Some 20 years ago, I knew I wanted to own my own company. At the time I couldn’t differentiate between being the CEO of a company and owning the company. As the years went on I began to realize the differences, but it never changed what I wanted. Throughout college, I watched as many of the people I knew seemed to be doing just about anything they wanted after starting their own businesses. They had nice houses and drove nice cars. A $200 bar tab on a Thursday night was no big deal, even on a regular basis. They did what they wanted, when they wanted, and didn’t let the little things stand in their way. It seemed like quite a nice life to lead, but how to get it was always the question. I mean, knocking one of them off, taking over the business, and snuggling up to their lady friend wasn’t exactly an option. At least not a reasonable one.
As I graduated college, the sad realization eventually crept into the dark recesses of my mind that I’d have to do somehow manage to put together a successful business myself. But where to start? Do I really want to do all that work? Wouldn’t it just be easier to stash my money away and invest it over time, gradually dragging myself out of the lower class of society? The short answer was no. The longer answer was that money was not the problem. I had a well paying job in Rochester, NY where I made more than twice the median household income. My rent was a mere $250/month and I regularly spent between $2,000 – $3,000 every month on miscellaneous ‘crap’ ranging from new computer equipment, to very nice dinners at 2 Vine down by the Little Theater, new DVD’s for my collection, several road trips, an interesting vacation to Trinidad, and frequent outings to the bars.
But I wasn’t particularly happy. I made more money than most of the people I hung out with on a regular basis. I never had a problem getting a date, whether it was the weekend or not. I generally did whatever I wanted and whenever I wanted. So what was the problem? Very simple. My 20 year old dream lay unfulfilled.
On the surface, this idea seems to be a bit foolish. Why break your back starting a new business if you already have the financial freedom to do pretty much anything you want? Why indeed? The bottom line is that money doesn’t equal happiness. There are a lot of things we developers want more than money. That’s not to say that we don’t want money at all. It just means that money isn’t everything. Somewhere out there, someone has an uncontrollable urge to email me to tell me how wrong I am or call me and scream like a madman “Forget happiness, show me the money!”. That person is probably living paycheck to paycheck and just barely getting by. Sooner or later, your circumstances will change. Then you’ll understand that when you have enough money to live comfortably, other things become more important.
As I was saying, my dream lay unfulfilled. I wanted something different, but I still didn’t know what. I just knew that making more money than most of the people around me wasn’t making me happy. I moved to Boston where I worked at a venture capital funded startup company. After a year and a half, it was bought out. The company founders cashed out a short time later and retired. To many developers, this is a dream come true. You work hard for a few years, your company sells for millions, and you can retire to do anything you want.
From a strictly financial point of view, this is a great way to become financially independent if you can pull it off. I think that if given the option, most people would sacrifice two or three years of working very hard for an amount of money that was from five to ten thousand times more than they would make in their entire live at a typical job. Alas, not every startup company is successful. The truth of the matter is that very few company founders are really that lucky and many walk away from the experience with not much more than their paycheck and battle scars.
This process appears to be more about luck than anything else. If it were indeed based on skill, there would be groups of people who did nothing but churn out successful companies every 2-5 years. The few people who have several successes to their credit seem to be an aberration in the statistics rather than in possession of an abundance of business savvy not found elsewhere. You would be hard pressed to find anyone who thinks that government run lotteries are skill based, yet people have won large prizes multiple times. Are they more ‘skillful’ than other lottery players?
The answer is no. Admittedly, this is a somewhat poor example, as venture capital funded businesses (VCFB’s) have the ‘collective wisdom’ of all of the investors who must think something is a reasonably good idea. And they’ve seen other business plans than yours, so there must be some experience that they’re drawing on to make that determination. The people executing the business plan also have some degree of experience. On the other hand, playing the lottery is just blind luck. The point would be better made if it were compared to a card game such as poker, where elements of both skill and luck are present. You can be well acclaimed as the best poker player in the world but if you bet it all and your rookie opponent has a straight flush, you’re probably going to lose and it doesn’t matter how good you are.
An example of how bad luck can play a part of the process is available from just a short time ago. Kiko was a web based calendar funded by a Boston based Venture Capital group called Y Combinator. Obviously, people thought that a web based calendar was a good idea. Then Google released their own calendar. In short order, Kiko closed up shop, sold the source code and moved on to something else. Paul Graham, one of the VCs behind Y Combinator, stated “This is not an expensive, acrimonious flameout like used to happen during the Bubble. They tried hard; they made something good; they just happened to get hit by a stray bullet.” Getting hit by a stray bullet is what I would call bad luck, which merely emphasizes the role that luck can play.
