Millions not billions - the robust business

YOLO... so why gamble on a success that won't make you happy

A lot of new founders are inspired by the digital despots of Silicon Valley and decide they’re going to pledge their 20s towards a billion-dollar moonshot that will ‘change the world’. A loathsome goal that has never made anyone happy.

Businesses that are set up with flexibility in mind and financial goals that suit the founder’s needs are - sometimes disparagingly - referred to as lifestyle businesses.

I prefer the term robust business. Lifestyle suggests a stodgy and unambitious operation. On the other hand a robust business is one that is not VC-backed and instead:

• Set up to return a decent standard of living from day one and a sensible profit margin.

• Niche, as it’s easy to be strongly positioned in a niche without significant marketing spend and distribution costs.

• Necessarily not in a capital-intensive industry, since investors have to be involved and investors want ambitious returns. For this reason, ‘small tech’ is a good area to focus where it’s easy to get off the ground as an agency, app provider, recruiter etc

The pros:

• Creates meaningful jobs that are not subject to the destructive intensity of a high-growth environment, where all priorities are set toward investor returns

• Easier to manage and grow. Not ‘easy’ but you are at least in control of the pace of change and your own growth goals.

• No board to answer to, though that doesn’t mean “you don’t have a boss”.

• More chance of financial ‘success’. You’re way more likely to be a millionaire setting off down the 7 figure exit path, than the 9 figure exit path.

• Not going to be diluted/forced out of your own business.

• Easier to build around your lifestyle e.g. if you travel, have kids etc

The cons:

• You can’t hire early so you end up doing everything yourself for a long time.

• Normally investors speed things up, not just due to capital but also to their network.

• You’re likely investing your own money.

• You don’t start out with the money to hire top talent, especially in SF, NY etc, so you’ll find it harder to delegate at first.

• Difficult to scale up quickly if you find yourself in a high-growth market

I don’t mean to hate on the traditional VC-back/high-growth model at all, and in fact would love to go this route one day. But the ‘default’ aspiration of many tech founders is set toward this path to ‘disrupt’ entire industries when in reality a better use of time and energy might be a robust business that can be built around your real goals.