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The lifestyle business bullshit

37signals.com

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Re: The lifestyle business bullshit

#11

Post by [deleted] »

dhh wrote: post #5
antidaily wrote: post #2

I don't disagree with DHH but I bet if you totaled the hours spent blogging, redesigning FedEx for fun, giving talks at conferences, fixing Rails bugs, etc. the 37signals crew works about as much as anyone else. I want to know who is calling them a lifestyle business. Did that even happen?

As much as what? And what are you willing to bet :)? We certainly don't have a 4-hour work week, but we sure don't keep a 60-hour one either. Yes, there are exceptional weeks here and there were there's a brief spike, but those are just that, exceptions. On average, we all take time to spend lots of it away from a computer. I think having a healthy hobby and social life outside of computers will only make you a bette…

[deleted]

Re: The lifestyle business bullshit

#12

Post by dhh »

axod wrote: post #9

From wikipedia: "Lifestyle Businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and no more; Lifestyle Businesses typically have limited scalability and potential for growth because such growth would destroy the very lifestyle for which their owner-managers set them up." And from 37signals blog: "We haven’t found the natural size for 37s…

You are equating growth with head count, which is a common fallacy, but still a fallacy. Our measure of growth and success is profit and growth in profit. For the past many years now, we've had spectacular yearly growth and we've yet managed to avoid destroying the lifestyle we're enjoying.

Preferably we wouldn't hire another person for the next 10 years, but still dramatically increase our profits. To me, there's no growth in just adding to the head count without increasing profits. That's just deadweight.

Re: The lifestyle business bullshit

#13

Post by timr »

axod wrote: post #9

From wikipedia: "Lifestyle Businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and no more; Lifestyle Businesses typically have limited scalability and potential for growth because such growth would destroy the very lifestyle for which their owner-managers set them up." And from 37signals blog: "We haven’t found the natural size for 37s…

That definition is flawed. It's possible to run a huge website with 20 people. If you're a top-100 site, and your staff is measured in tens, are you still a lifestyle business?

Re: The lifestyle business bullshit

#14

Post by axod »

dhh wrote: post #12
axod wrote: post #9

From wikipedia: "Lifestyle Businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and no more; Lifestyle Businesses typically have limited scalability and potential for growth because such growth would destroy the very lifestyle for which their owner-managers set them up." And from 37signals blog: "We haven’t found the natural size for 37s…

You are equating growth with head count, which is a common fallacy, but still a fallacy. Our measure of growth and success is profit and growth in profit. For the past many years now, we've had spectacular yearly growth and we've yet managed to avoid destroying the lifestyle we're enjoying. Preferably we wouldn't hire another person for the next 10 years, but still dramatically increase our profits. To me, there's no…

Without a head count growth though, you're just supporting a lifestyle. Surely. That's great, and it depends on your priorities.

But as far as I see it, that's the definition of a lifestyle business - sacrificing growth of the business (In terms of head count), for 'lifestyle'. With a very small team, that profit seems quite risky to me.

(I would also say plentyoffish is a lifestyle business at the moment from what I know about it). From what I've read, there's a very small team, not growing in head count, making a lot of money.

>> To me, there's no growth in just adding to the head count without increasing profits. That's just deadweight.

I think it's a good thing to employ more people, if it's going to work in the long term. Sacrificing 'lifestyle' now, to build a big company.

You can either take the profit, or you can reinvest it in people for the long term, and build something big.

>> "Our measure of growth and success is profit and growth in profit."

Which is more risky? 1 person earning $10m a year, or 10 people earning $1m each a year within the same company?

Re: The lifestyle business bullshit

#15

Post by axod »

timr wrote: post #13
axod wrote: post #9

From wikipedia: "Lifestyle Businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and no more; Lifestyle Businesses typically have limited scalability and potential for growth because such growth would destroy the very lifestyle for which their owner-managers set them up." And from 37signals blog: "We haven’t found the natural size for 37s…

That definition is flawed. It's possible to run a huge website with 20 people. If you're a top-100 site, and your staff is measured in tens, are you still a lifestyle business?

I would say so, yeah. If you only have 10 people, I'd say it's still kinda risky. Your company could disappear very quickly.

As I say, I'd rate plentyOfFish as a lifestyle business. It's not a derogatory term in any way shape or form. Just means that instead of growing the company (Headcount, diversifying, etc), they are maintaining their own lifestyle.

Re: The lifestyle business bullshit

#16

Post by comatose_kid »

axod wrote: post #14
dhh wrote: post #12

Earlier quoted context omitted.

