Lifestyle Business vs. ProductHunt Life

For the past 2-3 years I’ve been following the evolution of the venture backed startup ecosystem from a distance, and I noticed something interesting. I’m not in this world right now and I think that it will take some time before I join it again. (if ever)

I feel that the lifestyle (also known as: bootstrapped) business world is a much better fit for me at this stage of my life.

Corbett Barr from Fizzle.co explains the distinction in a great short video:

“Money (on its own) isn’t the point”

Rob Wailing wrote on his investment company’s website, TinySeed,

“To venture capitalists, a company doing $10m in annual revenue is a miss. To us, it’s a great business.”

I feel the same way.

If you look at it from a founder point of view for example, a company doing $5M per founder in annual revenue that has a 30% margin generates $1,5M in profit (again, per founder).

Assuming you pay a 33% tax on it, each founder makes $1M per year. If you’re not a vintage Ferrari collector, this is more than enough.

Depending on one’s aspirations, the lifestyle business model makes sense also for key team members that influence heavily the bottom line of such a company.

As the company grows, their remuneration grows as well, enabling a great quality of life with healthy savings. And at any point if they wish to, they can make the switch to founder, or even co-found a new lifestyle business with their existing employers, if it’s a good fit.

Stock options, acquihires, IPOs, and exists rarely work out, so one shouldn’t pursue them as the holy grail.

Having worked with venture backed companies for several years and having found one myself, I now say that it’s worth trying it but for a short period of time.

Your age matters

If you are in your 20s, try it for 3-5 years. If it doesn’t work out, then forget about it and switch to lifestyle mode.

And when you try it, don’t be conservative. Go all in.

Pick the most high risk industry where 1 out of 100,000 succeed, as if you make it, it will be damn worth it. If it fails, then drop it and move on.

Most funded startups end up failing or becoming zombies.

The last thing you want is to keep on pushing when you should move on.

Zombies typically reach a point where they can’t scale any more and it doesn’t make sense to continue, as the entire model was based on the hypothesis of endless growth.

Danielle Morrill explained this when he publicly recognized that his Y Combinator startup had a become a zombie back in 2013 (this isn’t new):

My greatest fear as a startup founder isn’t to fail, it is to become a zombie startup. Kind of like in the 6th Sense when Bruce Willis doesn’t realize he is dead and tries to have a nice dinner with his wife, there are startups out there who are still “operating” but might as well not be.

Return on Life

If one could create a parallel between your professional life (i.e. you time) and an investment fund, you would realize that you need to invest your time on the things that generate the best return over time.

And return, for me, is calculated first and foremost by happiness and satisfaction, then by quality of life, and finally by money.

If you are miserable, you don’t like your life, but you have a 320% month-to-month growth, who gives a fuck.

On the flip side, if you can’t make rent, but you are super happy and fulfilled with your life, you’re probably a monk.

The rest of us aren’t :-p

So wrapping this up, I think entrepreneurs who are in their 30s and beyond, need to focus on finding lifestyle or bootstrapped business opportunities that will generate an amazing fulfilling life.

I'd love to hear your comments! Ping me on twitter @akislaopodis

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