[leftnode]

Can a business ever just reach a natural size and say to themselves, "this is as large as we're going to get, we're profitable, having a good time, and everyone is happy."

I realize they have funding and thus a responsibility to maximize their investments, but I'd love to build a company that feels like it has a natural size.

[tmountain]

There's a fantastic hamburger place down the street from my house. They make a fixed number of patties every day and when they run out, they close for the day. The owners are constantly asked why they don't buy more patties or expand to more locations around town. They've repeatedly stated that they're doing just fine with where they are and have no desire to push things further. There's a certain beauty here that's hard to quantify.

[leftnode]

That is an awesome way to run a company. Of course, the nice thing about a software company online is there's never any closing time, but it would be nice to see a software company for once say, "this is big enough, I think we're good here."

Unless, of course, you start to earn a bad reputation for slow support times or bad customer service because your product is so popular, but I guess that is a good problem to have.

Thanks for sharing.

[slapshot]

That is one definition of a "lifestyle business" -- usually a boostrapped small company that reaches a peak that balances the founder's financial interests with his/her interest in free time.

Unfortunately, once you've taken VC money it's very hard to justify not scaling. They are looking for home runs, not bunt singles. If the company stops scaling because the founder doesn't want to scale any more, the founder will be quickly replaced as CEO. If the company stops scaling because the market is saturated, then some very hard conversations will follow.

[tomkarlo]

If you've raised $50M from VCs, who probably expect you to be worth $1bn (so that their stake can be worth $500M or more) you don't really have a choice. Unfortunately, as a company doing 40M in revenue, that probably means they have to grow at least 10x-15x.

The non-financial issue is that if you hire great people and want to keep them, you usually need growth so that their responsibility and comp keep growing. Otherwise, they're going to have to grow by moving on to other companies with jobs that offer more responsibility / opportunity.

[hartror]

Sure, but you will have to either self fund or find investors that share your vision. A lot of family businesses work like that, they grow to the extent they need to to support the family and then stop once they have reach a level of desired comfort.

[hellweaver666]

There are lots of business that do exactly that. Give Small Giants a read, it's really quite interesting.

http://www.smallgiantsbook.com/

[leftnode]

Thank you for that, I'll give it a look.