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Doug Richard: Why do people hate lifestyle businesses?

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Re: Doug Richard: Why do people hate lifestyle businesses?

#11

Post by LargeWu »

rmah wrote: post #4

I don't think it's a matter of "hating" lifestyle businesses. It's just that most normal people don't see a 1-man operation as a "business". They assume that if you don't at least have plans to grow, you're just trying to puff yourself up. My guess is that if you said you were a "contractor" or "consultant", there would be less antipathy. That said, why should you care? If you're happy being a 1-man shop, just laugh…

20% of all small businesses in the US have only one employee. Why wouldn't you consider somebody operating as a contractor or consultant a small business owner? That's precisely what they are, whether they have an office or a storefront, or not.

Re: Doug Richard: Why do people hate lifestyle businesses?

#12

Post by jasonlotito »

pclark wrote: post #2

Spins both ways: Why do people hate venture capital funded / don't generate revenue from day 1 companies?

As the article says: "Raising money doesn't mean you can make money." All to often people confusing raising money with success in the business, even if the business is in the red.

Re: Doug Richard: Why do people hate lifestyle businesses?

#13

Post by raphaelb »

pxlpshr wrote: post #8

It's not that people hate lifestyle businesses, it's that a lot of people inappropriately label their lifestyle businesses as "startups". For the people that have worked 70+ hours a week, took no salary, and have lived through the pain, blood, tears, sweat in an attempt to build a sustainable business -- it's kind of a slap in the face. I used to run a lifestyle business (ad agency), worked 40 hours a month and nette…

I don't understand why it is inappropriate to label it a startup. By your definition 37signals is not a startup because they made money early on and don't work more than 40 hours per week.

It seems like the childish / teenaged measuring stick he talked about regarding revenue or employee size. Like it isn't a real business/startup if you don't work 70+ hours per week and earn no money quickly.

Re: Doug Richard: Why do people hate lifestyle businesses?

#14

Post by terrellm »

I've owned the same company for 10 years where I've sold software to cattle ranchers and horse owners in almost 60 countries.

My company started out as lifestyle business. Then after I got my MBA I was ready to build it to sell so I could become a serial entrepreneur. After my wife and I had our son 2 years ago, I realized having a moderately passive income stream that gave us more time for family was what we were looking for all along.

It reminds me of the old story "The MBA and the Mexican Fisherman" and I was both... well sort of... an MBA and a Texas Rancher. http://www.keepingitrural.com/mba-mexican-fisherman

Re: Doug Richard: Why do people hate lifestyle businesses?

#15

Post by kbob »

"People" don't hate lifestyle businesses. "Investors" (both VC and angel) hate them, and it's for the obvious reasons: if an entrepreneur doesn't take outside funding, and doesn't shoot for a big exit in 5-7 years, then there's no opportunity for a VC to profit.

The early-stage investment community controls the dialog about entrepreneurship, and they're not entirely unbiased.

Re: Doug Richard: Why do people hate lifestyle businesses?

#16

Post by pxlpshr »

FreeRadical wrote: post #9
pxlpshr wrote: post #8

It's not that people hate lifestyle businesses, it's that a lot of people inappropriately label their lifestyle businesses as "startups". For the people that have worked 70+ hours a week, took no salary, and have lived through the pain, blood, tears, sweat in an attempt to build a sustainable business -- it's kind of a slap in the face. I used to run a lifestyle business (ad agency), worked 40 hours a month and nette…

Just out of interest, why did you leave that business when you only had to work on it 40 hours a week. You probably could have started your second business at the same time.

Client services never end. After I shut it down and moved to LA to focus full-time on a video game startup -- I still had lingering client work and it's a distraction when you're completely absorbed, and creative work is very draining mentally. Programming and designing are not dissimilar in that regard.

Before I moved, I was working on a second business building customizable home theater projection screens but we got stiff armed by our supplier after building a better product on their frame and pissing off their other dealers. I was too inexperienced at the time to know how to handle it.

Re: Doug Richard: Why do people hate lifestyle businesses?

#17

Post by byoung2 »

BerislavLopac wrote: post #6
rmah wrote: post #4

I don't think it's a matter of "hating" lifestyle businesses. It's just that most normal people don't see a 1-man operation as a "business". They assume that if you don't at least have plans to grow, you're just trying to puff yourself up. My guess is that if you said you were a "contractor" or "consultant", there would be less antipathy. That said, why should you care? If you're happy being a 1-man shop, just laugh…

Sorry, but why should a lifestyle business be a one-man operation? As I see it, a lifestyle business is a regular company like any other, with employees and everything -- but with no plans (or even possibilities) for huge growth, acquisition or IPO. Simply, a business which allows its owner to get a sizable salary without much work, but would never bring them millions in a liquidity event.

Exactly. When I think of lifestyle businesses, the examples that come to mind are dentist offices, hair salons, and family restaurants. Usually the customers personally know the owner, and the business thrives because of it, but it's impossible to scale.

Re: Doug Richard: Why do people hate lifestyle businesses?

#18

Post by maukdaddy »

terrellm wrote: post #14

I've owned the same company for 10 years where I've sold software to cattle ranchers and horse owners in almost 60 countries. My company started out as lifestyle business. Then after I got my MBA I was ready to build it to sell so I could become a serial entrepreneur. After my wife and I had our son 2 years ago, I realized having a moderately passive income stream that gave us more time for family was what we were lo…

I agree 100%! I'm currently in an MBA program, and the focus is always on getting external funding and growing a business for the sake of growing.

You have inspired me today. I'd love to run a business like yours where I could spend more time skiing, hiking, and enjoying the outdoors rather than slaving away for some VCs to make their 500% exit.

Edit: I checked out the site listed in your profile. You have done an incredible job solving problems for a niche market!

Re: Doug Richard: Why do people hate lifestyle businesses?

#19

Post by pxlpshr »

raphaelb wrote: post #13
pxlpshr wrote: post #8

It's not that people hate lifestyle businesses, it's that a lot of people inappropriately label their lifestyle businesses as "startups". For the people that have worked 70+ hours a week, took no salary, and have lived through the pain, blood, tears, sweat in an attempt to build a sustainable business -- it's kind of a slap in the face. I used to run a lifestyle business (ad agency), worked 40 hours a month and nette…

I don't understand why it is inappropriate to label it a startup. By your definition 37signals is not a startup because they made money early on and don't work more than 40 hours per week. It seems like the childish / teenaged measuring stick he talked about regarding revenue or employee size. Like it isn't a real business/startup if you don't work 70+ hours per week and earn no money quickly.

I don't believe that DHH and Jason work less than 40 hours a week. Maybe they do now, 10 years later, but I think they've burned plenty of midnight oil that would put BP to shame.

I don't understand why people who want a relaxed work environment label themselves a startup. That's like saying you're a marine but have never gone through bootcamp.

Re: Doug Richard: Why do people hate lifestyle businesses?

#20

Post by far33d »

I don't - I just find it frustrating when people confuse scalable startups with other businesses and try to apply the advice of one to the other. They are different beasts and have different rules. Talking about one vs. the other is like arguing about vi vs emacs - you can argue about the strengths and weaknesses of each all day but trying to pass value judgements is a waste of time.
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