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Comment by chiefalchemist | Hacker News Reader

And *this* is The Key difference between an entrepreneur and a mom & pop.

That said, even a mom & pop should be mindful of exit. What happens when the owner(s) wants to retire? Or has a serious health issue? Or has a family member with a health issue? Etc.?

You don't have to be a unicorn to build something that someone else wants to acquire.

Editorial: And this is why I dislike words like solopreneur, mompreneur, and so on. Sure you can have a one person business with a steady revenue stream. But that's not a 'preneur. If you are the business and the business is you, you're ability to exit is highly limited. That's not a 'preneur. If you get hit by a bus and your customers are screwed and the business tanks. That's not a 'preneur. You're much closer to a m&p TBH.

I realize that's counter to conventional wisdom on social media, but such snake oil ideas deserve to be called out already.

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> But that's not a 'preneur. If you are the business and the business is you, you're ability to exit is highly limited. That's not a 'preneur. If you get hit by a bus and your customers are screwed and the business tanks. That's not a 'preneur.

Sorry, but it absolutely is. Entrepreneurship is just starting a business and taking on the majority of the risks and rewards. There is nothing in the definition that says you have to sell the business or exit in any way.

I'd argue that taking on VC money is actually less entrepreneurial than going it alone - you're offloading a big chunk of the risk to your investors.

Mom-and-pop businesses fit the definition of entrepreneur just fine. I'm not willing to let Silicon Valley VCs redefine the term.

> What happens when the owner(s) wants to retire?

Maybe they just close down the shop.

> Or has a serious health issue?

And purchase disability insurance.

The point is, regardless of circumstances, if no one wants to acquire the business then the business by definition has not created value (in the eyes of the market).

Being a mom & pop is not the same as being an entrepreneur. They are two separate mindsets. One use exit as a North Star the other just retires and closes up shop.

I'm pretty sure Sam Walton didn't establish Walmart with the hope of being acquired.

It's bizarre that we live in a time where we can't even fathom a business that is fundamentally very profitable, we just envision growing the company until it's attractive enough for someone else to take on the unsustainable cost of running the business: either get acquired by a large company or hoist your debt onto the public market.

Investment really did used to be about more than a complex "greater fool" game.

Your definition is the social media-fueled snake oil meme.

One very simply question: What defines value better than an exit? Or the offer to exit? (Hint: Nothing.)

You might not like the definition, but that doesn't mean it's wrong.

Exit valuation doesn't come from God. It comes from metrics like growth, profit, etc., all of which are readily available without actually exiting.

Even if we accept your assertion that it's the best way to value something, that doesn't mean it's the only way to value something.

Nah. Not at all. Those are all proxies.

It comes from The Market. It comes from some other entity saying, "This is worth X to us, and we're willing to pay that. Here's an offer."

THAT is value. I've already said this, but I'll say it again:

Revenue !== value.

Revenue actually is value (a subset of it) delivered to the business's customers. Enterprise value is a different thing. It's an important thing, but it's totally possible to have a business that delivers immense value to its customers and has very low enterprise value. We generally call these "not great businesses," but that doesn't make them not businesses.

Not really. You can for example generate $1,000,000 in revenue and not generate value. Perhaps you're not profitable, and therefore perhaps not attractive to being bought. That is, no value.

Value is what someone is willing to pay (for the company). It is set by the market. Revenue may or may not be used by the suitor to determine value, that is, how much they're willing to pay to acquire the generated value.

Revenue !== Value

To clarify, they are all business in the legal sense. But a "solopreneur" who gets hits by a bus, leaves customers high and dry, and can't exit (i.e., have someone else carry on) is not to compared to an entrepreneur who generates value such that an exit is possible, and customers are less likely to get screwed.

You are specifically referring to a concept called “enterprise value.”

Notice the modifier. That indicates it is not the only (and to many people, not even the most important) type of value.

So that value just magically appears at the moment of offer to exit?

Yup. Something is only worth what someone else (i.e., The Market) is willing to pay for it. You can stack up a ton of customers and revenue but if no one else wants it...sorry...no value.

At the extreme, imagine all these social media "creators". In some cases, tons of revenue. But their revenue-producing-hobby is such that no one could take the torch and carry on. If that person is abducted by aliens, the company also disappears. No one else can buy it and carry on. That is, no value created.

I'll keep repeating this:

Revenue !== value

Entrepreneurs create value. Not revenue. Value.

The problem with this thread seems to be that people are confusing revenue with value. If it was about revenue, then the definition would say that. It specifically says value.

> Revenue actually is value (a subset of it) delivered to the business's customers. Enterprise value is a different thing. It's an important thing, but it's totally possible to have a business that delivers immense value to its customers and has very low enterprise value. We generally call these "not great businesses," but that doesn't make them not businesses.

Not really, revenue is not value. It's used as a proxy but it's not a true indicator of value. An extreme example, LOADS of revenue but also loads of expenses (i.e., not profitable). Is that "creating value"? I think not.

Or again, the "influencer" model. TONS of revenue but when was the last time you heard of such a person selling? They're not because there's no value. The influences walks away, the house of cards collapses. No one is going to pay for that. So, sorry, no value - regardless of revenue.

Therefore, if you ever want to know the value of your business as a reflection of the alleged value it creates, put it up for sale (or sell shares). You will quickly find out if you're actually creating value or not, or at least someone thinks you have the potential to create value. But that isn't revenue.

That's it. You want to measure value? Then be prepared to ask the market (i.e., exit) Anything else is a proxy, a deception, or something you tell yourself to make yourself feel good.

someone starting a mom & pop business is an entrepreneur. There's nothing about scale in the definition of the word.

I didn't say there was. I said it was about value, as in creating something someone else wishes to acquire.

There's nothing wrong with the mom & pop mindset. But it's not the same mindset as being an entrepreneur and focusing on value; with exit being a clear and ideal way to see the value.

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