I feel like this is exactly what most companies should strive for. They'll make better decisions that way.
What I dislike is A) the view from startup land that there are only two types of new businesses, "startups" and everything else ("lifestyle") B) and the "everything else" category is somehow inferior or even some sort of hobby or vanity project. Sahil used the term to describe his own company, and at one point felt shame about it, even though he had a real business with real customers and real revenue.
That's how twisted the mindset in startup land has become, where real business owners are supposed to feel shame, and "success" is based on as-yet unfulfilled promises and raising a round?
I think it's funny, though, that non-tech industry leaders critiqued Bezos in the past for running a 'lifestyle business' when in fact Amazon was always a technology company and has become dominant and successful to boot.
I think some of the disdain comes from legit growth startups trying to distance themselves from one-man "startups" that could be better categorized as micro-ISVs or side projects.
But there's definitely no shame to running a successful lifestyle business. The 37signals guys have been great at shifting that perspective.
Perhaps in the US, and probably in just a small part of the US. Everywhere else, a startup is just a new business.
While I realize people don’t always like to use constraining labels, limiting the word “startup” to businesses that are aggressively seeking a rocket-ship trajectory actually strikes me as a useful convention.
I respect and admire pg as much as probably anybody on this board, but I still reject the idea that he has any particular standing to declare his subjective definition of "startup" to be "the" definition by fiat.
I would argue that "startup" actually refers to "businesses that are designed to grow big", where the speed at which you do so is mostly irrelevant. If one wants to raise VC money and tie themselves to that particular time-boxed constraint, that's great. But you can just as well do it "slow and steady" by focusing on early profitability and continually and incrementally reinvesting profits back into the company for growth.
Neither is "better" or "worse" than the other, except in context, just as with the quarter-horse/camel example.
Are they, though?
I have looked at the incoming classes of various startup accelerators over the years and see lots of niche-focused products and services that can never grow to anything more than a niche-focused product or service as described in their pitch decks.
I'm not putting down those types of businesses (or proto-businesses). I'm just pointing out that they don't have a high-growth profile or potential, the primary dividing line between "startups" and everything else dubbed "lifestyle" in investor circles.
On HN, a "startup" is a moonshot backed by venture capital, and is seen as a failure if it doesn't achieve a massive valuation and take over the world. You read about businesses with "mere" million-dollar-plus revenues being shut down because they're "unsuccessful". It's insane.
If he bootstrapped and reached 780k/mo after 8 years of work that would be a successful lifestyle business and he should be absolutely proud.
I'm absolutely not trying to be judgmental as I've succeeded and failed at businesses myself.
I find it difficult to call $10M/year a “lifestyle business.”
To me, lifestyle business means a business that can support the owner in their lifestyle. So unless the owner spends millions of dollars every year...
$65k is the gross profit, which appears to be before operating expenses are accounted for. He doesn't list the net profit in the tweet (as he does elsewhere in the post). In the other mention, net profit was just under 1/4 of gross profit. So he's probably netting somewhere around $15-25k/mo, depending on how much of his costs are fixed/variable. Still good, but considering how many millions went into the business, not great.
> We kicked butt, had fun, didn't cheat, loved our customers and changed computing forever
... and in many ways, it seems like only a "lifestyle business" can really prioritize those over core revenue and growth metrics.
Bryan Cantrill's discussion is also great: https://www.youtube.com/watch?v=-zRN7XLCRhc&t=2000
There are a lot of companies like this (big & small), though sometimes its not recognisable from the outside. Note the goal is still ostensibly to make money. You don't run a business when you could have retired if you don't love growing businesses. I cant imagine a founder turning down an offer to expand rapidly, if it made sense. They just tend to avoiding going all in on a particular bet and for obvious reasons don't like ceeding control to outside investors.
I don't think I've heard the phrase lifestyle business used that way. I'm not in the US let alone silicon valley so that might be relevant.
Rather I've heard lifestyle business used to describe a business, typically with zero to half a dozen employees, which the founder can run without putting in a whole bunch of time.
A real but deliberately vague example. A company that acts as an authorized dealer for a manufacturer. The sales company handles the sales process and takes orders through a website supplemented with phone calls. Actually shipping the merchandise and handling after sales customer support is done by the manufacturer. Why they don't want to do their own sales I don't know. Staffing requirements are one person to answer any phone calls and someone to do the books. Owner's required time is maybe a few hours a day.
Commissions on sales cover all the bills etc and let the owner pay themselves handsomely but it will never be a giant enterprise.
https://www.youtube.com/watch?v=J8UwcyYT3z0
Really made me rethink my priorities and has had me change the kinds of things I do.
I guess it sounds too bourgeois for the young (and not so) SV rebels who are in to change the world and make some billions along the way.