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Too many people who are new to entrepreneurship only see startups as their entry point. Part of this is media coverage, everyone is talking about funding mega r

Too many people who are new to entrepreneurship only see startups as their entry point. Part of this is media coverage, everyone is talking about funding mega rounds and the VC fueled entrepreneur world. I think many entrepreneurs are less interested in building Billion dollar companies and are more seeking freedom from suppressive corporate jobs. But when the only narrative you see is mega startups it starts to seem like that's the only worthwhile path to entrepreneurship. Small business sounds like your Mom's flower shop - lame. So you have to find a co-founder and raise VC and pick a huge market, and work on your pitch deck, etc. etc. Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly.

jchendy 11y ago
Do you know of any resources to learn about tech lifestyle businesses?
- MCRed 11y ago
  All of the "Startup" resources, like The Lean Startup, etc that aren't busy glorifying VCs or the SV model, are useful for these businesses. The only difference between a "lifestyle" business and the "Silicon Valley" model is whether you are in control over your own destiny and focused on building a business, or whether you're selling out to people who want to increase your risk and their possible profits, with the expectation that you'll get a nice bonus in your acquihire. In a way, YC and VCs have ruined startups, by making people think this SV model -- which is great for Facebook, google and yelp, but terrible for the billion other startups is the One True Way.
  - rcarrigan87 11y ago
    There is truly a place for VCs and yes some businesses definitely need that kind of funding. But right now it seems VC is so available things are getting funded that will never be able to hit that 10x mark. So businesses that could have been great bootstrap businesses will grow too fast with too high a burn rate and flame out at a series A or B crunch. Meanwhile, if the business could have taken it slower they could have built something really valuable for themselves.
    - afarrell 11y ago
      This is a way that fixing income inequality would help certain entrepreneurs. If more money can come from customers (poor/middle class/small business) rather than investors, then early revenue will be more attainable than early fundraising. Decentralizing economic power would shift our economy away from capital-intensive moonshots and toward consumer products though.
      - nitrogen 11y ago
        Decentralizing economic power would shift our economy away from capital-intensive moonshots and toward consumer products though. This was originally solved by selling stock in a venture to the public.
    - 7Figures2Commas 11y ago
      > So businesses that could have been great bootstrap businesses will grow too fast with too high a burn rate and flame out at a series A or B crunch. Smart, patient entrepreneurs can take advantage of this. Let angel and VC-backed companies validate markets, and pursue the markets they vacate after the broader crunch occurs.
      - czbond 11y ago
        You sir, are a smart man. And the only other person I've ever heard to suggest that besides myself (not tooting horn, just honest that no-one thinks that way).
      - Douceur 11y ago
        That's based on the assumption that the crunch will happen though, and even if those companies flop, I think it's quite important to analyse exactly where they went wrong rather than put them down as just another startup that couldn't scale properly. If you're a bootstrapping startup hoping to enter the same market, this is crucial as you can at least try and avoid those mistakes - who's to say that you won't crash and burn too? (This is more like advice to myself actually as I'm currently in a dilemma between that "wait" that you've just described and the intense worry of not getting first-mover advantage through that waiting)
- rcarrigan87 11y ago
  The entrepreneur sub-reddit frequently has posts from guys who are starting or trying to start online lifestyle businesses. It's somewhat hit or miss. But if you check it every few days you can find some real gems. Some of the businesses really open your eyes to ways to make money online. The narratives are much less about massively disruptive, world changing startups and much more about making a good living through mostly internet businesses. https://www.reddit.com/r/entrepreneur https://www.reddit.com/r/entrepreneur
  - trg2 11y ago
    http://www.tropicalmba.com/best-of-tmba/ http://www.tropicalmba.com/best-of-tmba/ http://www.dynamitecircle.com/ http://www.dynamitecircle.com/
- idlewords 11y ago
