[ahoyhere]

This is ONE way to be an entrepreneur, certainly not the only one.

I don't mean to brag, because I'm sure none of you care about my "little dipshit company," but there are people out there who deserve to know that this kind of adrenaline junkie lifestyle as described in the article is not "entrepreneurship" as a whole but just one type of person's interpretation of it.

We, for example, got back a couple weeks ago from a 2-week trip to Arizona. We (biz owners (my husband + I) plus our employee) went to attend a conference in Scottsdale -- not to demand speaking slots or to impress anyone, just to learn, to experience it.

Because, hey, Arizona is gorgeous in October, we had decided to extend our trip and rent a convertible, and a 4-bedroom house in beautiful Sedona, AZ with a private pool and heated spa tub, for a week. We spent 3 days of that as a company retreat, and then the rest was just my husband & I hanging out.

During the 3 days when we were working, we all used the spa every night to stargaze. In the middle of the days, we'd take a break and go hiking. When our employee went home, we just bummed around a day, then we rented a jeep and went off-roading.

This year, my husband and I decided to draw about $160k of profit out of our biz to pay for a mortgage down payment and various fixings for our new (old) house. Then we bought a nice car, in cash. (Honestly I would have preferred to get a loan, but there was a problem with the fact that we hadn't gotten our PA driver's licenses yet. Long boring story. Patched over, as so often, with money.)

Our finances are secure. Our products may be "boring"… but they are growing very nicely and our customers are happy. Our employee can feel secure about her salary. We own 100% of our company… nobody can tell us what to do, except possibly the government, but they don't seem to care. Certainly we don't have to worry about SEC filings.

This weekend, I co-taught a bootcamp as part of my favorite product, 30x500. It's only on a weekend because that's when the majority of my students can attend. I plan to take the next couple days off, just cuz. I can do that whenever, of course… and often do, because I have a chronic illness which is exacerbated by stress. So I keep stress low and live a very chillaxed kind of life.

I expect that, as a 3- or maybe 4-person company, we'll break $1 million in gross yearly revenue in the next 24 mos… probably more like 12-18. All without begging, nagging, scrambling, fundraising, pitch-decking, obsessive emailing, jockeying, etc.

My biggest stress this year is about how to reinvest another six figures into our biz so we pay less taxes (and changing bookkeepers). I don't like paying taxes more than we have to, but honestly I'm not sure what to spend it on after we max out our 401(k)s.

I expect downvotes for this. Probably because it sounds like I'm bragging. Probably because the reason the above article is so popular is because people like it when authors "get real" about the "harsh realities" of running a business. Deep inside, they believe that if it doesn't hurt horribly, it must not be worth it. So this kind of "truth" is appealing, and what I say will be labeled as some kind of crazy outlier, I got lucky, I'm famous, etc, etc., surely nobody could really make this kind of money off time tracking so I must be embroidering the truth, etc.

But if you want to create a business -- as opposed to a drama-filled life -- there truly is a less painful way:

Create a small product for small business which creates value, then charge money for it.

It's stupid simple. It's not easy, but then again, it's not all that hard, either. And it works, over and over and over again.

Yes, our first year building the product income streams while consulting kinda sucked… but it didn't suck at THIS level described by the post author. The main suckitude came from the fact that the more we worked on our real products, the less we wanted to consult… we still never had to travel away from our families, stump, beg, wheedle, or go without money. And we don't have to convince somebody else to buy us, fund us, love us, millions of people to use what we made, to make that short & minor sacrifice pay off.

Sometimes pain is meaningful and necessary. But sometimes it's just pain.

[jessedhillon]

I expect downvotes for this.

I upvoted, but I think this is an important point:

Mark Suster is a VC, and so his perspective will of course have to reinforce a view of the world that justifies the kind of entrepreneurship which requires large financing rounds -- unless he is a very honest individual who can accept that he does a job which is based on principles which he personally cannot endorse (I doubt this).

Conversely, you have a business that revolves around the idea that small(er) ideas can be scaled to large profits -- relative to lower expectations than VC financing, and relative to effort. What I mean is, from what I can tell: as a business, 30x500 forwards the idea that ~$0.5M/yr going into your own pocket for ~40 hrs/wk on a predictable basis is a preferable outcome to the proposition of applying a massive effort toward a very small chance for a single $10M-$100M+ payout.

This is a valid viewpoint as well, but it should be noted that you have an interest in forwarding this kind of a story as a valuable model of entrepreneurship.

I hope you understand that I'm not passing judgment on your model of entrepreneurship, i.e. I'm not saying you have a "little dipshit company." I don't have a preference to either.

[a5seo]

You make it sound like an either-or (income or shot at $10M-100M exit), but it's not.

I was pulling a 500k per year in income from a web business I founded AND got a $10M+ exit. It depends a lot on the business model and multiples.

