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If I have learned one thing from reading HN here it is: If you want ownership (and by that I mean an equal say), you want to do a lifestyle business, not a sta

If I have learned one thing from reading HN here it is: If you want ownership (and by that I mean an equal say), you want to do a lifestyle business, not a startup. Once you start accepting other people's money, you get trapped into their expectations of an exit strategy. That exit strategy ends in one of three ways: 1. Your startup is sold and either you have a regular job or you no longer have any say. Either way you hopefully have some money. 2. Your startup goes public, makes you very wealthy, and now you are beholden to the SEC, tax lawyers, accounting lawyers, etc. 3. Your startup fails and ends. That's it. You may have a great idea, with scalable revenue, etc. But if you want control you have to fund it yourself. That's one reason why I doubt Efficito will ever take investment money (my co-founder and I are on the same page there) from outside parties. Where startups are better is where you want help to achieve greater rewards and don't mind being beholden to investors. That's the decision that has to be made before even looking at incubators.

mitochondrion 13y ago
Not to nitpick, but I don't think that you really mean to say "lifestyle business". When I think of a lifestyle business, I think of a smallish, relatively passive revenue generator. I think that there might be roughly three types of companies: those financially backed through equity, small passive-ish businesses that allow the owner to go off and live their "lifestyle", and boot-strapped (equity intact) active corporations. Personally, I want to retain all equity/control and would choose to dominate the market rather than milk the profit margin. Anyway, maybe I've missed the mark. I'd love to further flesh this out.
- einhverfr 13y ago
  By lifestyle business, I mean one which is a lifestyle, rather one that is tied to the exit strategies of investors. This ranges from a small retail outlet to a growing software firm that is bootstrapped. The difference is that you are interested in long-term earnings on your revenue, not in making it big by selling shares (either via the stock market or by selling the business). The real difference, I think, is that a lifestyle business is not for sale. And that's a deal breaker if by an investor you want to make money by selling your interest.
- misterjangles 13y ago
  Actually a lifestyle company is pretty much the term for any business that makes a great living for the owners and employees, but never results in significant profit for investors. Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back. But this doesn't make it a bad company, despite what you read around here on HN. In reality a lifestyle company can be just about the greatest, most satisfying and financially rewarding job that you can have. You just won't get any investor telling you that because there's nothing there for them.
  - einhverfr 13y ago
    > Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back. It's not actually that they won't get their investment back. It's that they won't get it back in a form that really works for them. If I were to offer a VC an investment plan that would mean reliable payments of 30% of what they invested every year starting in five years and continuing forever, that would not be an attractive deal. Would they get their investment back many times over? Sure. But the thing is, it wouldn't happen all at once as a large payoff.
    - misterjangles 13y ago
      Yea good point. They would probably be more likely to get their money back actually, but it won't be a massive payout.
AKifer 13y ago
Totally agree
mark_l_watson 13y ago
+1 I agree that a lifestyle business is the best way to go for most people, largely because of the control it gives us over our own lives. I just started taking an entrepreneurship class this week, and it has helped me understand that what I have been doing the last 15 years is entrepreneurship/life style business (I live in a low cost of living remote area, and just write and work remotely helping customers as I want to - I work relatively few hours per week and almost all of my work is pleasurable). I compare my business with two friends who were at our house last night. One owns the best Mexican restaurant in town (for 30 years) and the other once owned a bunch of clothing stores. They are also entrepreneurs who have made decisions to work harder and earn more money than I will ever make. My point is that the fun is in making our own decisions about what we want out of life and our careers.
dinkumthinkum 13y ago
"Lifestyle business" is really an HN derogatory term for what most people would just call "financially successful business" ... that may not have ever promised to solve world hunger with a crud application.
- einhverfr 13y ago
  But the thing is, there's plenty of evidence that if most people ran lifestyle businesses a lot of problems, like world hunger, would be a lot easier to solve. Here in Indonesia for example 70% of the nation is self-employed and the per capita GDP is <10% what it is in the US. However, the poorest Indonesians in Jakarta generally have more secure access to food and housing than a significant chunk of Americans.
  - dinkumthinkum 13y ago
    I certainly wouldn't argue with that.

mitochondrion 13y ago

Not to nitpick, but I don't think that you really mean to say "lifestyle business". When I think of a lifestyle business, I think of a smallish, relatively passive revenue generator. I think that there might be roughly three types of companies: those financially backed through equity, small passive-ish businesses that allow the owner to go off and live their "lifestyle", and boot-strapped (equity intact) active corporations. Personally, I want to retain all equity/control and would choose to dominate the market rather than milk the profit margin. Anyway, maybe I've missed the mark. I'd love to further flesh this out.

einhverfr 13y ago
By lifestyle business, I mean one which is a lifestyle, rather one that is tied to the exit strategies of investors. This ranges from a small retail outlet to a growing software firm that is bootstrapped. The difference is that you are interested in long-term earnings on your revenue, not in making it big by selling shares (either via the stock market or by selling the business). The real difference, I think, is that a lifestyle business is not for sale. And that's a deal breaker if by an investor you want to make money by selling your interest.
misterjangles 13y ago
Actually a lifestyle company is pretty much the term for any business that makes a great living for the owners and employees, but never results in significant profit for investors. Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back. But this doesn't make it a bad company, despite what you read around here on HN. In reality a lifestyle company can be just about the greatest, most satisfying and financially rewarding job that you can have. You just won't get any investor telling you that because there's nothing there for them.
- einhverfr 13y ago
  > Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back. It's not actually that they won't get their investment back. It's that they won't get it back in a form that really works for them. If I were to offer a VC an investment plan that would mean reliable payments of 30% of what they invested every year starting in five years and continuing forever, that would not be an attractive deal. Would they get their investment back many times over? Sure. But the thing is, it wouldn't happen all at once as a large payoff.
  - misterjangles 13y ago
    Yea good point. They would probably be more likely to get their money back actually, but it won't be a massive payout.

AKifer 13y ago

Totally agree

mark_l_watson 13y ago

+1 I agree that a lifestyle business is the best way to go for most people, largely because of the control it gives us over our own lives. I just started taking an entrepreneurship class this week, and it has helped me understand that what I have been doing the last 15 years is entrepreneurship/life style business (I live in a low cost of living remote area, and just write and work remotely helping customers as I want to - I work relatively few hours per week and almost all of my work is pleasurable). I compare my business with two friends who were at our house last night. One owns the best Mexican restaurant in town (for 30 years) and the other once owned a bunch of clothing stores. They are also entrepreneurs who have made decisions to work harder and earn more money than I will ever make. My point is that the fun is in making our own decisions about what we want out of life and our careers.

dinkumthinkum 13y ago

"Lifestyle business" is really an HN derogatory term for what most people would just call "financially successful business" ... that may not have ever promised to solve world hunger with a crud application.

einhverfr 13y ago
But the thing is, there's plenty of evidence that if most people ran lifestyle businesses a lot of problems, like world hunger, would be a lot easier to solve. Here in Indonesia for example 70% of the nation is self-employed and the per capita GDP is <10% what it is in the US. However, the poorest Indonesians in Jakarta generally have more secure access to food and housing than a significant chunk of Americans.
- dinkumthinkum 13y ago
  I certainly wouldn't argue with that.