Thus far, we’ve determined very little more than the idea that having money doesn’t mean you’re going to be happy and that a VCFB can make you filthy rich. But if you are filthy rich and you’re still not happy, then it doesn’t make any difference how much money you made. So if all that money isn’t going to make you happy, why should you bust your ass for anywhere from 2-5 years, working 60-80 hours/week only to end up unhappy at the end, or worse: unhappy and without all that money you tried so hard to make. Until you decide what is truly important to you, you should wait before starting your business. That is true whether you plan to self fund your business or whether you want to pursue venture capital funding and shoot for making gobs of cash.
Scene from Office Space:
Peter Gibbons: Our high school guidance counselor used to ask us what you’d do if you had a million dollars and you didn’t have to work. And invariably what you’d say was supposed to be your career. So, if you wanted to fix old cars then you’re supposed to be an auto mechanic.
Samir: So what did you say?
Peter Gibbons: I never had an answer. I guess that’s why I’m working at Initech.
If you’re anything like me, you’ve realized that money isn’t everything. There are other things that are far more important and money is a means to an end, not the end itself. The reasons for starting your own business vary widely from one person to another and while some people choose to start their own business solely for financial reasons, a much larger percentage of people choose to start a business for lifestyle reasons.
What is a Lifestyle Entrepreneur
A Lifestyle Entrepreneur is someone who has decided to build a business to make a living and satisfy his own personal motivations. Personal motivations will vary from one LE to another. One LE might start his own business to cut down on the travel that he must endure to spend time with his family, while another LE might start his own business to increase the amount of travel she must do in order to see the world. Still others might decide that working in the corporate world has essentially sucked their will to work there any longer and set out to build a company where they want to work instead. A Lifestyle Entrepreneur doesn’t start a business to work less. It’s a lot of hard work, especially in the beginning. But assuming you’re reasonably successful and good at what you do, you can eventually set things on cruise control and coast along, living the life you want while not reporting to people whom you probably never liked much anyway.
I started Moon River Software out of a burning desire to be in control of my own destiny. Recently, I had a consultant on site who was amazed that we worked from 8am-5pm. Currently, he works from around 6:30am to 6pm five days a week. He also works at least every third Saturday, sometimes every other Saturday. Thanks, but no thanks. I’m not going to work ghastly hours for someone else’s benefit when I’m not getting anything in return other than gratitude. I wouldn’t expect my employees to submit to that either.
In the past, I’ve watched as corporate projects stretched for days, weeks, or even months in just the design phases while people decided what they wanted to do. Meanwhile, I sat idly twiddling my thumbs waiting for someone to make a decision so I could get some work done. I’ve done this so many times I could be captain of the U.S. Olympic Thumb Twiddling team without a problem. It goes without saying that the ability to make a decision and just run with it is also what drives me as a Lifestyle Entrepreneur.
Something that many people overlook is the money aspect of being an entrepreneur. Just because I’m a Lifestyle Entrepreneur, that doesn’t mean that I don’t want to make money. Far from it. I want to be financially successful just as much as the next guy, but I also want to be in control of my future. In Massachusetts, employer rule comes first and all employees are at-will. Which means the company can fire you at any time, for any reason, or for no reason. The current unemployment rate in the US is hovering around 5%. It’s safe to say that the vast majority of people lose their job at some point in their lifetime. Whether you get lucky and are laid off from your high school job and that’s it, or are laid off after working for Kodak, Xerox, and Paychex in three consecutive years is a matter of luck. My little brother was seven when he ‘lost’ his first job. He used to take the trash out for a nice lady in town who was a friend of our grandmother. Eventually, the woman died, and he wound up ‘unemployed’. Don’t think it can’t happen to you.
As the business owner, the company could fold and I’d be out looking for a new job, so owning the business doesn’t make me untouchable. This way, I’m at least in control of the situation and wouldn’t be blindsided by a corporate cutback or a corporate buyout that I didn’t see coming. For many people, being laid off is what helps nudge their entrepreneurial spirit out the door. The cold steel door of the corporate office slamming behind them is a reminder of what can happen when they aren’t in control. With the average American family having only about $3,800 in the bank as of a year ago, losing your job can be terrifying on many levels. If you have time to plan for it, at least you could make ends meet. But to lose your job without warning is going to be a bit stressful.
Something that’s really nice about being a Lifestyle Entrepreneur is that the only person you need to work hard enough to please is yourself. You don’t have investors peering over your shoulder, questioning every action, or every business deal you make. So long as you’re making ends meet for the business week in and week out, the pressures of being the business owner are minimal. You aren’t bound to impress others, or make shareholders happy. Your quest lies with making ends meet such that it fits your lifestyle requirements. Anything beyond that is considered to be profit.
