
Mojito island is a mirage - craigbellot
http://37signals.com/svn/posts/1930-mojito-island-is-a-mirage
======
jgrahamc
_In short, the bliss of selling and giving up your business is overrated. It’s
a long life and it’s often best spent enduring the ups and downs of pursuing
something of significance. Don’t be so eager to give it up._

Hmm. Recent posts seem to be 37Signals attempting to rationalize their
business model vs. recent sell outs for large amounts of money.

I'll stand up and say I'd happily take a $40m pay out so that I could be
completely financially secure and get to do what I want. I have a short list
of things that I would be very happy doing other than working for money.

To quote Einstein: "We act as though comfort and luxury were the chief
requirements of life, when all that we need to make us happy is something to
be enthusiastic about."

But I'll take the comfort of knowing that I don't have to work, and get on
with the cool stuff.

~~~
compay
"I'll stand up and say I'd happily take a $40m pay out so that I could be
completely financially secure and get to do what I want."

I agree. Just because you cash out doesn't mean you have to retire.

~~~
tonystubblebine
Are people sure that the principals at 37s haven't just taken $40M out of
earnings? Selling your company isn't the only way to get paid.

~~~
pyre
Does 37signals even make $40M in revenue?

~~~
fizx
DHH's car says so:

<http://www.flickr.com/photos/symmetricalism/2860363997/>

;)

~~~
jgrahamc
Reminds me of a great Alain de Botton quote:
<http://twitter.com/alaindebotton/status/2781110491>

------
mikeryan
In this thread

<http://news.ycombinator.com/item?id=829583>

Jason from 37signals said they'd have a post that FU money is a myth. I hope
this isn't it.

The point of FU money isn't that you'd actually quit everything and walk away.
Its about the ABILITY to do so. Once you reach this point everything else is
about being able to make your own choices, not being backed into a corner
because you have bills to pay.

~~~
jasonfried
"Once you reach this point everything else is about being able to make your
own choices, not being backed into a corner because you have bills to pay."

You're an individual. You can already make your own choices.

My big problem with this whole "FU" money concept, and your thought I quoted
above, is that people seem to think they need to get this opportunity from
someone else. That someone else gives them the opportunity to do what they
want to do. That someone else is the one who gives them the money. If you
continue to think like this then that's exactly what'll happen - you'll be
unable to make your own choices because you are waiting for someone else to
make them for you.

I do hope to post more on this shortly.

~~~
calambrac
_My big problem with this whole "FU" money concept, and your thought I quoted
above, is that people seem to think they need to get this opportunity from
someone else._

That makes no sense. Of course you need to get that opportunity from someone
else: your customers, your family, your investors, or your buyer, whoever is
handing you the money you need to meet your needs. At the end of the day, if
someone else hasn't given it to you, you aren't getting it.

~~~
jasonfried
I was alluding to a big external event (investment, sale, IPO, liquidation),
not to the day-to-day exchanges that are part of your business (selling
product, offering services, etc). You can do anything you want on your own
without the blessing of someone with a lot more money than you.

~~~
calambrac
I know what you're alluding to, I'm just saying it's an arbitrary distinction.
There's absolutely no reason taking a giant payday from a single source is
somehow inferior to taking money from thousands of customers in terms of your
personal freedom.

------
natrius
This makes no sense. I don't understand why the 37signals folks seem to
willfully ignore that the amount of money that a successful acquisition gives
a founder means you can do whatever you want for the rest of your life,
_including solving interesting problems_. You can even solve interesting
problems that aren't profitable to solve. Unless the company is almost
guaranteed to be valuable enough for the foreseeable future that a sale (or
other exit) will make you financially independent (e.g. Facebook), there comes
a point where it is clearly better to sell the company.

Since the Mint acquisition seems to have inspired this series of posts, let's
take a look at it. Mint is successful because banks have crappy online
products. Banks are perfectly positioned to end Mint's customer growth, and
there are several other competitors in the industry as well. There is not a
particularly high chance that Mint will still be successful in 5-10 years. If
it is successful, the marginal utility of the increased worth for the founders
declines pretty rapidly. Selling now seems like it was clearly the best idea,
and disproving that is going to take more than the false dichotomy this post
presents.

------
alex_c
This post seems to make two separate arguments:

1) A driven individual won't be content to idle if they get a big exit, they
will likely jump right back in. If you think what you want is an eternal
vacation, you're probably wrong.

2) Therefore, a driven individual shouldn't pursue a big exit, if they already
enjoy what they're doing, because they'll just jump back in.

I agree with 1), but not with 2). I enjoy what I'm doing, but the list of
things I want to do is growing at a faster pace than my ability to work on
them. I'm just not built for the "one true lifelong obsession" model.

Edit: the more I think about it, the more I realize why this post bothers me.

I'm really starting to think that 37s and HN are preaching to completely
different choirs - which is strange, given how well 37s posts do here.

Some people thrive on routine and order. They love to get up in the morning
and know what they'll do that day. To have a successful system figured out,
and to follow it. And yes, there are always new challenges, and yes, the
system is continuously improved - but to some extent, it's routine.

Others thrive on tackling the unknown. That initial rush of carving out an
answer, starting with a blank slate. The uncertainty of not knowing what
you're doing, the high chance of failure, but also the joy of not being
constrained by what came before you.

In programming terms, it's the difference between maintaining code and
starting a new project. Some people obviously enjoy one more than the other.

Seems to me like 37signals is preaching code maintenance over starting new
projects. Sure, in many cases that makes a lot of sense, but which one's more
FUN?

------
tptacek
The bliss of knowing that your kids college tuition is fully paid for, no
matter where they get accepted, is _not_ overrated. Thinking like DHH indulges
in this post is a luxury.