My advice would be to continue to build the business and balance income and reinvestment until someone makes you an offer that allows you to retire.

Btw, my definition of "allows you to retire" is $250k/yr after tax, drawing no more than 2% of your portfolio indefinitely with a 95% chance of portfolio survival at age 95 assuming below avg market return of 4% and above avg volatility of 10%. If you're in your 30's, that's probably going to be around $20M. It goes down as you get older.

[ahoyhere]

You could easily reach that definition of "retire" with a very part-time effort on a small biz product, instead of a huge liquidity event, too. Not a huge fan of Tim Ferris' whole schtick, but the idea of semi-retirement is a very good one.

[jessedhillon]

What I really appreciate about your approach is that you are willing to identify and stick to specific dollar amounts. Hell, the name of your course is two numbers multiplied! Nice work, really. In SV entrepreneurship circles, I rarely hear people talk about what specific numbers they have in mind as an outcome, I think because the numbers are so big, so rare and so far away that it sounds silly to discuss them with any sort of specificity.

[ahoyhere]

Thanks! You're right, in SV, people rarely talk about real numbers… even to the point of never discussing how much money a founder actually makes from an $x mil exit. Which, to me, is astonishing, since on the other hand all people talk about is numbers (exit numbers)… but not the ones that count for most people.

If you look at the amount of yearly income you want/need, and then look at products vs built-to-sell startups, it's pretty clear how easy it is to achieve that income on a paid product and how hard it is to achieve it from a liquidity event.

[a5seo]

Hey! I just checked out your profile... I ran across your 30x500 site a while back. Looks really cool. Keep up the good work.

After selling my last company, I'm back looking to create another business in the same vein as what you guys teach people to create.

[ahoyhere]

I absolutely agree with you -- the fact that he's a VC has a lot of bearing on what he writes. Ditto for many of the other people whose posts often end up on the front page of HN. Which goes largely without remark!

And you summarized my approach pretty well -- that it's a lot better to have $500k/yr nice and steady and 'easy' than a tiny sliver of the tiniest chance at a $10-100M payout.

There's just one thing which you missed about that: in most cases, a Liquidity Event doesn't lead to $500k/yr for more than a few years, much less freedom, because of lock-in, and dilution, and taxation. A $100m sale is vanishingly unlikely, and most importantly, to get there you will have to have taken on lots of funding, so it's not like that's your $100m sale.

Then what? You have to start over again.

What I really promote is also an investment model, an self-investment in yourself instead of hoping to receive investment from someone else. Assets are the gift that keep on giving. In the long run, most talented people can make far more from my kind of business than they could from an exit (even assuming they could have a fairly good-sized exit!).

Re: "it should be noted that you have an interest in forwarding this kind of a story as a valuable model of entrepreneurship…"

A lot less financially vested than you might think. My class always sells out, with barely lifting a finger… I don't have to be here to stump for the traditional way of doing business in order to make my living. Emotionally, I'm very vested, because I'm tired of watching people suffer simply because they didn't know there was a viable alternative (because the folks who write about entrepreneurship almost all come from the same exact root stock).

[InclinedPlane]

Here is the deeply weird aspect of our industry: it's not monolithic, but so many people think it is even though they should know better.

I think this is largely because software is effectively invisible. Everything software does happens more or less without our ability to directly perceive it, it's just electrons shuffling around in silicon, and it's very hard to get a sense of the scale of anything because even at the high end of the scale where banks of computers are running, it's still just banks of computers humming along invisibly computing, there aren't tons of Earth being moved or ships crossing across oceans and so forth.

Anyway, our industry is one of the most diverse in the history of industry. It spans scales across factors of not just billions but trillions. And it ranges in complexity and seriousness across similar scales.

Imagine the "container" industry, which spans all the way from someone making wicker baskets in their spare time and selling them on ebay all the way up to perhaps the fuel tanks of orbital launch vehicles or the steel reinforced concrete containment vessel of a nuclear fission reactor. Or consider vehicles, which can be anything from a plastic tricycle all the way up to an aircraft carrier. Nobody would imagine that those industries are monolithic or that the way to run a tricycle factory is necessarily the same as the way you'd run a shipyard.

Yet here we are in 2012 and people who should know better still insist that running a "software company" is a singly story with a single set of best practices and a universal set of advice that applies equally well to every variant. In reality a "software company" is one of hundreds of different types of enormously different endeavors.

[ahoyhere]

You're right.

It probably doesn't help that the main "watering hole" for industry professionals is run by an investment firm. People tend to think of HN as simply "the place entrepreneurs go," but that too is a (facilely) monolithic thing! Like attracts like.

[mrkurt]

I have not built a successful company like yours, but I can't imagine the decision to hire employee #1, or health care options, or drama related to a bad hire, or any of the other things that can cause ulcers have been stress free for you guys.

