

Lifestyle business, defined - adib
http://cubic-m.blogspot.com/2011/03/lifestyle-business-defined.html

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wheels
There are three different things that I've heard it mean:

• A business that is meant to support a particular lifestyle of its
stakeholders, and would not risk that lifestyle for higher growth. This is the
proper and non-derogatory meaning.

• A small business. Usually one that has something in its DNA to keep it small
– market size, product focus, etc. These businesses would often be hurt rather
than helped by a capital injection and accompanying expectations.

• The thing a bootstrapping startup gets called after "ramen profitable". The
founders still aim for high-growth, but without external capital. Here the
term is damning by faint praise.

They're all businesses that at a given point may be about the same size, but
the term becomes condescending as you move along the spectrum above towards
the second and third instances where the _goal_ is not to be a _lifestyle
business_.

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jswinghammer
I run a lifestyle business and I don't think anyone would say anything bad
about it including VCs. I just think they probably wouldn't want to invest in
it. That's cool with me because I'm not sure I would want investment in this
particular business. I escalate my goals with it after meeting each new goal
but I don't think I want to sell it or go public ever. I just want to run a
profitable business that makes my customers happy. I end up reading a lot of
VC news and blogs and I never feel like anyone is putting me down or
discouraging me from doing what I'm doing.

I do my thing and they do their thing. That's the end of it.

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Sukotto
I'd like to read about your experiences. Do you have a blog?

I'd like to see more posts on HN about small lifestyle businesses (which I
define as "generates enough money to comfortably support the owner's desired
lifestyle") since it's the path I'm aiming for myself.

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jswinghammer
Nah. If I spent any time on a blog I wouldn't have time for my family or any
of the other things I have going on. Maybe in a few years :)

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noodle
i always felt that "lifestyle business" implied a business that not only was
bootstrapped, but also wasn't really high growth/pressure. something that you
could do to make a living and spend your time however you like, not something
you push really hard to grow and succeed like you would with a standard
startup, bootstrapped or no.

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atgm
So a "lifestyle business" is a business that's not governed by the "business
lifestyle" mentality?

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noodle
i'd say that it is not necessarily governed by it. it could be, if you want it
to be. or not. its that flexibility that defines it, more than anything else,
imo.

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bugsy
I agree with the referenced article, the term has been devised to be
derogatory. In the past these sorts of businesses, with no VC ownership, were
called software companies. Now they are called "lifestyle businesses", a term
that calls to mind a precious hobby, but one that is not taken seriously by
customer, the market, or even the owner. Hearing that the business is not a
serious one but just a means to leisure, customers get the message that when
the owner tires of his hobby he will move on, and customer support is at the
whim of his leisurely schedule.

I don't use the term. I call it a software business. Call it an independently
owned small software business if you like, but lifestyle business is
definitely a derogatory term carefully chosen to make independent software
companies seem non-serious.

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thekevan
Corporate fool here.

I take issue with the use of "derogatory". I would be ecstatic if I could
bootstrap a startup into providing myself with $100k+ per year, with no
potential for substantial growth from there.

My impression was that the term also strongly implied that the business owner
had the freedom of spending their time how they liked. I have a friend who
lives relatively comfortably and does freelance development. If he wants to
work 16 hours one day on a cool project and take a long weekend for some
biking or hiking, he can. He isn't going to be a rich, rich man in terms of
money anytime soon, but he is not wanting of much, either. He is happy,
satisfied, locally respected, relatively stress free and content. That sounds
like a lifestyle I would enjoy.

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nadam
"I would be ecstatic if I could bootstrap a startup into providing myself with
$100k+ per year"

Me too, except that I would prefer that 100k to be (relatively) passive
income. With passive invcome it is easier to be creative, innovate an existing
product without too much time pressure, learn etc... Freelancing does not
differ from corporate work that much (except if you earn so much money that
you have to work less.)

~~~
il
One of the things I've learned through years of bootstrapping is that there's
no such thing as truly passive income(other than investments). There's always
something demanding your attention.

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thekevan
I imagine that is true but I am striving for something less "active". I work
45 hours a week for an upper middle class income. But including the commute,
the inflexibility of 9-5 and being just plain drained from working in an
uninspiring environment, it feels like 60 hours a week. I'd be ecstatic with a
30 hour a week business of my own at the same income level. (Of course maybe
I'd start a second business with that extra 30 hours...)

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bradya
My feelings are almost exactly the same. I work 60+ hours a week and make an
upper middle class income. I'm trying my hardest to change that because I'd
like to have time to enjoy life while I'm young (I'm 23).

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georgieporgie
Here's an alternative: save as much money as you can. This buys you tremendous
flexibility when you're in your 30's (compounding interest plus a healthy
savings buffer).

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nadam
I agree. Also if a business seems to be 'lifestyle business' at a moment
(whathever this means) it does not necessarily mean that it cannot grow huge.
(E.g.: Ikea, Microsoft)

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davidw
I just don't see the "plot" by VC's.

A lifestyle business is one that isn't meant to grow beyond a certain point
because it's "enough". Obviously, a business like that is not likely to
"change the world" ala Google or Apple or something, but it's probably more
realistic for many of us.

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wyclif
It's not a plot, just a derogatory term they use to belittle a trend they are
most definitely not happy about.

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davidw
I don't think they really give a rat's ass. There have always been small
businesses. It's not something VC's invest in. If the economics of industries
change, so be it; VC's will always have to seek out those industries where a
big injection of capital makes success more likely. I know, you know, and they
know that, so it's not some trend they need to quash, just a fact of life they
will need to deal with.

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hemancuso
If you want to tell people you've got a great lifestyle business but don't
want the baggage - tell them you run a "small business" or a "small software
company."

"Lifestyle business" focuses on what you're not rather than what you are. It
is loaded with all sorts of "no ambition" or "that's nice, son" connotations.

"Small software company" is something most people can understand and
appreciate. Even VCs.

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gerner
I've been at four startups. Of the ventures, one of the two with investment is
successful, the rest are not.

I can't know if the secret ingredient is having a VC. But having someone whose
interests are aligned, has experience in the industry, and can contribute more
than just sweat seems really valuable. Maybe that's not every VC (good god, if
it's not find someone else!). But that seems like a requirement for a good
investor.

