Poll: Are you looking for an exit, or building a lifestyle business?

https://news.ycombinator.com/item?id=6970735

by japhyr • 13 years ago

58 55 13 years ago

news.ycombinator.com

japhyr3• 13 years ago

I am mostly interested in using my technical skills to solve long-standing problems in education. I want to get paid close to market rate for the work I'm doing, but I am much more interested in leading a long-term project than building something quickly and selling.

Most of my work is open source, but I would also like to use my growing skills to build something closed at some point, in another domain. Even then, I would rather build something small that I can maintain and grow without funding, than jump on the VC train.

That said, I have nothing against people who are using the VC model, and I understand that capital is quite necessary for building many businesses.

lloydt3• 13 years ago

Traditional education is really tough for venture. Teachers are probably the most change averse folks in the world. I applaud your desire make things better. VC hasn't historically mixed well here.

You might consider alternatives like http://www.newschools.org/, http://www.gatesfoundation.org/what-we-do

I've Spent time trying this myself (both writing software and in the classroom). Its a hard nut.

lloydt3• 13 years ago

Started with a plan to prove our business first as a lifestyle business. Got customers, got usage, got revenue. We raised our first round when cash flow positive (which was much easier to raise, because we had a real business). Then a year later even a bigger round. Make it a real business first. Don't start life as a capital crack baby.

japhyr3• 13 years ago

Once you had revenue, did you feel like you had to take funding? For example, without funding you would have lost so much traction that you would have been unable to continue building your business?

lloydt3• 13 years ago

No, we never felt pressure to take funding. We thought of funding is a tool to speed things ups. We built our product, customer base first. The first versions were rough and needed our involvement to a much higher degree then it does today.

We decided "we can grow faster then our revenue if we have cash". We raised our seed from investors we knew well that would have been happy with dividend returns.

After another year, of great traction we decided to go for an 'A' to prove out the sales model. We still had 3/4ths of the seed round in the bank at this point so we only needed the money for growth, not operations.

brickcap• 13 years ago

I am looking to build a lifestyle business. Even if my startup fails to generate any revenue I hope that it will prove to be a good advertisement of my technical skills and I will succeed in getting some well paid freelance jobs so that I can remain independent.

tyw2• 13 years ago

Our business has been profitable from the start and is now a pretty comfortable lifestyle business, but I don't know as any of us want to still be running it 10-20 years from now, so an exit certainly wouldn't be out of the question.

xplorer• 13 years ago

Can you tell us what kind of biz is it ?

tyw2• 13 years ago

http://www.audiomack.com

I wrote most of the code for Audiomack. Free music hosting for artists. Predominantly hip-hop/rap because my cofounders have had other ventures aimed at that genre over the past decade or so, but audiomack accepts everyone. We'd particularly like to make inroads into electronic & dance music.

Started it in our spare time, launched Feb '12 and I went full-time in May '13.

edit: interview with my cofounders for anyone interested in the ideas behind audiomack http://www.youtube.com/watch?v=6S1Vb0PE7w4

stephen_g• 13 years ago

Is the definition of 'lifestyle business' 'a company you want to run for the foreseeable future?' I think that's too broad a term (because such a definition would include even some huge, high earning multinational companies)...

guiye• 13 years ago

I'm trying to be independent but I'm not sure if freelancing, building some personal startups, or doing apps for getting money, or everything together! But my objective is to work less and enjoy my family

bhouston• 13 years ago

My initial goal when I started my own company 8 years ago was to create a sustainable company. Given that I had a pure programmer background with no real business training (this is my nerdy very old programmer website: http://exocortex.org) at the time I started my company, this seemed like a big enough goal to tackle.

8 years later the company I started still exists (http://exocortex.com, software plugins and consulting) and has hundreds of specialty clients and pays real salaries and has been profitable for years, but it isn't headed for an exit itself. So it is firmly a lifestyle business.

That said, we started something like a "start-up" within this lifestyle business that has more growth potential (read: exit potential) but also more risk (http://clara.io, a web-based 3D editor/rendering/publishing tool.) More examples of what can be done with Clara.io can be found on our Facebook page: https://www.facebook.com/Exocortex

I guess once you've got the lifestyle business established, you can then go and look for larger opportunities.

AznHisoka• 13 years ago

I'm happy with either. As long as I'm not stuck as a cube rate, all's good!

kybernetyk• 13 years ago

You forgot the "long term business" option.

elohesra• 13 years ago

Startup culture in general seems to have forgotten that option.

coldtea2• 13 years ago

Maybe not so much forgot it, but bundled it into "lifestyle business".

