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Startup vs. Lifestyle Business (A Short Comparison from a Guy Who's Done Both) (corbettbarr.com)
121 points by wallflower on May 21, 2011 | hide | past | web | favorite | 22 comments



"I wanted to start a business doing something I enjoy that let me live a great life now."

I wish we as a valley entrepreneur culture valued this more.

I quit my fulltime job at a startup recently, with the goal of starting my own company. I spent a bunch of time having fairly in depth conversations with potential cofounders. Really sharp people, many of which who had solid, well validated business ideas with significant investor interest.

But I couldn't fully commit. In the end, I realized it was because deep in my heart, I wanted to have a great life now, not at some unspecified (and uncertain) point way in the future. So I decided to focus on building a business that generates solid cash flow and which doesn't require a 60 hour workweek for me to maintain, once I get it up and running.

The process of going around and explaining my decision to everyone who I had been talking with awkward. If you liken the process of finding a cofounder to dating leading up to marriage, then the process of "breaking up" was akin to going around to all of the girls you're dating and telling them you're gay. "We're both attracted to different things", and, "I respect your lifestyle choice" were common phrases:) People were supportive in a "That's nice for you, I'm glad you're following your heart, but I would never choose that" sort of way.

It's a shame that the valley culture is so focused on big, home run hit businesses. We're now in an era of entrepreneurship where very solid cashflow businesses can be created with very little capital, and significantly lower risk than a big homerun hit business. Yet, as a community, we treat them like the uncle whose lifestyle everyone accepts but no one wants to talk about. A lot of the advising, incubators, and accepted best practices all center around taking funding and growing as big as possible as quickly as possible, above all else.

If any "lifestyle" entrepreneurs want to grab a cup of coffee sometime and swap advice and/or encouragement, drop me a line - my contact info is in my profile.


The thing is though that a lifestyle business is quite stressful in many ways: you have to innovate like a technologist while also having the enormous stress of bottom line responsibility for profit & loss...without the possibility of getting more hands to help you out through growth, or the margin of a large company to tide you over should times get bad.

37Signals is not the typical lifestyle business. A business you've never heard of, or which you frequent without paying much thought, is the typical lifestyle business. No one will make a movie about such a business, or be in awe at its growth rate, or fund a bunch of competitors to get into the space. It certainly has its pluses and minuses, but if you are an ambitious kind of character who loves the clang of battle, there's a reason that a lifestyle business seems like a defeat.

Finally, it's not much easier to build a lifestyle business that actually makes more money (and hence provides more freedom) than your alternatives. If you have such talent, you could probably make more of an impact either at a big company or by joining/founding a top startup.


The "problem" with the startup world and the Valley is that the people with the most money or the sexiest story have the loudest voice. So in this case it's the investors or people who made huge exits, and they get to influence what's cool and not cool among the young kids. Mega-successful founders think that they know the recipe for success, the same way that lottery winners keep telling that "you have to keep pushing and one day the big win comes to you". Investors are some of the same, plus, well, they can't make money on people like you, so what's the point in even talking about it?

But don't despair, my friend, - people like you have a community: http://www.micropreneur.com/ Note that it's paid forum. I'm still reading the book ( http://www.startupbook.net/ - endorsed by patio11 ) right now, and when I'm done I will join that forum, too. I already met the author/organizer and he's totally the kind of guy who would attract the kind of people you want to rub shoulders with.

There's also going to be nice conference for people like you: http://www.microconf.com/

I am attending, and so should you. Doubting your own sanity is the single biggest risk factor in your micro-business.


huh. See, my experience has been like yours when talking to businesspeople... but technical people in silicon valley? as far as I can tell, most of them understand my business model, and think it makes more sense than trying to make the next myspace or whatever. I mean, yeah, I don't make a lot of money, and my business is worth a low-end condo, but it's pretty obvious how I make that money and how I could make more money.

I've been talking about starting a bootstrapper's group at the hacker dojo, something focused on those of us who are not focused on getting investment. 'cause like I said, the technical people understand what I'm doing, but it'd be interesting to talk to other people about the business side of my lifestyle business.


I've done the startup thing (I was first programmer hire at Datacash in 1997; reverse takeover onto AIM in 2000, after which I left: acquired by Mastercard last year). And I've done the lifestyle thing -- self-employed full time for the past decade, doing very nicely but in a niche where it's almost impossible to scale up beyond sole trader.