How do I know if being a Lifestyle Entrepreneur is for me?
If you’re asking this question, then you’re on the right track. The best way to find out is to ask yourself just one simple question. Am I happy? If the answer is a definitive no, or “I’m not sure”, then you should write down what’s making you unhappy and figure out whether owning your own business would solve those problems. If owning your own business won’t solve those problems, then don’t start a business. Over the course of my career, I could have made the following list of things that was making me unhappy, and most of them were associated with my job or my career.
1) I don’t feel like I make many meaningful decisions at work.
2) The hours of this job interfere with what my life is really like.
3) I’m not empowered at my job. I spend most of my time waiting for other people to make decisions before I can get any real work done.
4) This company is making tons of money and they’re too cheap to buy me a decent chair or a decent computer.
5) I have no idea where the future of this product/company is going. No one else seems to know either.
6) That lazy, good for nothing $&*#$*#. Am I the only one who sees this?
7) I don’t get paid enough to deal with this garbage.
If your list of gripes looks anything like this and you want the power to get these things fixed, then being a Lifestyle Entrepreneur could be for you. I left out a lot of personal things that were goals rather than gripes. For example, several years ago I wanted to own my own house. But when your rent is only $250/month, it’s hard to justify a $1,250+ mortgage. I wanted the house, but not the mortgage and that just wasn’t going to happen. Don’t be afraid to put personal items on your list. It’s not as if you’re publishing them like I am here. But don’t think for a minute that personal things don’t affect your happiness. If you’re in the middle of a divorce, it could get ugly, and a job change isn’t going to make a difference. On the other hand if you don’t see your kids enough, then starting your own business could be the change that you’re looking for.
What do I need to be a Lifestyle Entrepreneur?
I’m not going to lie to you, becoming a Lifestyle Entrepreneur is hard work. Making ends meet isn’t the easiest thing in the world to do. There are a lot of naysayers who try to bash the Lifestyle Entrepreneur, while misunderstanding what it means to even be a Lifestyle Entrepreneur and attempting to further their self interests. My favorites are the people who say that a single founder business can never work. But I know a lot of people who are doing it quite well. I can name a half dozen off the top of my head and know at least a dozen others whose names I’d have to check my email to remember.
The most common factor among all the Lifestyle Entrepreneurs I know are passion, drive, and common sense. Even when things don’t seem to be going well, the ability to buckle down and do what needs to be done has kept these people going and has kept their businesses afloat. The ability to persist in the face of failure is essential. There will always be someone out there who will tell you that it can’t be done, or that your way isn’t going to work. Who are they to tell you that? I bet nobody ever thought it was possible to build a multi-billion dollar business starting in a college dorm room, but Michael Dell did it. Nobody ever thought you could build a computer business in your garage but Steve Jobs and Steve Wozniak did it. I read time and time again how I’m going to end up failing because I’m running a single founder company.
Whenever someone tells you that something isn’t possible or isn’t a good idea, try to look at it from their point of view so you can understand why they might think or say that, knowing that they’re not necessarily the same reason. Just this past week, I announced Moon River Software’s Goals for 2007. Within 24 hours, I received an email from a friend warning me of some of the pitfalls of my future plans, specifically in reference to Goal #2 of Moon River Software no longer accepting or doing contract work. While I certainly appreciate that he was willing to share his own experiences, there was no cause for alarm. A quick email to him privately explaining the circumstances and he quickly understood what I was doing and that it made sense.
The bottom line is that you know your business better than anyone else. For someone else to look at your business without knowing everything and tell you that it’s not going to work is somewhat ludicrous. When you look at it from their point of view, ask why they think that. Are there things you know that they don’t? Are you willing to share those things? And while you should take their warnings with a grain of salt, you should never disregard them entirely. It’s quite possible that they’re right. You could be so tied to your business plan that you just don’t see how people wouldn’t want an Oompa Loompa doing their dishes, nevermind the fact that every Tuesday, the kid with a marble up his nose disappears for a week. After all… the dishes are clean and the house is quiet. What’s not to like?
Where to now?
If you’re considering starting your own business, my advice to you is to stop waffling and get started. Mike’s first law of business applies here. A business not doing anything will continue not doing anything until you get off your duff and start pushing. Once you’ve started, you will find that over time it becomes easier and easier to keep your business going day in and day out. Just make sure you remember that getting it rolling will seem impossibly difficult. Every day, make an incremental improvement in your business. Eventually, instead of pushing your business forward, you can guide it from the sides as it rolls down the hill. The avalanche of success will eventually follow.