Amazingly, people using the term to mean every kind of steady growth company (as opposed to some exponential growth byout-IPO style exit vehicle).

So, 37 Signals say, with tens of millions in revenue, tens of employees and 12+ years in business is also labeled a "lifestyle business".

pvnick2• 13 years ago

I'm building a diet and exercise website that gets people started with leangains (look for a launch in the near term future!). I've got a business plan, and I want to make just enough money to fund my travels around the world for a few years until I turn thirty and start a family. After that, who knows...

thinkr• 13 years ago

This sounds interesting to me as I have been doing leangains for a little over 2 years now (although not strict). I would love to hear more about your project and maybe I could even provide assistance in some form.

pvnick2• 13 years ago

Nice, I'm glad to hear it. A few months ago a guy named 31minutes who claimed to be an old client of Martin berkhan did an AMA on the leangains subreddit and filled in a bunch of blanks on what we know of the leangains method. As of now we have all the details needed for an app that takes in some of the persons stats and plans caloric and macronutrient needs for their intended goals. My app does this and hooks up to the USDA food database to make planning the diet super easy. The MVP is about ready to launch but soon afterwards I'll need a UX engineer since that's my one weak point.

jcshep• 13 years ago

I'm attempting to build something that will pay the mortgage and put food on the table. To me, that's the difference between waking up and working on something meaningful or accepting project to pay the bills.

mmaunder• 13 years ago

This question is so naive and it's loved by the lazy because it lets them indulge the fantasy of either telling their boss to get stuffed and getting paid for doing very little (lifestyle biz), or getting paid millions and never have to work again (exit).

I really dislike this question and I tend to distance myself from entrepreneurs having these kinds of conversations. Even if you want to exit early or have lifestyle, it's an unhealthy way of thinking about entrepreneurship.

How do you think Steve Jobs would have answered this question?

davidw• 13 years ago

How do you think Steve Jobs would have answered this question?

Err... you talk about naive, and then cite an outlier amongst outliers?

I'm not Steve Jobs - I'm much more average, and I've made my peace with that. I think I can eke out a niche for myself where I can live comfortably though, so focusing on that makes much more sense to me than trying to ape someone who lived a very different life from mine. As far as I know the only thing I have in common with Jobs is having resided in Oregon.

martius• 13 years ago

I think (at least I hope) he was doing irony.

japhyr3• 13 years ago

getting paid for doing very little (lifestyle biz)

You couldn't be farther from my understanding of what a lifestyle business is. I understand a lifestyle business to be one that you plan on making part of your life for the long term. It is meant to provide enough income to live at a certain level (ie lifestyle), but not necessarily to become filthy rich, or result in an IPO, or some other exit point.

What makes you think a lifestyle business implies that people want to be lazy?

dminor• 13 years ago

"Four Hour Work Week"

coldtea2• 13 years ago

This question is so naive and it's loved by the lazy because it lets them indulge the fantasy of either telling their boss to get stuffed and getting paid for doing very little (lifestyle biz), or getting paid millions and never have to work again (exit).

No, the question is loved (sic) because it's an important decision to make, and it leads to totally different ways of business development, relationship with investors and such.

I really dislike this question and I tend to distance myself from entrepreneurs having these kinds of conversations.

Well, it's not like it's their loss.

How do you think Steve Jobs would have answered this question?

Judging from what he actually did, he would answer that "fuck exits", he's going all the way.

Ologn2• 13 years ago

Most of us spend our time writing code once in order to automate tasks forever, the whole point of which is to increase "laziness". As many have said, laziness for the programmer is a virtue.

As far as lifestyle businesses, the term is itself a strawman that antagonists to the concept use, then you just knock down the strawman. I can't think of a good term for this type of business - I could say bootstrapped, but bootstrapped might just mean taking no angel money, but hoping for VC at some point.

While exit implies a buyout, it could also mean an IPO. I'm not sure what kind of business you are thinking of when you do not like any of the kinds that have been mentioned.