If I'd stuck in the startup mode, I'd be dead.

See, startups are very demanding. And if you don't have great health, or a tendency towards stress-related illnesses, that's a very bad situation to be in. I've seen a friend die of it (hypertension plus 90 hour work weeks are a bad combination) and I was on course for it myself before I got out.

It doesn't matter if the startup is going to make you rich at the IPO if it kills you first. And it won't do the startup any good if one of the founder dies in harness, either.


> doing very nicely but in a niche where it's almost impossible to scale up beyond sole trader.

cstross is a sci-fi author:-)

I think for many, that would be going from startups to writing would be from the frying pan into the fire in that they're both "black swan" industries. Glad it's worked for him, though.


I have worked corporate government web development for over a decade (sigh). I helped bring in use of open source and php there and in a way it has always operated as a startup with constant staff/tech changes.

But going it alone in the real world has been a teacher of many new lessons. I am struggling everyday to balance working towards a goal while maintaining the present reality. I am not alone in my current startup (http://infostripe.com) but it's pretty much down to me right now to finance, develop, market, and support it. Developing and managing growth are tasks I actually crave to do and my goal right now is to build an idea slowly, work hard, refine and iterate the results until it begins to take on a life of its own and we can afford specialists and consider investment.

I would say for sure that until you do reach the point of stability in your code and business model that you are living a particular lifestyle. Any time you can find to get closer to profitability is your life. I've watched many small business owners go through the same startup cycles. Some make it and some don't. It just really comes down to the fact that if the thing you are going after is something that you Love to do it will ultimately get easier if it is a decent idea. The something whether code or knitting is the thing that you want to do so figuring out the rest just enables your passion.

I believe ultimately that being able to think up, program and execute technical and/or products and craft ideas for making coin online is an ever growing small business of the now and future.


Great post! I am a software developer currently working full time for a company. Recently, my husband and I started talking about having kids and the first thought that came to my mind was that I don’t want my kids to be left in someone else’s care while I work for someone else. I don’t want to stop working entirely and become a housewife either.

I started looking into other options. From what I understand, startups are for people who want to run a business and a lifestyle business is for people who want to own a business with a focus on maintaining their preferred lifestyle.

I am choosing to go the lifestyle business route. We’ll see how it goes :)


My wife and I made this same decision about 5 years ago when we were expecting our first child, for pretty much the same reasons you cited. We were extremely fortunate to have found a niche for which we could build a product, and find paying clients relatively quickly.

It took us about 18 months to reach a level of stability - literally, our business grew alongside our first child. But, even during this phase we were able to spend quality time with our child. Although, as one of the other posters indicated a lifestyle business doesn't automatically mean tons of free time and no stress. It's just that relative to a traditional startup life (which I experienced as a principal when I was still single), it's still night and day.

My wife and I are extremely grateful for the time and freedom our business afforded us. We were able to spend more time with our children during those precious first few months and years than we would have even working for a big company, let alone a startup. There were still stressful times, especially finding clients, or when servers went down in the middle of the night (funny how that always happened just as soon as you go back to sleep after walking a crying child to sleep :), but it was all worth it.

I wish you best luck in your path.


I have been living the lifestyle business for more than 10 years now. Here in HN I feel a bit ashamed of: - not having raised millions - not having made millions - my small company staying small for so long.

but who cares? What I wanted was traveling and travel I did. The author is right to point out that there's an (easier?) alternative to make it big. Make it now.


Both descriptors are too general, they hide the good and bad implementations of either approach.

Depending on your experience of either side (which I, too, have) another way of looking at the comparison is, respectively, an organisation that hopes to turn into a business in the future, or a profitable business now.

Naturally, both sides want to earn revenue and be profitable. Only, on the 'startup' side, you have to have a really good reason to be in the position to take that funding. You need to know, I think, the first market you will tackle, the first problem you will solve and the first ways you will begin building revenue and profitability, otherwise you are just wasting time with other people's cash.

If a startup is a medical company needing funding for R&D, fine. If a startup is a hardware company needing to fill inventory, fine. If the startup is a software company that has worked out a repeatable sales model and now wants to get boots on the floor peddling those wares, also fine.

