What is the point of building a business? | Hacker News Reader

What is the point of building a business?

dyske.com

46 pointsmattm26 comments

Part of it is being my own boss, working on stuff I choose. But honestly a big part of it is the potential for profits to scale independently of, or at least at a very high ratio to, my effort/time.

Working for someone else you'll never make more than $X/year, where X is some general high point for your position/field/location/etc... That could be $50k, $100k, or $300k, but it's unlikely to be much higher (unless your position is CEO, investment banker, or thief (wait is that two or three positions?)).

By building a business, my hope is that the business will expand, I'll hire people, I'll have long term contracts, recurring revenue, and other mechanisms in place that will allow me to work 40 hours a week and make $200k one year, $500k the next, and so on. When you work for someone else in general your income will be fixed to some hours*$Y formula. Building your own business can free you from that limitation.

I could not agree more as starting your own venture is the ultimate liberation. After spending many years working for someone else I have finally decided to take the plunge and implement one of my ideas. I must say the dreariness of the day-to-day working a job under management that sucks the fun out of life has motivated me to make this decision.

modoc's earnings analysis should not be taken lightly. It is what separates the working poor from the comfortably wealthy.

To have "a creative outlet that supports me financially" -pretty much sums it up for me.

If I just wanted money, I'd just focus my energies on my current job/career.

I always wanted a job where I could get paid for thinking big thoughts and sometimes writing about them. Then I found out that the jobs that fit that description, such as "university professor", are typically scarce, highly sought after, and guarded by layers upon layers of BS to protect the interests of people who already have them. ("First, we're going to have you go through seven years of indentured servitude for a shot at getting one of these jobs. Then, we're going to subject you to a toxic hothouse of petty politics about trivial things.")

So I started a business to write my own job description: think big thoughts, sometimes write about them, avoid BS to maximum extent possible. It turns out this actually works.

The indentured servitude can be cut pretty short if you go out and out to apply yourself. If you get into a decent program, your Ph.D. will be fully funded: a full ride plus a stipend for living costs. Unlike professional education and masters degrees, Ph.D. programs realize that you'll never make enough money as an academic to pay them back, so they actually pay for you in the interests of reproducing academia.

You can get through your coursework in a year-and-a-half if you take courses over the summer. Take your comps over the next sixth months, so that by the beginning of your third year you're ABD ('all but done' or 'all but dissertation'). You can write a dissertation in two years, one if you have an amazing work ethic and an original idea going in.

It's not actually that terrible a proposition. Four years, getting paid (although admittedly not a lot) to sit around reading lots of books that you're interested in, write a couple seminar papers, and TA two or three classes.

The petty politics, however, you will never have a chance of escaping. If you want a job getting paid to sit around thinking interesting things, try a think tank. I worked for two years as a research assistant at a major bipartisan foreign policy think tank in Washington DC. Had a great experience.

I'm pretty thankful that you share your experiences and conclusions on your blog posts.

Really thoughtful article about balancing money with other things, purposelessness and self-discovery as a path to creativity, and creativity as a business strategy. All the things he talks about that relate to my experiences are dead on. I've had similar thoughts about keeping any business I start private, and bootstrapping instead of seeking VC funding. Who wants to optimize for current needs, or short term profits? I would much rather give people something they can't even describe until they see it for the first time. If it weren't for mathematicians who were mostly motivated by aesthetics, we wouldn't even have computers.

It's interesting that he describes having a kid as a way of avoiding or delaying self-exploration. I've found that self-exploration has been one of the hardest things I've done, but by far the most helpful, although I think that outside of solving personal problems the line between self-exploration and other sorts of exploration starts to blur. It's really about the exploration of appealing ideas for reasons that one probably can't explain to anyone else.

Yeah, this article concretized a lot of the types of thoughts I've been having recently about how best to live my life. I'm preparing to found my own startup in the next 2-3 years and determining my goals from the outset is incredibly important.

All too often people are ideological about this subject. On the creative side people say "don't sell out" and on the business side people condescendingly say "oh, a lifestyle business." I guess I can respect the creative ideology a little more because it doesn't stem directly from greed, but I find both positions ridiculous. I want to make enough money that I can own a nice modest house without a mortgage, and that I can take my family on vacation anywhere in the world 2 or 3 times a year, but I don't want to sacrifice my relationships and the joy my work just to scale my business from $1m to $100m.

I agree that both positions are ridiculous. I also want to add that all businesses are "lifestyle businesses." But it's how you define your lifestyle that makes the difference. I'd rather run a small shop that allows me to pay myself to build things, hack software, play with new technologies, and sleep in. OTOH, someone else might want to fly all around the country, sit in meeting after meeting, get on the cover of Forbes, and have fancy dinners every night.

To each his own, but I'd much rather run a business that enables the former than necessitates the latter.

But that raises a question, is it possible to take a business to scale without sacrificing the things you loved to do yourself? Derek Sivers is one example--he structured CDBaby so he could keep writing code most of the time and sold it when the business wasn't fun for him anymore. Any other examples?

The author of the article seems to think that the only reason people take a company public is for the money. Nope. A company can be forced to go public (at least in the United States) if they meet certain criteria as set forth by the SEC (I think that's the proper department). I do know that Microsoft put off going public as long as possible, as well as Google.

I have never heard of this, but I'm fascinated. Can you provide more information?

"But Gates was in no hurry for Microsoft to take this same rite of passage [going public]. He did not want to open Microsoft's corporate doors to the public. For one thing, the company did not need the instant infusion of cash that a public offering would provide. It was making a great deal of money. Pretax profits were running as high as thirty-four percent of revenues. And remaining private had definite advantages. There were no sockholders to please, no onerous filings with the Securities and Exchange Commission. The only disadvantage was that Microsoft's key employees and managers who had been getting stock options over the years had no tradable security....

"Reguardless of what Gates' wanted, however, his hand was about to be forced. It was only a question of time until the day arrived when Microsoft would have to offer its stock to the public. The 1934 Securities Exchange Act required all companies to register and file public reports as soon as stock had been distributed to 500 or more employees. As far back as 1983, Gates had projected that Microsoft would reach that figure by 1986 or 1987...."

_Hard Drive: Bill Gates and the Making of the Microsoft Empire_ by James Wallace & Jim Erickson, page 320.

For Google, just search for articles around the time they went public.

Microsoft had to go public as soon as they had 500 employees in their stock option plan.

This is not true.

What isn't true? That Microsoft had to go public because of the law? That Google had to go public because of the law?

Sigh. Having to publicly share information with the SEC is different from "going public", which implies an IPO/listing on a major stock exchange.

There's no upside to jumping through the SEC's hoops if you're not public. It is literally paperwork just for the sake of it.

Um, no, it's paperwork for the sake of SEC compliance

SEC compliance has value for a public company; it reassures investors. It has no value for a private company.

One of the best posts I've read in quite some time on HN - articulates what it means to be an entrepreneur almost perfectly.

The first answer that came to my mind is: money and fulfillment.

PS: How do I link words in HN? I meant to link 'fulfillment' to http://harmanjit.blogspot.com/2009/04/on-fulfillment.html

You can't link words. But any URLs will automatically be linked to themselves.

money, power, doing it my way, fun, fulfillment... and eventually, more money :-)

Because it's fun.

Ikea.

Let me elaborate, Ikea is a PRIVATELY owned $30-40 billion company.

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