I do not have my sights set on an angel to series A to series B to IPO treadmill. Although market circumstances can change so who ever knows? If building a "lifestyle" business with the goal of doing higher level interesting work instead of drudge CRUD work, and having time for exercise, friends, family and leisure after working 40 hours is lazy, then call me lazy.

sprocket• 13 years ago

My wife and I are in for the lifestyle/long term. 3 years back, we'd decided to move out of the city into a more rural area to start building a farm business. We've built up a herd of about 50-60 dairy goats in that time, as well as produced some of best pasture raised chicken, ducks and eggs you'll find. We've just finished all our approvals and licensing to start building and operating a cheese making facility on the farm, hopefully due to start operation this spring. My exit plans aren't for another 15-20 years or so, at which point I figuring farming will've taken its toll on my body.

poulsbohemian• 13 years ago

Sprocket - I don't see any contact info in your profile, but would like to talk to you about your business, as it is very much in line with my long-term goals as well. Would like to compare notes a bit. If you are interested, contact me at jeff -at- mercenarytech -dot- com

graeme• 13 years ago

Lifestyle business. I want freedom to do what I want, when I choose. I've created something that more or less allows me to do that.

mindcrime• 13 years ago

I'm looking to build a large, sustainable business for the long-term... a company than can IPO someday and become an institution that stays around long after I'm gone.

tlongren• 13 years ago

I just want to grow my business and keep on running it. Have no intentions of exiting.

tgflynn• 13 years ago

I want to start a business that gives me the freedom (in terms of both money and time) to pursue my real goal, which is to build advanced general purpose robots. So I guess that's kind of like a "lifestyle" business but doesn't have much to do with what the term "lifestyle" usually implies.

I checked option 3.

seivan• 13 years ago

I'm just looking to finish one of my damn (never ever profitable) apps, heh.

brentm• 13 years ago

I think regardless of what the majority is saying, most people want an exit of their business eventually. Even if only for the fact that being able to work on something new is fun and challenging.

buckbova• 13 years ago

Currently I'm working as a database architect but, I would love to consult or start a development business.

The most difficult part I see is where I'd get clients. Seems like I'd need to specialize in some CRM/etc or have a really good network to draw from.

d0m• 13 years ago

(Both)

zoltar92• 13 years ago

It's ironic... Doesn't it seem businesses you build with the goal of an exit turn into lifestyle businesses-- while the ones that you build as a lifestyle business tend to be the ones you get the most offers for. I guess it goes back to the YC teachings of "Build something people want". I think therefore you need to strive and be happy for your company to be a lifestyle business, even if your ultimate goal is an exit- or else you'll never have the passion to actually turn it into something worth exiting. I chose option 3 because I think every business is therefore a bit of both. Because conversely, even a business which someone builds as a lifestyle-- will eventually exit if the "price is right".

For anyone that's going to claim snapchat as an example of this not being true-- I'd argue they're waiting for a higher valuation or to monetize and then go public-- both exit strategies

tuke• 13 years ago

The phrase "lifestyle business" is reductive and simplistic.

What about: High-quality, mission-driven, sustainable, impervious to fashion, self-motivated, resistant to the incursions of finance capital . . .

I could say similar things for the word "exit," since there are many different kinds of "exits," but I will leave that for someone else with more skin in that game.

MWil• 13 years ago

I went to law school thinking I would come out a lawyer. Makes sense, right? Quickly, I found that I was having to use tools and websites that seemed to be designed to actively make the job of legal research harder than it needed to be. Not only that, but anything "digital" or "electronic" really just seemed like someone said "put up the paper version on a screen" with no recognition of what web technologies were capable of.

So out of those three choices, I would say the third is most applicable assuming "exit" means a buyout/sale of shares. I'm not looking for an exit or to run a lifestyle business. I'm forming a business that I'll hand off the reigns to at some arbitrary point in the future, unrelated to financials, when I feel like I can finally be the badass super lawyer I know is possible when these tools are built.

paul9290• 13 years ago

We created a superior wireless audio technology! Superior to BlueTooth Audio and Apple's Airplay, as it works across infinite distances & on varied VERY FAST ip networks.

Here's a demo of our tech http://SpeakerBlast.com.

We are actively looking for help and or an exit(we own IP on this).

chaser7016• 13 years ago

That's a bit of a stretch to say you created a better standard then Apple and all the others out there!

founder4fun• 13 years ago

Yeah I don't get the comparison!?

The app he links to just plays audio in sync on two or more smartphones!

meira• 13 years ago

I'm running a lifestyle business while looking for an exit when it's time and start another lifestyle business.

chromaton2• 13 years ago

I hate that term "lifestyle business". It sounds like I'm running a website selling yarn in order to fund a knitting hobby.

brandonbloom• 13 years ago

How is that any different than running a website selling a program in order to fund your programming hobby?

chromaton2• 13 years ago

It's not. Neither has a minimal goal of "making a living".

christiansmith• 13 years ago

I'm really glad you have a third option there. Don't get me wrong, I love money and the things and experiences it can buy. But when I die, I want my life to have been about more than collecting the most toys. I want to create useful, beautiful things that improve the here and now for as many people as possible. A stretch goal would be for some of that work to outlive me.