  My advice is to just try stuff and see what sticks. The space of unexplored business models is much larger than what's covered in the typical self-help places.
- BerislavLopac 11y ago
  I strongly recommend patio11's blog, http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/ -- he's always been a proponent of that approach.
- jsingleton 11y ago
  The http://www.startupsfortherestofus.com http://www.startupsfortherestofus.com podcast is quite good. Rob also has a blog: http://www.softwarebyrob.com http://www.softwarebyrob.com
  - TravisJamison 11y ago
    I'll add to that http://www.microconf.com http://www.microconf.com hosted by Rob and Mike.
- hughguiney 11y ago
  Pat Flynn’s site and podcast: http://www.smartpassiveincome.com/ http://www.smartpassiveincome.com/
  - brosky117 11y ago
    Just found Pat's stuff and I also highly recommend it
- ericlavigne 11y ago
  "Do you know of any resources to learn about tech lifestyle businesses?" https://unicornfree.com/ https://unicornfree.com/ http://courses.30x500.com/ http://courses.30x500.com/
- eli 11y ago
  There's a huge spectrum of options between go-huge-or-die-trying mega VC rounds and a lifestyle business that supports maybe one person.
z2 11y ago
Agree completely based on my own limited observations. This emphasis on scaling up (with risk seen as a necessity), combined with an attractive definition of 'entrepreneur' vs 'small business owner' [1], cause people to forget that value can be unlocked in so many more ways. Trading your time for an income could work well for many even if it does not scale or fit the definition of 'entrepreneurship'. [1] http://www.investopedia.com/articles/investing/092514/entrepreneur-vs-small-business-owner-defined.asp http://www.investopedia.com/articles/investing/092514/entrep...
- macco 11y ago
  The best definition of entrepreneur I know of is the original by Jean-Baptiste Say (https://de.wikipedia.org/wiki/Jean-Baptiste_Say https://de.wikipedia.org/wiki/Jean-Baptiste_Say): “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield”
PopeOfNope 11y ago
tl;dr: owning a business does funny things to people. Make sure you're one of the ones who can handle it in a healthy manner. Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly. Emphasis on the "if done properly." I know a man who own his own american manufacturing company (yes, they still exist). They specialize in electric motors. They do good business despite having fewer than 50 employees and gross about $5M a year. I'm not sure how much of that is profit, but I'm going to guess most of it. The owner is fanatic about keeping costs down. On the other hand, he doesn't have the temperament for business. He's a ball of stress all the time. He's always getting angry over what many here would consider standard business practices. He micromanages his company, especially his IT staff (which is one guy). He's had 4 heart attacks in the past 10 years. He has fewer than 50 employees because he refuses to pass the minimum to qualify for Obamacare (which would raise his costs considerably). He's a good guy, normally, but business ownership has been a net negative on his health and mental status. I knew one other small business owner that was similar. He owned a successful comic book store at the local mall. He did great business and made a lot of money. Then, about 6 month after he opened the store, he noticed that shoplifting was increasing. He then became obsessed about limiting his losses. The idea that somebody could easily steal his merchandise stressed him out beyond measure. Business started going down around then because the changes he made to limit shoplifting also limited his exposure to passers by and made the storefront look unwelcoming. He eventually moved the store to the first floor of a single family home just outside of the city limits. His profits dropped considerably, but so did his losses. His stress also went away; he was no longer worried or obsessed about it. The tradeoff was worth it to him; he literally traded high profit for low stress.
- beambot 11y ago
  $5M gross is kinda low for 50(ish) employees. That works out to $100k apiece fully-loaded (healthcare, taxes, etc). He would need to be paying them each substantially less than $60k a year.... and that's ignoring all his other costs: materials (it's a physical good), inventory, taxes (property, sales, income), and service fees (attorney, accountant, etc). Only then do you get to his net income. It's likely not very good. Perhaps that's causing all the stress?! Maybe not a fair comparison.... but look at Google, which does $50B in revenues with 50,000 employees -- i.e. $1M in revenue (in a high-margin, software-centric business) per employee.
xiaoma 11y ago
And it's not like being bootstrapped ensures a business won't be a home run. Microsoft, Oracle, Ebay and Github were all bootstrapped.
- larrys 11y ago
