The Great Hacker News Lifestyle Business Flamewars of 2011

There was a great flame war over at Hacker News about what entrepreneurs should aspire to when they start their business, a lifestyle business or a VC funded multi-billion dollar valuation company like Facebook, Zynga, Google, YouTube, etc. It all started with a angry rant by Justin Vincent about how VC “holds us back from our true potential.” He rambled on to say that the idea of being the next big thing is keeps us, entrepreneurs, occupied and keeps them, I guess VCs and tech pundits, in business. My favorite line of the article is the following…

If every developer was to focus on the very achievable goal of building a lifestyle/micro business – the entire house of cards would crumble.

Another choice quote is…

The absolute truth is that each and every one of us can build a business that can support us. We don’t need to build a million dollar business to survive. We just need a regular paycheck.

If I could paraphrase the rest of the article, Justin believes that not all startup founders will have a multi-million dollar exit in so instead of shooting for the moon we, as entrepreneurs, should shot for Milwaukee, that is a $10k/month small business. So, if you know you won’t come in first in the race, complain that the Olympic commission is corrupt, that the judges take brides, and instead go play Wii Sports because you there you will get a participation badge.

The tone in article reminded me of something that Jason Calacanis complained about millennials. In This Week in Startups #47, Calacanis said…

Participation means nothing, your fulfillment means nothing, nobody cares if you are fulfilled, nobody cares if you participated. You were lied to. There is no trophy in life for participation, except your tombstone.

Things got a little heated in the Hacker News comments for this article. Paul Graham, who goes by pg on HN, said that if every developer worked on their lifestyle/micro business “the whole world would crumble, because we wouldn’t have any technology bigger than could be built by lifetstyle businesses.” After this, things got a little more interesting when Alex Payne, username al3x on HN, said the following…

There’s a middle ground between web application “lifestyle businesses” (like duping credulous customers into overpaying for a time-tracking tool styled with this month’s CSS trends) and trying to start the next Facebook. … There’s nothing wrong with being a small software company. People have been doing it for decades now. It’s boring, but there’s nothing wrong with it. Don’t expect anyone to celebrate you for doing it, though.

At this point some “lifestyle” business operators took offense, most notably Amy Hoy, username ahoyhere, took offense in the above statement since she is mentioned in the original article and has a time tracking application that uses the latest JavaScript and CSS trends. After that Amy went on a dogmatic crusade against what she called the “dominant paradigm.”

In one side of the argument you have people that believe that as long as a business covers operating costs and brings in anywhere from $10k to $100k a month and you don’t have to do much to run the company you have the leisure of a lifestyle business. Such a lifestyle business affords you time to spend with family, participant on your children’s school activities, join a community organization, take time off to travel, in addition to being your own boss and making your own rules. I can’t knock someone for having a gig like this. People in this camp might subscribe to Tim Farris’ book the Four Hour Work Week and in the folks behind 37Signals who wrote Rework. I remember Jonathan Coulton describe on an episode of This Week in Tech (TWIT) about his music business. Jonathan has a strong following as a singer/songwriter in the self-described geek community. On that TWIT episode he said something to the affect that if you have 1000 followers willing to pay $30 for a premium experience or content then you can make a decent living (he probably doesn’t live in California).

An income of $10k/month pre-tax, pre-health insurance for a family of four and a home mortgage in California is not a “lifestyle” I would like to aspire to. Ramen profitable is only profitable if you in college. Some critiques of the Four Hour Movement rightly ask that if someone can bootstrap a business with only working four hours a week, how much more profitable will the business be if they spend more time into it? The truth is that there is a generational gap in the way of entrepreneurs think and a bubble of some magnitude in every aspect of the industry, including in the “lifestyle” businesses.

I can’t find the source but recently I read a tweet where someone said something to the effect, “You know there is a bubble because every tech conference is sold out.” The conference circuit is one popular business with “lifestyle” crowd, in particular the tech, startup, social media conferences. You know there is a conference bubble with the large number of regional and national conferences, seminars, webinars, master classes, ninja training dojo summits, product mastermind madrasas available online. For example, 37signals runs a one day workshop for 37 people at $1k, that is $37k for one day’s work, especially you can reuse the same material many times over for different batches of students. I’ve been involved for the past several years as an organizer for a non-profit which puts on a one day conference for students that nets $50k in profits.

There is nothing wrong with running a small business, especially if you can get paid by non-technical folks for a calendar with last year’s JavaScript and CSS trends or for a one day training on how to use Twitter and Facebook. I mean, if someone would pay me $1 for adding up any two single digit numbers to support my lifestyle I would outsource that shit to India and work from some mojito island somewhere. But there is something to be said about aspiring to build something great. I want the narrative of my work to speak for itself; I’ve worked in some great companies that have had lofty goals such as understand the human genome and possibly curing cancer. Those goals can’t be meet with someone working for four hours a week and $10k/month.

This country will move in the opposite direction in the socioeconomic standard that we have enjoyed if we listen to such advice, if we don’t strive to build the best businesses we can. These millennial web 2.0 designers might not even remember how there was a time before 1999 were their predecessors could have charged anywhere from $30k to $100k for a website design. Economic pressure has pushed the price of a web design down to $300-$1000 for a awesome design from some kid in Russia. Even now, these small time “lifestyle” operations are under threat by solutions from the developing world, where $3/month can afford developers there a very lavished “lifestyle.”

One of my favorite quotes from Robert Frost is the following.

By working faithfully eight hours a day, you may eventually get to be a boss and work twelve hours a day. – Robert Frost

I believe in hard work, not easy baked cookie cutter one trick unicorn project that some folks are calling a business. You got to put in the time, differentiate your product, and think big if you want to be a successful business. It is widely known that somewhere around 50% of small business fail after 5 years, don’t let the reason you fail be because you didn’t take opportunities when they presented themselves.

In the end, everybody is free to run their business as they want and the invisible hand of Google’s search algorithm will be the judge.


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