To me hacking and startups are a lot like music. I got into music because I liked listening and wanted to make my own. I went to music school because I wanted to be a better musician. The idea of making money was only a means to continue making music. The thing is, if you get very good at making music that enough people want to hear, opportunities to make money doing it will find you.

The same is proving true with software. After some startup failures that involved putting the cart in front of the horse, I decided to just concentrate on writing good code and solving difficult problems that interest me. Instead of looking for capital, I've hunkered down in the middle of nowhere so my own funds will stretch as far as possible. A great deal of my work right now is open source. And so two interesting things happened this past year. First, other people showed up to help work on it. And then miraculously and completely unsolicited, someone came along and offered to pay me damn good money to keep working on it. If a few more do the same, I'll form a company, call it a startup, and find a way to deliver the value of this software as a service.

Supposing it goes that direction, I wouldn't think of it as a lifestyle business, because I'd like to see it grow into something more than that. But I also wouldn't be thinking about an exit, because it's not at all clear if and when that would be a feasible or desirable outcome. Lifestyle and big exits are both just side-effects of making something that's valuable enough to other people that they'll part with hard earned money for it. That's the only goal that should matter to a startup.

FollowSteph3• 13 years ago

I wonder how many people change their goals after running a lifestyle business successfully for 5-10 years...

TamDenholm• 13 years ago

I'd say both, I bought a business 3 months ago, it was making £18k a year, i've got it running at about £40k a year now through basic cost cutting and automation using technology. I plan to bring it up to £60k a year without growth and then grow it to £150k in the next 2-3 years, after which i'll likely sell it for ideally £300k and move onto the next thing.

I'm not here to swing for the fences, i've not taken any investment, i'm not going to run anything unprofitably. I'm here to make a real impact on businesses using my skillset and have fun and make money doing it.

Its really hard work but I'm enjoying the hell out of it.

michaelochurch• 13 years ago

I'm 30 and have had 7 jobs since leaving school, including two pretty negative startup experiences. I've learned to think beyond a single job, and that would apply to a business, too. You don't really get to control these external variables. Your investors might pull funding, fucking up your reputation, for any reason or no reason at all. Shit changes. Businesses implode, firms contract. I had the CEO of a well-regarded (though less so, these days) VC-darling startup spend months trying to destroy my reputation. I survived it because, by that time, I was already really good at what I do.

You just have to do the right thing with the cards you're deal, and play strategically for long-term excellence rather than getting seduced by quick hits (and that's hard to do, because most people are after the latter).

My goal is to keep getting better. I can control the rate at which I learn new skills and become better at the work. If the best move is that I start a business and the opportunity is there, that's what I'll do. On the other hand, if the best thing for my career is to join a 5000-person company where I have to wear a suit every day, I'll do that.

People talk about 501 programmers (those who leave, on the dot, at 5:01 pm). I call myself a "121 programmer", as in 1% per 21 days. Every 21 days, I expect to increase the total value (a somewhat abstract concept) of my entire skillset by at least 1% (19% annually). Obviously, this abstract quantity can't be measured on the order of weeks, but if I pass too many 21-day checkpoints without being able to justify to myself that I'm 1% better than I was 3 weeks ago, I start to get nervous.

Ologn2• 13 years ago

Back in 1998 I was making $70k and had everything I needed. I was bumped to $80k in 1999 and now had more than I could spend. The extra $10k did not alter my spending habits any, other than I did not have to space out buying big ticket items (say a new laptop or other expensive purchases) as much. Of course I was saving as well.

Of course people have children, need retirement money etc. and money needs can increase. But as some studies have shown, once you hit an income that puts you in the top 10% or so of income earners, there is diminishing utility to each extra dollar you get. At some point a well paying job you enjoy is worth more then one you do not enjoy paying double.

A lifestyle business is the business you want to create. You usually don't have to deal with investors or all that that entails including the type of business it will be and its goals.

And as someone else here said, it often winds up the case that the lifestyle business is the one that gets the big exit offers, as opposed to the ones designed from the get-go as a vehicle for getting investments and an exit.

Poll: Are you looking for an exit, or building a lifestyle business?

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