You are equating growth with head count, which is a common fallacy, but still a fallacy. Our measure of growth and success is profit and growth in profit. For the past many years now, we've had spectacular yearly growth and we've yet managed to avoid destroying the lifestyle we're enjoying. Preferably we wouldn't hire another person for the next 10 years, but still dramatically increase our profits. To me, there's no…

Without a head count growth though, you're just supporting a lifestyle. Surely. That's great, and it depends on your priorities. But as far as I see it, that's the definition of a lifestyle business - sacrificing growth of the business (In terms of head count), for 'lifestyle'. With a very small team, that profit seems quite risky to me. (I would also say plentyoffish is a lifestyle business at the moment from what I…

"Without a head count growth though, you're just supporting a lifestyle. "

I don't understand how you can come to that conclusion. Business success is defined by profits, not ever-increasing headcount.

Re: The lifestyle business bullshit

#17

Post by comatose_kid »

axod wrote: post #15
timr wrote: post #13

Earlier quoted context omitted.

That definition is flawed. It's possible to run a huge website with 20 people. If you're a top-100 site, and your staff is measured in tens, are you still a lifestyle business?

I would say so, yeah. If you only have 10 people, I'd say it's still kinda risky. Your company could disappear very quickly. As I say, I'd rate plentyOfFish as a lifestyle business. It's not a derogatory term in any way shape or form. Just means that instead of growing the company (Headcount, diversifying, etc), they are maintaining their own lifestyle.

No way. 10 people creating a 100M business isn't at risk of disappearing. 10 people creating a 1M business might be.

The issue is profits, not headcount.

Re: The lifestyle business bullshit

#18

Post by smoody »

It's a lot easier when you have a strong brand (corporate and personal). It's not so easy when you don't. Granted, they had no brand when they started (which was in a different climate than the climate facing startups today), but I think they've forgotten what it's like to be brandless, moneyless, etc.

If they want to prove their constant mantra of "anyone can do it!," then they should try this: Start a new company with a new company name, use aliases for their own names, live on ramen noodles for eight months (or many more), and see if they can repeat their success. If they can do it, then I'll be the first to sing their praises.

They've created exactly one successful company (a huge achievement to be sure). However, that doesn't qualify them to spread general wisdom about how anyone can do the same.

I'm not saying that their ideas for creating products people love are bad or wrong. They're actually quite good (and perhaps even intuitive to anyone who sits down and really thinks about it instead of just wanting to read about it). But one can't extrapolate broad patterns from a single macro datapoint.

Of course anyone is free to say whatever they want and I'm not suggesting that they or anyone else should stop expressing their opinions -- opinions are what make the Internet great. :-)

Re: The lifestyle business bullshit

#19

Post by axod »

comatose_kid wrote: post #17
axod wrote: post #15

Earlier quoted context omitted.

I would say so, yeah. If you only have 10 people, I'd say it's still kinda risky. Your company could disappear very quickly. As I say, I'd rate plentyOfFish as a lifestyle business. It's not a derogatory term in any way shape or form. Just means that instead of growing the company (Headcount, diversifying, etc), they are maintaining their own lifestyle.

No way. 10 people creating a 100M business isn't at risk of disappearing. 10 people creating a 1M business might be. The issue is profits, not headcount.

I don't see why that would be the case. Profit doesn't really mean anything unless it's sustainable (Apart from providing a lifestyle). To be sustainable, it's worth diversifying, and that means increasing head count.

Measuring a company in terms of profit is really short term. How about the long term lasting effect of the company?

Re: The lifestyle business bullshit

#20

Post by nonrecursive »

comatose_kid wrote: post #16
axod wrote: post #14

Earlier quoted context omitted.

Without a head count growth though, you're just supporting a lifestyle. Surely. That's great, and it depends on your priorities. But as far as I see it, that's the definition of a lifestyle business - sacrificing growth of the business (In terms of head count), for 'lifestyle'. With a very small team, that profit seems quite risky to me. (I would also say plentyoffish is a lifestyle business at the moment from what I…

"Without a head count growth though, you're just supporting a lifestyle. " I don't understand how you can come to that conclusion. Business success is defined by profits, not ever-increasing headcount.

The definition axod gave reads, "Lifestyle Businesses typically have limited scalability and potential for growth because such growth would destroy the very lifestyle for which their owner-managers set them up."

So I can see what you're saying comatose_kid, but if we're talking about lifestyle businesses it makes sense to talk about organizational growth rather than profit growth. How would making more money destroy your lifestyle? And why would a lifestyle business's owners be afraid of making more money?

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