I have unsuccessfully attempted to build an company like yours ... and it was stressful.

[ahoyhere]

Yup, getting started with healthcare was stressful (so we used an agent) and hiring our first employees wasn't stressful but firing them both was. So was getting our (personal) mortgage — that tied my guts in knots for weeks.

But then, like the mortgage, the healthcare and hiring/firing was over and life went back to normal. We didn't have to keep up "a good front" so people wouldn't jump ship, or worry about whether we could make salary, or any of those things. Nobody was breathing down our neck to do any of this, either -- we did them because we chose to. And we were able to make decisions on our own, without having to consult or sell anybody, to change the way we did these things so it wouldn't be stressful next time. For example, shutting down a product which would require us to hire too many people to run effectively, rather than take that on.

That's the power of ownership -- the bad shit passes, and you have the power to avoid it altogether in the future.

Now if you're not making any money, that is another kind of stress, but because we served a hungry market with a product that delivers value (and did a good job of marketing it), we didn't have that problem.

[ccachor]

I'm convinced it's a matter of getting out there and building something. Building or offering something, that someone is willing to pay for, will make you a wage maker versus a wage taker. Tech Crunch, Inc. magazine, etc all kind of romanticize and promote this kind of thing. But, like a lot of things in life, reality is much different than what you think.

[ComputerGuru]

I am 100% with you on this one. I never knew it was as easy as simply building something small and charging money for it, because I was embarrassed to sell my stuff. Then I decided to try it, and wow, was it easy!

[tehayj]

If you are a bit smart with what you do, you can create your own passive recurring income stream that gives you some security and then focus on your startup. I do what my wife and me call "projects" together with her successfully for a few years and we have one of the relaxed, most balanced lifestyles of any person I know... A project usually means creating a new brand for product xy in her case, or a new website / service in my case. But everyone has their own way of doing things. This is how we run our company and it is pretty relaxed and successful so far.

[brazzy]

The article is definitely talking about a specific kind of entrepreneur: the explosive-growth startup founder. To VC types like Mark Shuster and Paul Graham this is the definition of startup and what you have is a "lifestyle business". Personally, I think it's a much better goal.

[charleshaanel]

Upvoted.....

I appreciate your perspective on things - it's refreshing.

However, it's important to note that an either/or "our way or their way" mentality limits one's options.

And there seems to be two worldviews (your terminology by the way ;)) - two cultural camps and people in various communities are basically being asked to choose.

"Either you're with us or them!"

Lifestyle business owners have a mental equation where: Wealth = Net (passive) Income

others view it :

Wealth = Net Income + Asset Value.

The greatest asset an entrepreneur will create isn't its income producing products - it's the sum of the whole - the BUSINESS itself (where there's a multiplier affect involved).

By business I mean the system of 7-8 interconnected parts (hat tip to E-Myth) that combined, create the profitable products and services of the company.

Just like learning how to create a software product or a training product is a learned skill - so too is creating a sellable company (a mentor, John Warrillow of Built to Sell speaks quite well on this....only approx. 1 in 100 businesses are sellable http://www.builttosell.com/blog/)

The either/or mentality can be dangerous. Either you're with us (VC funded startups) or you are with "them" (the lifestylers).

There's a happy medium - Jason Cohen is a voice in the wilderness when it comes to this perspective - http://blog.asmartbear.com/rich-vs-king-sold-company.html.

How about more of a push from influencers in the lifestyle tech business community to help entrepreneurs understand the wisdom of building a business they can sell one day?

What about influencers in the VC-funded startup community standing up and saying "wow, making a profit is actually...a good thing!"

Learning to create a company that is profitable makes sense. Learning to create a company that is customer-funded, just makes sense.

Learning how to create a company that attracts investors-as-trusted advisors and that is sellable also makes sense.

Creating a business that sells profitable products is a different skill set from creating a business that one can sell at a profit.

That said, Dixon gets my respect when he said, "the best source of capital is customers. The next best is the founders (cash or forgone salaries), or investors who are less aggressive about returns than VCs. Every startup has its natural source of financing. Venture capital is the natural source of financing for only a small fraction of startups, despite what the press might lead you to believe." http://cdixon.org/2012/07/19/shoehorning-startups-into-the-v...

I suspect there are more people here than you realize who appreciate the value of what a Dale Carnegie, Gary Halbert, Eugene Schwartz or Kennedy (or you!) have to say about "shutting up and letting people pay you" as much as they do about what a Ben Horowitz, Graham or Suster has to say about the funding game.

Reminds me of what one of the most creative business minds of the past 100 years once said (Olgivy) David Ogilvy: We Sell or Else: http://www.youtube.com/watch?v=Br2KSsaTzUc