This reminds me of a DHH talk at startup school where he says it's not just about being "the next ... INSERT BILLION DOLLAR COMPANY HERE".
The funny thing is until I started reading HN I had no idea the extent to which people are out here building apps frantically for the "big exit".
When I read about how much 37signals get pissed off at being referred to as "a lifestyle business" I had no idea that this subculture chasing VC and Angel investing even existed.
I had a vague notion that people got investment but I feel a little uneasy about the way that young kids coming straight out of high school are being influenced by this culture.
Everyone just wants to "be an entrepreneur" and no-one really seems to know what that means. In most cases, business is about raising invoices, not capital.
It happens mostly in Silicon Valley because of the success enjoyed by some big companies that grew fast and became very profitable, like Amazon and Google.
Problem is, for every Google-like company, there are hundreds if not thousands that fail to make a profit and just disappear. On the other hand building a 37signals-like company is within reach of most talented people, but these stories aren't highlighted by the media (unless you have the oratory talent of DHH).
It took me years to unlearn the "get investment, get big exit" mentality and focus on a lifestyle business. Looking back, the thought of getting investors for my ideas is so ridiculous, but all you ever hear about are dumb ideas getting millions in funding. I just thought that's how it worked.
I swing more to lifestyles than jackpots, but a successful (for any definition of "successful") lifestyle business is a great place to try conquering the world from. A recurring theme for folks trying to shoot the moon is how much time fundraising takes up and how conflicts with investors can drive you under. If the rent is covered and salaries are already in the bank, you have a great fallback position. (BATNA is "We go back to where we were before we knew you. Oh, shucks, successful business." versus "We fail to make payroll and the bank repossesses my liver.")
An excellent point that seems to be under-emphasized. Instead of swinging for the fences on the first at-bat, focus on getting a man on base first. /cheesy metaphor
Also - building a lifestyle business is largely under your own control, if you work hard and have the least bit of talent you'll be able to make it work. Hitting the jackpot is much more a matter of things outside your control, even though you work hard the odds are stacked against you and you'll probably fail.
> "Hitting the jackpot is much more a matter of things outside your control"
It seems like this is even more true in the last few years, when company after company with no users, no business gets acquired, then shut down by the acquirer.
I've not watched it yet (going to do that shortly whilst grabbing lunch), but I'm really looking forward to watching this particular interview as it strikes me as very much in line with some of the changes in my own thinking in the last few months.
I graduated in Summer 2009, and I immediately wanted to do my own startup. I'd recently built my own new website, which was pretty much all my social networks on a single page. A friend asked me when he could have his, and after that I knew I was onto something. It turned into OnePage (http://myonepage.com) and it is doing well, with thousands of users. The problem? revenue was an afterthought, so to fund it I had to keep doing contract work. I tried doing it part time, and then I tried doing a wave of full-time and then a wave of full-time work on OnePage. We tried applying to incubators, too. After a year and a half, I still know there's huge potential in that space (just look at about.me), but I know I need to sort out my income so I can focus.
So, when the November Startup Sprint popped up, the timing couldn't have been better. I built my second startup called Buffer (http://bufferapp.com) with the sole purpose of getting to ramen profitability and using it to free my time. I built the app in about 7 weeks of evenings and launched with payment options from day 1. Fast forward one month until now, and I've had just over a hundred signups, 3 of which are paying. I have a long way to go, but I think this is the method more people should take.
Some people want the lifestyle business so they can spend less time working and enjoy life more, others want their finances "sorted" so they can hit for the home run. Either way, I think lifestyle business first is almost always a good idea.
Neat indeed. Great, slick design, and clearly useful. I'm about to write the same functionality into my swombat.com codebase, so I can really see the use for it. Tweeted about it: http://twitter.com/swombat/status/22747385750888449
Thanks! I agree it's actually not too difficult to write, although there are a few complications when making it a service for many (timezones was the main one).
I built it to scratch my own itch and also to put into practice all my learning of lean startup ideas, development and user experience. It was a real challenge to hold back and launch with a minimal yet complete (in the sense of being useful) feature-set. Now I'm trying to scale it up, I would love to ease off the amount of time I need to spend on contract work given time.
I was surprised at how the idea of a lifestyle business seemed so new and unusual to Andrew Mixergy. As someone with a business that's focused much more on lifestyle and positive world impact than money, I've always been confused by how others often don't seem to understand that making as much money as possible just isn't a priority for me.
This interview was an eye-opener for me because of Andrew's reaction rather than because of the interviewee's business philosophy. If it's strange and alien to Andrew Mixergy, no wonder it's strange and alien to plenty of other folks as well.
Yeah, it's funny that the idea of a lifestyle business is alien to Andrew. He probably interacts with hundreds of lifestyle businesses. Nobody opens a Subway or a Radio Shack with the idea that they'll sell it for $100 billion. They just want to make enough money to live comfortably.
I think this is an important point to raise, and it brings us back to the matter of how important it is to "define your objective." Is your objective to be your own boss? To pursue a dream? To try to make it rich? Etc...
While the "jackpot" target is small and elusive, I think a more _reasonable_ but still far-fetched goal is to search for a place where you are 'impactful.' You may not be rewarded in some strictly remunerative way, but if you are passionate about changing something and can make it happen - better CRM tools, better ad exchange software, better reverse osmosis technology, whatever it may be - then that is something great, completely aside from whether $$$ follows.
Lifestyle stuff is great too, but for myself - as someone very young but idealistic and ambitious - what moves me most is the possibility of making a difference in the world. Businesses - and one where you define the rules and set the agenda - are one way to do that.
Unfortunately $$$ is required for anything you'd like to do, so whatever you do (even building a non-profit) if you want sustainability you'd better make sure $$$ follows.
As I was telling my mother in law, who's a very religious and charitable person, it's much easier to be generous to the world with other people's money, but when relying on other people for $$$ you can't bitch about how things aren't going your way, so the best way to give is to make $$$ yourself ;)
And if you fail to do that, not only will your dream of world-change shatter, but the people relying on your company/service/product will find themselves in the dust; so it's not only hard but also irresponsible and immature to not worry about $$$.
what happens though is sometimes good ideas never see the light of day because the dreamer didn't think the idea was grand enough to warrant seeing it through.
In reality everyone starts off with a 'change the world' goal, but at some point in your life you'll probably change your goals and focus on your family or whatever.
A goal is not always meant to be reached, it often serves simply as something to aim at.
-- Bruce Lee
This reminds me of Andrews and my first business plan. The 3 year chart was slow and steady. There were no hocky stick spikes or grand exit plans. We were simply building a profitable business and were proud to be our own boss.
Having it turn into the success that it became was a mix of drive, determination, planning and luck.
The funny thing is until I started reading HN I had no idea the extent to which people are out here building apps frantically for the "big exit".
When I read about how much 37signals get pissed off at being referred to as "a lifestyle business" I had no idea that this subculture chasing VC and Angel investing even existed.
I had a vague notion that people got investment but I feel a little uneasy about the way that young kids coming straight out of high school are being influenced by this culture.
Everyone just wants to "be an entrepreneur" and no-one really seems to know what that means. In most cases, business is about raising invoices, not capital.