thoughts I've been having
recently about how best to live my life. I'm preparing to found my own startup
in the next 2-3 years and determining my goals from the outset is incredibly
important.

All too often people are ideological about this subject. On the creative side
people say "don't sell out" and on the business side people condescendingly
say "oh, a _lifestyle_ business." I guess I can respect the creative ideology
a little more because it doesn't stem directly from greed, but I find both
positions ridiculous. I want to make enough money that I can own a nice modest
house without a mortgage, and that I can take my family on vacation anywhere
in the world 2 or 3 times a year, but I don't want to sacrifice my
relationships and the joy my work just to scale my business from $1m to $100m.

~~~
andymism
I agree that both positions are ridiculous. I also want to add that _all_
businesses are "lifestyle businesses." But it's how you define your lifestyle
that makes the difference. I'd rather run a small shop that allows me to pay
myself to build things, hack software, play with new technologies, and sleep
in. OTOH, someone else might want to fly all around the country, sit in
meeting after meeting, get on the cover of Forbes, and have fancy dinners
every night.

To each his own, but I'd much rather run a business that enables the former
than necessitates the latter.

But that raises a question, is it possible to take a business to scale without
sacrificing the things you loved to do yourself? Derek Sivers is one example--
he structured CDBaby so he could keep writing code most of the time and sold
it when the business wasn't fun for him anymore. Any other examples?

------
spc476
The author of the article seems to think that the only reason people take a
company public is for the money. Nope. A company can be forced to go public
(at least in the United States) if they meet certain criteria as set forth by
the SEC (I think that's the proper department). I do know that Microsoft put
off going public as long as possible, as well as Google.

~~~
apowell
I have never heard of this, but I'm fascinated. Can you provide more
information?

~~~
spc476
"But Gates was in no hurry for Microsoft to take this same rite of passage
[going public]. He did not want to open Microsoft's corporate doors to the
public. For one thing, the company did not need the instant infusion of cash
that a public offering would provide. It was making a great deal of money.
Pretax profits were running as high as thirty-four percent of revenues. And
remaining private had definite advantages. There were no sockholders to
please, no onerous filings with the Securities and Exchange Commission. The
only disadvantage was that Microsoft's key employees and managers who had been
getting stock options over the years had no tradable security....

"Reguardless of what Gates' wanted, however, his hand was about to be forced.
It was only a question of time until the day arrived when Microsoft would have
to offer its stock to the public. The 1934 Securities Exchange Act required
all companies to register and file public reports as soon as stock had been
distributed to 500 or more employees. As far back as 1983, Gates had projected
that Microsoft would reach that figure by 1986 or 1987...."

_Hard Drive: Bill Gates and the Making of the Microsoft Empire_ by James
Wallace & Jim Erickson, page 320.

For Google, just search for articles around the time they went public.

------
fuzzmeister
One of the best posts I've read in quite some time on HN - articulates what it
means to be an entrepreneur almost perfectly.

------
srid
The first answer that came to my mind is: money and fulfillment.

PS: How do I link words in HN? I meant to link 'fulfillment' to
<http://harmanjit.blogspot.com/2009/04/on-fulfillment.html>

~~~
jcl
You can't link words. But any URLs will automatically be linked to themselves.

------
herval
money, power, doing it my way, fun, fulfillment... and eventually, more money
:-)

------
charlesju
Because it's fun.

------
auston
Ikea.

~~~
auston
Let me elaborate, Ikea is a PRIVATELY owned $30-40 billion company.