I guess what I'm saying is that it feels to me in software that 'startup' is almost the default, when in reality it should be a special case, or a latter day option as you scale up an already proven sales model.


There's also the alternative of working for someone else's lifestyle business.........


A lot of us "lifestylers" have similar ambitions to the startup folks, like wanting to work for ourselves and be masters of our own destiny.

Working for someone else's lifestyle business kind of has all the downsides. You know it's not going to go big and turn your equity into big money, plus you're still working for someone else, not being your own boss.

On the flip side, for the people who just want a good, low-stress job, working for a lifestyle biz can be a great thing. There's a better chance the founders will understand and respect your own lifestyle choices (kids, family, travel, etc.) and try to prevent the job from interfering.


But then you are at their mercy.


I've been on both sides as well, having done many lifestyle projects and businesses as well as building startups including successfully getting acquired and I have the opposite view.

I strongly believe that the main reason the author claims he prefers a lifestyle business really boils down to financial reasons and freedom of time associated with running a simple lifestyle business. But if you're in a position where finances are no longer an issue, it boils down to what you really want to do. For me, having been through both and having both do well enough to financially secure me for life, the concept of doing a business to "allow me to live life now" doesn't really apply. I can technically not work by choice and just enjoy life to the maximum extent doing whatever (financially related or not) or do projects on the side to fill up time if that's my hobby.

Instead, I find that I have a tremendous passion in doing startups, where the lifestyle IS the life I want and I don't really care about doing all the other so called "living life now" junk because this is living life at its best in my definition. I am the type that would rather not travel, hit up happy hour, or do other leisurely things in lieu of running my startup doing something cool or what I want to do. I rather focus all my spare time building a startup anyway. So to me, to some extent, it seems like the authors decision is base on the fact that financial, no matter how small of a factor it currently plays, is still a determining factor nonetheless (read associate of time included). The OP can feel free to correct me if this isn't so.

It also doesn't help that it seems the OP only has one startup experience to relate to and its one that didn't succeed (not counting the experience portion; which can be considered success or not separately) and ended up making him and his cofounder split ways (which even on the best of terms and all could still have some influence). Just my two cents.

After all is said and done, it also reflects how many people consider getting into doing a startup under the notion of either not wanting to work for somebody else or because of financial wins, less so because they just have a strong passion for doing startups (similar to people who do open source projects that aren't commercialize to an extent). I'm not saying the OP is like that in any way, but as the old mantra goes, do what you love. And if you love doing startups, freedom/finances isn't going to change your love of the game.

Side Note: I lived in SF for over three years before moving down to the Valley (Mountain View) in favor or startup life over city living. While SF is still very tech centric, in my personal honest opinion, it doesn't hold much of a candle to the Valley itself and majority of the people I've ever talked to arguing in favor of living in SF, are to a large extent, arguing for a life outside of the startup world. There's absolutely nothing wrong with that but the distinction should be made for non-Bay Area residents who may not understand the difference. (Again, personal opinion)


This was nearly content-free. No details about either business.

It does outline the difference between a VC-backed startup and a regular business but I hope that distinction is clear to most of the people here.

There is Tim-Ferriss-esque hinting at "dream lifestyle" stuff that disturbs me.


follow the links in the post and you'll find it. he actually has a somewhat lengthy thing about what he did and how.

what's disturbing about the dream lifestyle stuff?


Let me guess, you are non-technical?


Can you elaborate? As a one-liner, that sounds both ridiculous and belittling.


What does "technical" or "non-technical" have to do with his point? I am on the technical side of it, and have come to the conclusion that when I do start my own business it will be geared at having the life I want the whole time, not at some point off in the future. That is an entirely reasonable position to take.


I did not author the article.

I am technical and I realize that I want to better my non-technical skills. It really is all about relationships. You can't get meet someone and talk business the first time you meet, just get the contact info to follow up. You can't woo them on the first date.

Like many people here, HN has inspired me to actually do side projects with people. Yes making money is nice, especially when it is not from coder of fortune mercenary consulting but from product. Like many people here, I have a day job but get a lot from my side projects (The term startup is so meaningless). Having a day job lets us explore possibilities, without giving up some comfort


define non-technical.




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