Lifestyles and business

I didn’t go into entrepreneurship to have a better lifestyle, I went into entrepreneurship because I had an idea for a business that I felt passionate about and thought could be something significant. I went into business to create jobs (I hope, right now I’d love it if I could live off what we’re doing let alone others). I went into business because I enjoy seeing things get built. That being said I don’t think we give enough credit to people who have gone into business and created a decent lifestyle for themselves.

I had a conversation with a friend a couple of months ago about how the term “Lifestyle business” get’s such a bad knock in business schools and in the investor/tech entrepreneur communities. The truth is lifestyle businesses should be admired not dissed. If someone can create enough wealth for him or herself and in the process create a few jobs, in this economy especially, we should celebrate their success rather than dismiss them for creating a lifestyle business.

I didn’t question it that much when I was in business school. I took entrepreneurship classes that focused on building big businesses, looking at scalability, looking at exits, and investment classes that looked at bottom lines and quickly showed which investments would have a trajectory that would land them into public markets or in a valuable trade sale, I can’t remember once ever looking at the amount of jobs created or the amount of wealth for an individual in a simple but effective business. Although my guess is that a significant portion of successful businesses are in fact lifestyle businesses.

I used to work for a lifestyle business and one of the reasons I left was that the business wasn’t scaling and wasn’t trying to be a really big business. In hindsight, so what? The company had created jobs for over 20 people and the founder was making a significant income for himself. There’s nothing wrong with that at all. In fact in this economy we need more people creating companies like this.

As the economy contracts, as getting listed on public markets is getting more difficult, maybe it’s the right time for business schools, investors, people and banks (I’m leaving the investment for smaller businesses rant for another day) to take another more favourable look at “lifestyle” businesses.

  • Somebody

    Hoskins eh? Pffft

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    Yes Hoskins. The guy gave me and a lot of other people breaks and opportunities despite whatever you might think of him.

  • http://about.me/johnmccarthy johnmccarthy

    Thanks for writing this. I am always saddened when I hear people use “lifestyle business” as a put down. Job creation, value and wealth creation….When did those become bad things and “Swing for the Fences” and an all or nothing casino mentality take over?

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    Thanks for the comment John.

    I think the wave of IPOs and trade sales in the 90s are partially to blame, it made everyone in the investment / entrepreneurship and sadly business education industry focus on “BIG” companies and lose focus on building a successful economy with many entrepreneurs of different sizes and shapes.

    Don't think there's anything wrong with swinging for the fences but would love to see more support for people who are creating jobs, value and wealth even if they're not likely to become a $250M+ company.

  • http://about.me/johnmccarthy johnmccarthy

    Agreed there is nothing wrong with swinging for the fences….I work for VCs and entrepreneurs and I certainly understand, admire and adopt, the goals and motivations.

    But when everyone in a society is swinging for the fences, who is going to be making the bats and balls? Hopefully I didn't take that too far.

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    Ha, you might have taken that just a bit too far. How about a team that hit's a lot of cycles will beat a team that only hits home runs with no one on base. I love sports analogies for business :)

  • http://about.me/johnmccarthy johnmccarthy

    Thanks to Billy Beane, On Base Percentage got slightly elevated in status over the more glossy stats like average and home runs. Walks and Singles are definitely the Lifestyle Businesses of baseball. My daughter realized this year that she would never be a power hitter in softball and converted over from the right side to being a left-handed slap-hitter. The result was .615 on-base percentage (not that I calculated it or anything) over the summer, and she made the travel team she wanted to make for next summer. A good life lesson. Now what will I tell her when she comes to me in a few years and says she wants to become a VC and swing for the fences?

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    And the award for best comment on this blog ever goes to… Thanks John, love this story.

  • Natasja

    Hear hear. I think the poo-pooing (sp?) of so called lifestyle businesses esp by MBA's is so short sighted (disclaimer: I'm an MBA). There's a time and place for everything. Some things scale, some ideas don't. No right or wrong in that. I think part of it is that MBA's think they're the master of the universe, and of course as the master of the universe something that fits your stature (i.e. billion, heck, make that a trillion) dollar business is the only way to go.

    Maybe a good analogy is sports: millions of people play sports, enjoy themselves, but don't do it professionally and have no aspirations to ever be an Olympic athlete. Only a few people become pro's.

  • http://vinaybeta.com Vinay

    I couldn't for the life of me remember what post I agreed to write! :-)
    I'm sure I couldn't have written it any better. Thanks.

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    Doh! Sorry Vinay! Totally forgot who I was discussing this with. Truth is it was re-inspired by someone talking about mumpreneurs and lifestyles on twitter today!

  • http://www.fiftybyfifty.com/lifeoffarhan/ Farhan Lalji

    Not only Olympics or recreation but even within elite sporting events you have big power performers and skilled executors. It's like the sprinters and the hurdlers – you have great sprinters who get big payoffs and everyone knows them, but you can be a gold medal hurdler who's still a great athlete.