  Microsoft may have been bootstrapped (I will go with what you are saying without verifying) however it also had the backing and full faith and credit of a somewhat wealthy and connected family.
  - thaumasiotes 11y ago
    When Microsoft went public, Bill Gates owned 80% of the stock. His wealth, compared to other tech company founders, is essentially all the product of not getting diluted.
    - nostrademons 11y ago
      Think you mean "insiders owned 80% of the stock". Bill Gates only owned 66% of the stock at founding, splitting it between him and Paul Allen, and early employees owned some too.
  - adventured 11y ago
    Microsoft did not have the "full faith and credit" of the Gates family. His family figured it would burn out and he'd return to college, per what Bill has said on the matter. They were less than thrilled with him dropping out. He received $0 funding or help from them in regards to Microsoft getting started. It was a million dollar business, completely independent of the Gates family or its connections, while it was operating in New Mexico. Bill and Paul had sales almost from day one.
    - vezzy-fnord 11y ago
      I think this was in reference to Mary Maxwell Gates, who ended up bringing (if not directly) the then nascent Micro-soft to IBM's attention.
yeukhon 11y ago
> I think many entrepreneurs are less interested in building Billion dollar companies and are more seeking freedom from suppressive corporate jobs. > Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly. Well, I wouldn't reject to build the next Google and enjoy a fortune and the influence I have on technology and on the world. I think when you are down for building your own business, many people will always look for growth and expansion.
cousin_it 11y ago
Doesn't the tech landscape change too quickly, though? If you start a lifestyle business in tech and adjust your life to fit the new income (house, kids, etc), who says it won't go out of business in the next 10 years through no fault of yours? Doesn't it make more sense to shoot for FU money instead?
- allencoin 11y ago
  >If you start a lifestyle business in tech and adjust your life to fit the new income (house, kids, etc), who says it won't go out of business in the next 10 years The key here would be to not adjust your lifestyle too much. If you can live on $30,000 a year (perhaps necessitating a move to a cheaper part of the country/world), you only need to have about $750,000 invested intelligently in order to live off of the interest (assuming a "safe withdrawal rate" of 4%).[1] Even if you double that cost-of-living, you only need to save and invest about $150,000 per year for 10 years in order to retire at the end of your hypothetical successful lifestyle tech business. As the person you're responding to said, "I think many entrepreneurs are less interested in building Billion dollar companies and are more seeking freedom from suppressive corporate jobs," and that is definitely in reach of a savvy lifestyle tech startup founder. In fact, I've met a few of those. [1]http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...
GamblersFallacy 11y ago
Important myths from around the world which have survived for thousands of years all share a fundamental structure, e.g. "The Hero with a Thousand Faces" The general narrative of "entrepreneur" is singular, not plural. Entrepreneur folklore is the individual (hero) fighting against the collective (culture). https://en.wikipedia.org/wiki/The_Hero_with_a_Thousand_Faces https://en.wikipedia.org/wiki/The_Hero_with_a_Thousand_Faces "The hero starts in the ordinary world, and receives a call to enter an unusual world of strange powers and events (a call to adventure). If the hero accepts the call to enter this strange world, the hero must face tasks and trials (a road of trials), and may have to face these trials alone, or may have assistance. At its most intense, the hero must survive a severe challenge, often with help earned along the journey. If the hero survives, the hero may achieve a great gift (the goal or "boon"), which often results in the discovery of important self-knowledge. The hero must then decide whether to return with this boon (the return to the ordinary world), often facing challenges on the return journey. If the hero is successful in returning, the boon or gift may be used to improve the world (the application of the boon)."
- adrianmsmith 11y ago
  I'm not sure myths can be trusted. I'm sure many people, when they think of Microsoft's founding, think of Bill Gates. And of Apple's, Steve Jobs. But neither were single founders.
  - GamblersFallacy 11y ago
    The foremost function of mythology is to establish models for behavior, not historical accuracy. Notice the hero worship surrounding founders who's business had a near death experience, e.g. Elon Musk and Steve Jobs.

