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The lifestyle business bullshit

37signals.com

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Re: The lifestyle business bullshit

#21

Post by dhh »

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…

I'm on board with the term "lifestyle business" if we make it imply "very profitable business that continues to grow revenues without adding additional cost". I would think that's the nirvana description of any business, though.

"Which is more risky? 1 person earning $10m a year, or 10 people earning $1m each a year within the same company?", that simply doesn't compute. If all those 10 guys are making their $1 million each from selling web ads where as the 1 guy is making his $10 million selling subscription software, I know who I'd want to place my money with right now.

Re: The lifestyle business bullshit

#22

Post by axod »

dhh wrote: post #21
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…

I'm on board with the term "lifestyle business" if we make it imply "very profitable business that continues to grow revenues without adding additional cost". I would think that's the nirvana description of any business, though. "Which is more risky? 1 person earning $10m a year, or 10 people earning $1m each a year within the same company?", that simply doesn't compute. If all those 10 guys are making their $1 milli…

I'd place mine firmly with the web ads ;)

I agree @ keep costs low, but I still think the definition of a lifestyle business is one that isn't growing in terms of the business.

If you liken it to a house rental. You could have the best house in the world, and be able to rent it out for $5m a year. That'd give you a great lifestyle, but even if you can manage to rent it out for $6m the next year, that's not business growth. business growth would be renting out 2 properties, 3, etc etc. Reinvesting the profit into the business in order to provide sustainable long term growth.

>> "I would think that's the nirvana description of any business, though."

So I'd disagree with this. Not every business wants profits over future growth.

Re: The lifestyle business bullshit

#23

Post by mixmax »

dhh wrote: post #6
webwright wrote: post #3

Gah, it's honestly the people who RUN lifestyle businesses who make it such a dirty word. It's not, and you should stop being defensive about it. People's dreams vary. Some people want to change the world in a big way and gain satisfaction from herculean effort against incredible odds. Other people aspire to a comfortable living and a life that has lots of room for non-work activities. There's no shame in either.

Another bullshit dichotomy. We want to change the world in a big way. We certainly face hard odds (building a multi-million dollar business is very hard regardless of how you go about it). We just want to do all of that and do other things at the same time. So far that has been going pretty well.

I honestly don't think 37Signals is changing the world in a big way. You're not inventing the transistor, you're making one of many online to-do lists and chats. I'm not saying the products aren't nice, they are. But they aren't gamechanging in any way.

You're great at marketing though.

Re: The lifestyle business bullshit

#24

Post by pwim »

smoody wrote: post #18

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 w…

Addressed in http://news.ycombinator.com/item?id=509808

Re: The lifestyle business bullshit

#25

Post by hbien »

mixmax wrote: post #23
dhh wrote: post #6

Earlier quoted context omitted.

Another bullshit dichotomy. We want to change the world in a big way. We certainly face hard odds (building a multi-million dollar business is very hard regardless of how you go about it). We just want to do all of that and do other things at the same time. So far that has been going pretty well.

I honestly don't think 37Signals is changing the world in a big way. You're not inventing the transistor, you're making one of many online to-do lists and chats. I'm not saying the products aren't nice, they are. But they aren't gamechanging in any way. You're great at marketing though.

I'm pretty sure Rails was game changing.

Re: The lifestyle business bullshit

#26

Post by sokoloff »

axod wrote: post #19
comatose_kid wrote: post #17

Earlier quoted context omitted.

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?

I think that headcount is a (n often) necessary evil in growing a business, but keeping everything else equal and increasing headcount alone actually makes your business less likely to be long-run great, IMO.

Paying additional salaries and benefits and taking on additional management and coordination overhead are all losses/drags on the business, unless the added body brings in far more money than they cost.

Yes, you often need them, but successful large companies often have a lot of people because they have a lot of revenue and profit, rather than having a lot of revenue and profit because they have a lot of people.

Re: The lifestyle business bullshit

#28

Post by mlinsey »

n8tron wrote: post #4

These guys really, really – I mean REALLY – like to talk about themselves. We get it, you're cool. Now please help port some more gems for Ruby 1.9.

Judging by how frequently they make the front page, people on HN really, really like to talk about them as well.

Their perspective is intriguing, even if it isn't generalizable.

Re: The lifestyle business bullshit

#29

Post by omouse »

hbien wrote: post #25
mixmax wrote: post #23

Earlier quoted context omitted.

I honestly don't think 37Signals is changing the world in a big way. You're not inventing the transistor, you're making one of many online to-do lists and chats. I'm not saying the products aren't nice, they are. But they aren't gamechanging in any way. You're great at marketing though.

I'm pretty sure Rails was game changing.

Maybe in the way it's encouraged other web frameworks to adopt MVC, but that's not a huge deal. MVC has been around for a long time anyhow.
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