~~~
replicatorblog
Exactly.

DHH is confusing a life of relaxation with the security that comes with a big
payday. It's less about sipping mojitos and more the ability to pay for
college, mortgage, retirement, and relieving the stress all those things
bring.

The tradeoff he proposes is a straw man: "Pull a few million from revenue each
year or take a lump sum". Is this realistic in most cases? If Mint turned down
Intuit, they could have bought Wesabe and reduced the value of Mint
significantly. Given Mint's light revenue, how long would it have taken to
achieve the same financial outcome? Would a VC ok salaries of millions per
year in the near future?

I know the 37 Signals guys are anti-VC, but it is a real, lucrative, and
demonstrable way to create wealth. I get that they dislike it, but I don't see
the boot strapped software business being a real competitor. They do it,
Craigslist does it, but not sure if there is the same portfolio of success in
that system as in the VC system.

~~~
tjogin
> I know the 37 Signals guys are anti-VC, but it is a real, lucrative, and
> demonstrable way to create wealth.

I think their point is exactly that it isn't. DHH gave a talk at Startup
School 08 ([http://www.omnisio.com/startupschool08/david-heinemeier-
hans...](http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-
startup-school-08)) wherein he likened that kind of big exit to winning the
lottery.

I think this is the point they're trying to make: you're much better off
trying to build a business than to try to win the lottery.

~~~
replicatorblog
By demonstrable I mean we can point to 100-200 companies in a ten year period
that took VC and had respectable exits. There are probably more than that, but
there is a good sample size.