jchendy 11y ago

Do you know of any resources to learn about tech lifestyle businesses?

MCRed 11y ago
All of the "Startup" resources, like The Lean Startup, etc that aren't busy glorifying VCs or the SV model, are useful for these businesses. The only difference between a "lifestyle" business and the "Silicon Valley" model is whether you are in control over your own destiny and focused on building a business, or whether you're selling out to people who want to increase your risk and their possible profits, with the expectation that you'll get a nice bonus in your acquihire. In a way, YC and VCs have ruined startups, by making people think this SV model -- which is great for Facebook, google and yelp, but terrible for the billion other startups is the One True Way.
- rcarrigan87 11y ago
  There is truly a place for VCs and yes some businesses definitely need that kind of funding. But right now it seems VC is so available things are getting funded that will never be able to hit that 10x mark. So businesses that could have been great bootstrap businesses will grow too fast with too high a burn rate and flame out at a series A or B crunch. Meanwhile, if the business could have taken it slower they could have built something really valuable for themselves.
  - afarrell 11y ago
    This is a way that fixing income inequality would help certain entrepreneurs. If more money can come from customers (poor/middle class/small business) rather than investors, then early revenue will be more attainable than early fundraising. Decentralizing economic power would shift our economy away from capital-intensive moonshots and toward consumer products though.
    - nitrogen 11y ago
      Decentralizing economic power would shift our economy away from capital-intensive moonshots and toward consumer products though. This was originally solved by selling stock in a venture to the public.
  - 7Figures2Commas 11y ago
    > So businesses that could have been great bootstrap businesses will grow too fast with too high a burn rate and flame out at a series A or B crunch. Smart, patient entrepreneurs can take advantage of this. Let angel and VC-backed companies validate markets, and pursue the markets they vacate after the broader crunch occurs.
    - czbond 11y ago
      You sir, are a smart man. And the only other person I've ever heard to suggest that besides myself (not tooting horn, just honest that no-one thinks that way).
    - Douceur 11y ago
      That's based on the assumption that the crunch will happen though, and even if those companies flop, I think it's quite important to analyse exactly where they went wrong rather than put them down as just another startup that couldn't scale properly. If you're a bootstrapping startup hoping to enter the same market, this is crucial as you can at least try and avoid those mistakes - who's to say that you won't crash and burn too? (This is more like advice to myself actually as I'm currently in a dilemma between that "wait" that you've just described and the intense worry of not getting first-mover advantage through that waiting)
rcarrigan87 11y ago
The entrepreneur sub-reddit frequently has posts from guys who are starting or trying to start online lifestyle businesses. It's somewhat hit or miss. But if you check it every few days you can find some real gems. Some of the businesses really open your eyes to ways to make money online. The narratives are much less about massively disruptive, world changing startups and much more about making a good living through mostly internet businesses. https://www.reddit.com/r/entrepreneur https://www.reddit.com/r/entrepreneur
- trg2 11y ago
  http://www.tropicalmba.com/best-of-tmba/ http://www.tropicalmba.com/best-of-tmba/ http://www.dynamitecircle.com/ http://www.dynamitecircle.com/
idlewords 11y ago
My advice is to just try stuff and see what sticks. The space of unexplored business models is much larger than what's covered in the typical self-help places.
BerislavLopac 11y ago
I strongly recommend patio11's blog, http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/ -- he's always been a proponent of that approach.
jsingleton 11y ago
The http://www.startupsfortherestofus.com http://www.startupsfortherestofus.com podcast is quite good. Rob also has a blog: http://www.softwarebyrob.com http://www.softwarebyrob.com
- TravisJamison 11y ago
  I'll add to that http://www.microconf.com http://www.microconf.com hosted by Rob and Mike.
hughguiney 11y ago
Pat Flynn’s site and podcast: http://www.smartpassiveincome.com/ http://www.smartpassiveincome.com/
- brosky117 11y ago
  Just found Pat's stuff and I also highly recommend it
ericlavigne 11y ago
"Do you know of any resources to learn about tech lifestyle businesses?" https://unicornfree.com/ https://unicornfree.com/ http://courses.30x500.com/ http://courses.30x500.com/
eli 11y ago
There's a huge spectrum of options between go-huge-or-die-trying mega VC rounds and a lifestyle business that supports maybe one person.

