[iamwil]

Will college tuitions be more than a million or two? Perhaps if the education bubble never bursts. Or if you have more than five kids.

Regardless, his article compares owning your own business with a million or two trickling in instead of $40 million (or more) all at once. The comparison isn't at all about the starving artist or inventor doing what he loves vs a big pay out.

If you're doing what you like and you're earning a mil or two a year (or well on your way), why sell out all at once for $40 mil? If your reason is other than getting to mojito island, he makes no claims.

But if your reason is because you want to get to mojito island, then Jason Fried is warning that it's probably not all it's cracked up to be.

[mseebach]

> If you're doing what you like and you're earning a mil or two a year (or well on your way), why sell out all at once for $40 mil?

Let's say $2m/year - a sellout now at $40m is 20 years (if we (unrealistically) discount inflation and interest etc.).

You love what you're doing, but who knows what everything's gonna look like in 2-3-4 years, much less 20? Google might decide that DHH is a punk and make improved clones of the entire 37s portfolio and release them for free. 37s may have a breakdown and find out that their backups for the past month are corrupted, and never regain customer confidence. The concept of SAAS/cloud might be compromised by Patriot Acts III-VI. All those are worst-case scenarios, but there are a million other events that could at least compromise the $40m price-point -- so waiting and taking the money later isn't a backup-plan.

If you take your $40m now, you're insured against all that, and also against growing bored with the project and conflicts with co-founders or key employees -- and the buyer just might let you work, even on salary, on the project.

Passion now != passion in 20 years. Actually, I'd venture as far as saying that if you're sure your current passion is going to last, it's not real passion.

[replicatorblog]

I know MBA's aren't the most popular people around these parts, but they do get Net Present Value. Basically, you need to discount the value of future earnings relative to current cash flow.

http://en.wikipedia.org/wiki/Net_present_value

[mseebach]

Yub, took that course :)

MBA or not, NPV (and the derived methods) are incredible useful tools in financial planning and decision-making for any business.

[replicatorblog]

I could by your comment that you got it, but it gets a little lost in the rest of the thread debating the philosophical aspects of selling out vs. plowing through.

[natrius]

"If you're doing what you like and you're earning a mil or two a year (or well on your way), why sell out all at once for $40 mil?"

Liquidity. Future success is not guaranteed.

I don't think anyone sells their business so they never have to use their brain again, which is the premise of "mojito island."