I agree that it is improbable, but still better than the lottery. My point was
that there are lots of well known examples from the VC route, but fewer
success stories in the 37 Signals mold. It also might just be that they are
lesser known, but instead of berating the VC industry maybe they could turn
their spotlight on exemplars in their model? 37S, Craigslist, Plenty of Fish,
are there a couple hundred bootstraped web startups that they could point to?

~~~
tjogin
100-200 companies in ten years doesn't sound like a lot. How many people won
the lottery during the same timeframe?

I think DHH has a point. While hoping for the big exit isn't exactly like
hoping to win the lottery, I'd say he's right that you stand a much better
chance of being able to build a profitable business.

I think there's probably a lot more than 100-200 web companies that have built
a profitable business that they're earning a very nice living from.

------
kaiuhl
_I don’t think that person exists as often as the idea of the artist-beneath-
the-suit would romance us to believe._

That's a huge assumption to write off the entire reason people would want to
sell their company–to pursue things other than money.

------
mtrichardson
My desire to grow a successful company and cash out is not because I want to
sit on some island - it's so I have more freedom and can get back in the game
again, the next time around with more experience.

I love my current company, I'm extremely passionate about it and what I do,
but I also know that it's not the last thing I'm going to do.

And I seriously doubt that I'm alone in this.

Whatever community they're trying to appeal to with this post, I don't think
it's this one.

------
adw
I want to work on interesting stuff. But...

Here's the fallacy. I don't believe that what our startup is doing is the only
interesting stuff I could be working on. Some of the interesting things I'd
like to do have no obvious, direct economic benefit. For example, there's a
bunch of important work which needs doing in emergency technologies which
isn't the kind of thing you can build into a scalable, VC-type business.

If I had the freedom from economic uncertainty to work on those problems, you
bet I'd consider it.

------
webwright
“So after a much-needed vacation, the retirement is canceled and they’re back
to start a new company. (Not always with as much passion as the first time
around, but that’s another story).”

But sometimes with twice the passion as the first time around. You should only
"rush to get out" if you've got something that you're really passionate about
to look forward to. I don't know virtually ANY entrepreneurs who envision a
life of pure leisure if/when they cash out. I personally have 2 or 3
companies/non-profits I'd LOVE to start and there are probably a few
(generally young) that I'd even take a job at, assuming that I'd have enough
autonomy to do cool stuff.

------
idlewords
Citing sports stars who came back from retirement in the context of this
argument is idiotic. In most professional sports, there is a point at which
your abilities start to decline due to age. The tension is between going out
at the absolute top of your game, vs. enjoying a few more years of something
you are supremely good at, and will never get to do again.

This whole premise for an essay is silly - if you are one of the tiny number
of people in a position to make this kind of choice, are you really going to
turn to some dude's blog post to make up your mind? But the sports comparison
puts it over the top.

------
gfodor
Mojito Island is also a strawman, apparently.

------
run4yourlives
Erm, this certainly isn't one of my favourite 37S posts.

I actually agree with them. I think building a "company" whose sole purpose is
to be sold, profitable or not is not as fulfilling as building a company that
is a company. I think most of us should be striving to build for long term
success.

That being said, even 37S needs to realize that building a company is a lot
more fun with $XX million in the bank than it is with $XX thousand. It's
certainly a lot more fun to do everything else in your life that way, like
raising a family, exploring the world doing whatever else it is that your
heart desires.

This is a rather weak post with a weak argument.

------
galactus
Contrary to some people here, I don't think DHH is arguing that taking a 40m
pay ouy is a bad thing by itself. He argues that it shouldn't be your primary
goal.

------
mattiss
A big exit gives you freedom from everything. Want to start a new venture? Do
it. Want to sail around the world? Go to town. Having to work every year,
albeit for 2 million a year, still means having to work.

------
callmeed
I think this is a good post. I also think the dialog is good for the
community.

With this and the related posts here, there seems to be a preoccupation with
_not working for the man_ (whoever that is) and not _having_ to work for
money. I think it's baloney and I've yet to hear a reasonable argument for
this stance.

If you have a startup, you're already not working for the man. If you took VC
and you feel they are _the man_ , well ... sorry, no one forced you to do it.

I wonder how many of the critics of this POV have had a growing, profitable
startup for more than a year.

------
dmv
I think the title is more clever than the article. Traditionally, a mirage is
a false vision of safety in a dangerous place. If the idea of Mojito Island
drives you to keep going in a hostile environment: great. I don't see the
suggestion that taking the payoff was the wrong thing, just that reality on
the other side did not meet expectations. Sure, it may not be what you wanted,
but if you walked that extra distance to get there, rather than giving up and
dying, where's the trouble?

------
ssharp
I always thought "mojito island" was a metaphor. It represents the freedom to
do what you want, where you want, and when you want.

That freedom often times is the same place you just came from, which shouldn't
be that surprising. The term "serial entrepreneur" exists because there are
enough of them. The thing that drove them the first time isn't likely to go
away. Although I'd imagine most of the end up with a better work/life balance
than they did during their first successful endeavor.

------
delld
Couldnt agree more.

We all find meaning in our work - entrepreneurs almost doubly so - and that
'meaning' is one of the biggest components of our individual happiness. When
you 'exit' your startup you also exit that 'meaning' - and then there is no
choice rather than to go back find it all over again.

------
jodrellblank
* It’s a long life and it’s often best spent enduring the ups and downs of pursuing something of significance. Don’t be so eager to give it up.*

I don't want to give it up, I want to give up _having to do it_.

~~~
cousin_it
Unfortunately, _doing_ is more intimately tied to _having to do_ than many
people realize. My login on Reddit is "want_to_want".

------
Poiesis
Look: if you love what you do (they seem to), and you make enough money at it
to be secure (they seem to), why would you "sell out"? Yeah, you could sell
out--but why?

~~~
anigbrowl
You might have other things you love to do but which are much less likely to
yield up the financial security you want (or need, if you have a family).
Suppose you want to dedicate yourself to, I don't know, singing opera. Maybe
you know you'll never make it big professionally but you'd like to run an
amateur opera company and perform moderately well for free. Or you want to run
a charity of some sort. Or paint. Or...

~~~
Poiesis
Yes, I get this. And if this applies, sure--take the money. I guess you
weren't doing what you wanted before. But what if you were _already_ doing
what you wanted? If you're lucky enough to wake up and do something you'd pay
to do--and get paid handsomely for it--why the heck would you want to stop for
more money?

Again--already making good money, already doing what you love: why stop?

~~~
dagw
Am I the only person who has several things I want to do? Even if I was making
$1million a year in my dream programming job I can totally see myself taking
the $40million, quitting that job and trying out starting up something with
one of the other things I want to do. Who knows I might even enjoy that more.