z2 11y ago

Agree completely based on my own limited observations. This emphasis on scaling up (with risk seen as a necessity), combined with an attractive definition of 'entrepreneur' vs 'small business owner' [1], cause people to forget that value can be unlocked in so many more ways. Trading your time for an income could work well for many even if it does not scale or fit the definition of 'entrepreneurship'. [1] http://www.investopedia.com/articles/investing/092514/entrepreneur-vs-small-business-owner-defined.asp http://www.investopedia.com/articles/investing/092514/entrep...

macco 11y ago
The best definition of entrepreneur I know of is the original by Jean-Baptiste Say (https://de.wikipedia.org/wiki/Jean-Baptiste_Say https://de.wikipedia.org/wiki/Jean-Baptiste_Say): “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield”

PopeOfNope 11y ago

tl;dr: owning a business does funny things to people. Make sure you're one of the ones who can handle it in a healthy manner. Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly. Emphasis on the "if done properly." I know a man who own his own american manufacturing company (yes, they still exist). They specialize in electric motors. They do good business despite having fewer than 50 employees and gross about $5M a year. I'm not sure how much of that is profit, but I'm going to guess most of it. The owner is fanatic about keeping costs down. On the other hand, he doesn't have the temperament for business. He's a ball of stress all the time. He's always getting angry over what many here would consider standard business practices. He micromanages his company, especially his IT staff (which is one guy). He's had 4 heart attacks in the past 10 years. He has fewer than 50 employees because he refuses to pass the minimum to qualify for Obamacare (which would raise his costs considerably). He's a good guy, normally, but business ownership has been a net negative on his health and mental status. I knew one other small business owner that was similar. He owned a successful comic book store at the local mall. He did great business and made a lot of money. Then, about 6 month after he opened the store, he noticed that shoplifting was increasing. He then became obsessed about limiting his losses. The idea that somebody could easily steal his merchandise stressed him out beyond measure. Business started going down around then because the changes he made to limit shoplifting also limited his exposure to passers by and made the storefront look unwelcoming. He eventually moved the store to the first floor of a single family home just outside of the city limits. His profits dropped considerably, but so did his losses. His stress also went away; he was no longer worried or obsessed about it. The tradeoff was worth it to him; he literally traded high profit for low stress.

beambot 11y ago
$5M gross is kinda low for 50(ish) employees. That works out to $100k apiece fully-loaded (healthcare, taxes, etc). He would need to be paying them each substantially less than $60k a year.... and that's ignoring all his other costs: materials (it's a physical good), inventory, taxes (property, sales, income), and service fees (attorney, accountant, etc). Only then do you get to his net income. It's likely not very good. Perhaps that's causing all the stress?! Maybe not a fair comparison.... but look at Google, which does $50B in revenues with 50,000 employees -- i.e. $1M in revenue (in a high-margin, software-centric business) per employee.

xiaoma 11y ago

And it's not like being bootstrapped ensures a business won't be a home run. Microsoft, Oracle, Ebay and Github were all bootstrapped.

