Learn why you should set a goal to run a lifestyle business – what it is, and how you can transform your business into one.
I don’t want a billion-dollar company—or even a $100 million exit.
That’s an actual snippet from a conversation I had recently with a friend. We were talking about our goals for 2017.
I was making an argument for running a lifestyle business versus running something…I dunno…bigger.
What is a Lifestyle Business?
I define a lifestyle business as one that enables you to lead a fun, enjoyable lifestyle. Think of Maslow’s hierarchy of values; a lifestyle business satisfies a lot of your base needs:
- It provides sufficient income. If you can’t afford food, shelter, entertainment, etc. then it’s harder to be happy. I’m sure “happy and broke” exists out there, but at age 45 with a wife and two kids, I don’t feel like exploring that state of being.
- It gives you time to enjoy life. Yes, some people get 100% of their enjoyment from their work. I am not one of those people. I find joy in noble pursuits like family, travel, and watching NFL Sunday Ticket.
- It’s low-stress. Ever gone on a vacation with an investment banker? I have. It’s not exactly relaxing when the dude has to check his cell phone every five minutes and take quaaludes to chill out. What good is having lots of money and time if you’re too stressed to enjoy them?
My 2017 goal is to create a business that meets all these criteria. (I’ll get into the nuts and bolts of what and how later.)
You know what? It should be your goal too.
My First Lifestyle Business
In 2003 I started my first business, DesignPublic.com. I didn’t have “create a lifestyle business” as a goal.
I didn’t have a stated goal at all.
Without a stated goal, I could justify anything. Without a goal, I fixated on whatever was right in front of me.
At DesignPublic.com, what was in front of me was growth.
In the shower getting ready for work? Let’s think up some new content that might grow traffic.
Lying awake in bed at night? Let’s come up with some new Adwords strategies to grow revenue.
We did grow. In Years 1 and 2, we went from $0 to $1.5m in revenue. Hey, that was growth, right? So was I happy?
Nope. I remember the conversation that took place when Sina, my business partner, did our Year 1 taxes…
Me: “How much can we take out of the business? Can I get the cigarette boat?”
Sina: “Nothing. We didn’t really make anything.”
Me: “Ha, funny—‘nothing’—I know, we deal in digital bits and bytes.”
Sina: “No, I mean we didn’t make any money.”
Damn. We spent two years ramping this company up and didn’t have a dime to show for it!
Strike one!
And you know what? Spending all that time thinking about my business meant I lacked a meaningful relationship.
Strike two!
No money, no time, no girlfriend? Hello, stress.
Strike three!
I was starting to understand the importance of setting better goals.
Sina felt the same way, so at the beginning of Year 3, we rethought our goals.
We asked some key questions What are the odds that Design Public ever IPOs? Probably low.
Would we ever sell it? Well, how do you even sell e-commerce companies…and who would buy it? Most important: What kind of life do we want to live?
We came to the conclusion that we wanted a lifestyle business. This is how we planned to get there in Year 3:
- We set some personal income goals: $200K each would be nice.
- We decided we wanted to work less: 30 to 40 hours per week.
- We committed to being OK with this. Not getting “more” wouldn’t stress us out.
Our new goal changed our approach to the business in Years 3 to 5.
- We automated things that took all our time, like processing orders.
- We hired people to take things off our plate—like customer service, catalog management, etc.
- We refocused our marketing and merchandising on profitability and growth (not just growth).
And it all worked.
Today, I look back at the three years that followed this decision as the “fun years.”
With time to devote to my health and wellbeing, I worked out and meditated every morning.
With less stress, I ate better. Emotionally and spiritually, I was able to take every Wednesday off, during which I’d read and think.
I traveled, running the business from Paris, LA and NYC. Socially, I explored SF with my friends and got a new girlfriend with whom I was more present.
And at the end of the year, I took a healthy dividend check out of the business.
I was much happier. And richer.
Now, Your Turn
If you are reading this, you probably run your own e-commerce or SAAS business.
You too might be focusing on “growth.” And this focus might be impairing your health, relationships, and happiness.
[bctt tweet=”Make it easy for yourself this year: set a goal to transform your business into a lifestyle business.”]
“But Drew, I’m not like you—I want more than you had at DesignPublic. You were kind of an idiot to spend so much time and energy on a simple drop-ship retailer. Today is the Golden Age of Direct-to-Consumer. You know Warby and Bonobos? I am trying to become the Warby of toilet paper/pencil erasers/underpants, and that’s going to be HUGE.”
I hear it all the time. “Our goal is to become the Warby of X or the Bonobos of Y.”
I call this the “WarbyOf” goal. Let’s hashtag it: #WarbyOf.
Here are the problems with #WarbyOf as a goal:
- First, Warby is VC backed, and most of you aren’t. So how relevant is their growth rate/PR/fame to you? Not very. You don’t have boatloads of capital to plow into unprofitable customer acquisition. Heck, Uber lost $3 billion last year. BILLION. You want to be the #WarbyOf? Great—go raise money and spend $100 to acquire each customer with an LTV of $50. And then skip down to #3 to see how that strategy ends.
- Second, #WarbyOf founders work their asses off. Know Andy Dunn, CEO of Bonobos? I do—he’s a great guy. Really smart. And he works his ass off. He has many stakeholders to manage: investors, his board, press, hundreds of employees, and his customers. Think he travels a lot? Think he gets a solid eight hours of sleep a night? Does Andy love these work demands? I dunno—you’d have to ask him. Would I love it? Hell no. Being Andy or “The Warby Guys” (as they are called around NYC) or Sophia Amoruso (Nasty Gal) does appeal to my ego…but it’s not actually what I really honestly want on a personal level. Maybe when I was single and in my 30s, but not today.
- Third, what’s the #WarbyOf exit strategy? It’s OK to work hard if we have a big-ass light at the end of the tunnel, right? Well, the final chapter on most #WarbyOf companies has not been written, folks. If it’s to IPO, good luck, there’s only been a handful of e-commerce IPOs in the past five years. And I’m not seeing any direct-to-consumer brands among them. Be acquired? Let’s see, in the last two years we had a Gilt firesale, a One Kings Lane firesale, and a Fab firesale. Only Dollar Shave fetched a life-changing amount for the founders. So I’d say the odds of a great exit are low too.
Before you charge off in the #WarbyOf direction, do yourself a favor: take this week to think about your 2017 goals.
I wish I had done this in my first year at Design Public, before I charged off to “just grow.”
What do you want? To change the world?
An X% chance of becoming a hundred-millionaire? Or much-greater-than X% chance of kick-ass freedom, enough income to not have to worry about income, and a great work-life balance?
Final Thoughts
Most of you reading this don’t run VC-backed businesses.
I encourage you to be more foresighted with your goals for 2017. Transform your operation into a lifestyle business in 2017. Be happier and healthier.
Here at Nerd Marketing, my goal is to help you get there.
I aim to share with you not just growth strategies, but profitable growth strategies.
Ones that will help you create that lifestyle business. And the beauty is that most can be automated.
[bctt tweet=”Automation will free you up to spend more time on yourself, on your family, or just watching on NFL Sunday Ticket like me.”]
In the coming year, I’m going to dive deep into this lifestyle business idea. Smart, automated profits are what we’re after. I’m excited to help you get there faster.
PS. Happy 2017 from Times Square! (via Instagram)