Last night I was at the Sunshine Coast premier of the documentary The Startup Kids.
It’s an hour long movie created by two woman from iceland, Vala Halldorsdottir and Sesselja Vilhjalmsdottir, who came to America to interview people about life as a young entrepreneur working on a tech startup.
Several high profile company founders feature in the film, including one of the co-founders of Dropbox, Vimeo/College Humour, Kiip, Soundcloud, and also venture capitalists from well known firms like Accel Partners. You can find a full list of people interviewed here.
I found the documentary entertaining and inspiring. I’ve always loved the entrepreneur mindset, foregoing a traditional career path to take a big risk and start something just based on an idea.
The movie certainly glorifies the dream of the silicon valley startup, but it’s realistic too. The amount of hours put in by the entrepreneurs and the lack of any outside life beyond work was talked about again and again.
For me, the really exciting part was the notion of living in a place filled with people who are all lovers of technology and using it to create something that can change the world, or at least make people’s lives better.
As much as I love Australia, and the city I live in Brisbane, there just aren’t that many people who think, or more importantly, act on those ambitions. I can only imagine how motivating it is being surrounded by so many inspiring people.
My business partner, Walter, has been working his butt off on our startup CrankyAds.com. He’s just completed two new important features, which I will write about in a future blog post soon.
Walter is our code monkey, he puts in the lion-share of hours coding new capabilities for our ad management tool. He loves to code, I can tell because he sometimes spends his friday nights doing it, and wow – it certainly takes a lot of hours to make software.
Watching the documentary I saw a lot of Walters talking about their 14 hour days, living in small apartments, housing multiple people who would sit at computers all day and only venture out to purchase necessary supplies like food.
This is the startup lifestyle, and while the excitement that raising funds and million dollar sell outs can generate, the harsh reality is that most of the time you forgo the rest of your life for a chance to taste these momentary highs.
And it really is only a chance.
Unfortunately, as was pointed out by one of the partners at Accel in the documentary, of every ten companies they invest in, six will fail (they lose their money), two might break even or return double their investment, and maybe one will be a really big winner.
That’s okay for an investment firm that can spread the risk and make smart investments, but for those six failures, the entrepreneurs behind them put in a lot of hours that, while great for experience, don’t return any financial wins.
There is also the opportunity cost of using your peak years, your twenties, to sit at a computer instead of enjoying life.
That being said, for most of the entrepreneurs interviewed, their enjoyment centered around their startups, so perhaps given the fanatical personalities, the only way to actually enjoy life is to work on a company. I was the same when I was 20. I didn’t have much of a life outside of my websites.
There is one benefit of failure though, it’s looked upon as a positive thing by investors.
Although you may not have succeeded with a big money win, because you took action and made something, that shows you have the chutzpah to follow through. Those who do succeed almost always have failures in their past.
Now that I have spent some time in the startup world, I can see the stark difference between a tech startup and a lifestyle business.
A lifestyle business is all about creating a stable cash flow source so you can do other things. It’s about life balance and using a business as a vehicle for what you really want to do with your life.
A startup is a much more all-encompassing monster. You don’t get spare time to enjoy other things because if you do you are not working hard enough.
Having a blog that brings enough cash to live off, or selling a few information products, or even working as a freelancer a few days a week to fund your adventures, is a lot less stressful and requires a lot less of your time.
A lifestyle business requires a very different mindset. It doesn’t have quite as big a potential upside as a tech startup, but in terms of quality of life, it’s definitely a lot healthier.
I don’t see one as better than the other, however. It’s a matter of goals – what you want from your business and the time you spend working.
If you want to influence a lot of people and you are motivated by the prospect of building something big, a startup is the way to go. If you want to quit your job and have a business that pays the bills and allows you to travel or spend time with your kids or work on your hobbies, a small lifestyle business is the option for you.
Thankfully the internet is available as a vehicle for everyone. It’s all a matter of your vision and how you want to spend your time.
If you’re not sure, try them both, there’s nothing like experience to tell you what kind of person you really are.