larrys 11y ago
Microsoft may have been bootstrapped (I will go with what you are saying without verifying) however it also had the backing and full faith and credit of a somewhat wealthy and connected family.
- thaumasiotes 11y ago
  When Microsoft went public, Bill Gates owned 80% of the stock. His wealth, compared to other tech company founders, is essentially all the product of not getting diluted.
  - nostrademons 11y ago
    Think you mean "insiders owned 80% of the stock". Bill Gates only owned 66% of the stock at founding, splitting it between him and Paul Allen, and early employees owned some too.
- adventured 11y ago
  Microsoft did not have the "full faith and credit" of the Gates family. His family figured it would burn out and he'd return to college, per what Bill has said on the matter. They were less than thrilled with him dropping out. He received $0 funding or help from them in regards to Microsoft getting started. It was a million dollar business, completely independent of the Gates family or its connections, while it was operating in New Mexico. Bill and Paul had sales almost from day one.
  - vezzy-fnord 11y ago
    I think this was in reference to Mary Maxwell Gates, who ended up bringing (if not directly) the then nascent Micro-soft to IBM's attention.

yeukhon 11y ago

> I think many entrepreneurs are less interested in building Billion dollar companies and are more seeking freedom from suppressive corporate jobs. > Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly. Well, I wouldn't reject to build the next Google and enjoy a fortune and the influence I have on technology and on the world. I think when you are down for building your own business, many people will always look for growth and expansion.

cousin_it 11y ago

Doesn't the tech landscape change too quickly, though? If you start a lifestyle business in tech and adjust your life to fit the new income (house, kids, etc), who says it won't go out of business in the next 10 years through no fault of yours? Doesn't it make more sense to shoot for FU money instead?

allencoin 11y ago
>If you start a lifestyle business in tech and adjust your life to fit the new income (house, kids, etc), who says it won't go out of business in the next 10 years The key here would be to not adjust your lifestyle too much. If you can live on $30,000 a year (perhaps necessitating a move to a cheaper part of the country/world), you only need to have about $750,000 invested intelligently in order to live off of the interest (assuming a "safe withdrawal rate" of 4%).[1] Even if you double that cost-of-living, you only need to save and invest about $150,000 per year for 10 years in order to retire at the end of your hypothetical successful lifestyle tech business. As the person you're responding to said, "I think many entrepreneurs are less interested in building Billion dollar companies and are more seeking freedom from suppressive corporate jobs," and that is definitely in reach of a savvy lifestyle tech startup founder. In fact, I've met a few of those. [1]http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...

GamblersFallacy 11y ago

Important myths from around the world which have survived for thousands of years all share a fundamental structure, e.g. "The Hero with a Thousand Faces" The general narrative of "entrepreneur" is singular, not plural. Entrepreneur folklore is the individual (hero) fighting against the collective (culture). https://en.wikipedia.org/wiki/The_Hero_with_a_Thousand_Faces https://en.wikipedia.org/wiki/The_Hero_with_a_Thousand_Faces "The hero starts in the ordinary world, and receives a call to enter an unusual world of strange powers and events (a call to adventure). If the hero accepts the call to enter this strange world, the hero must face tasks and trials (a road of trials), and may have to face these trials alone, or may have assistance. At its most intense, the hero must survive a severe challenge, often with help earned along the journey. If the hero survives, the hero may achieve a great gift (the goal or "boon"), which often results in the discovery of important self-knowledge. The hero must then decide whether to return with this boon (the return to the ordinary world), often facing challenges on the return journey. If the hero is successful in returning, the boon or gift may be used to improve the world (the application of the boon)."

adrianmsmith 11y ago
I'm not sure myths can be trusted. I'm sure many people, when they think of Microsoft's founding, think of Bill Gates. And of Apple's, Steve Jobs. But neither were single founders.
- GamblersFallacy 11y ago
  The foremost function of mythology is to establish models for behavior, not historical accuracy. Notice the hero worship surrounding founders who's business had a near death experience, e.g. Elon Musk and Steve Jobs.