Why the Difference Between Startup and Microbusiness Might Matter to You

  • June 10, 2009 by Corbett Barr
  • 19 Comments

apples-and-oranges

Like many people, I long thought that being self-employed was the key to freedom. It turns out that working for yourself can mean a lot of different things. How you go about it can mean the difference between creating your freedom and building a virtual prison.

If you’re thinking about or in the process of starting a new business, here are some thoughts to help you create something that will be friendly to your lifestyle.

The Startup Question

There is a lot of attention paid to startups. Entrepreneurs are seen as some type of modern cowboy or swashbuckler. Their successes are lauded, but their lifestyles and failures are often overlooked.

What are your goals for starting a company? The dream of most startup founders is either to: a) create a situation where being boss means they get to make all the decisions and dictate where, when and how they are involved, or b) to become rich by selling the business so they can live happily ever after doing whatever they’re really passionate about.

For many types of startups, neither of those dreams usually come true for a couple of reasons. The “getting rich” scenario is a long-shot. Everybody knows this when they go into it, but people either think that they have a better shot than most, or that it’s worth the gamble. I actually agree that it’s probably worth the gamble, if only for the experience of it all. If you happen to get rich along the way, good for you. Just don’t bet on it.

The other scenario of creating a business that enables your dream lifestyle also isn’t very likely, unless you’re very careful. Most people start a company, seek financing or venture capital, and grow a team of employees to build the business. Along with the financing comes a board of directors.

You’ll also probably have a business partner or two to have gotten that far. When you add up all those people, the board, co-founders and employees, it turns out that you’re not really the boss anymore. It’s more like you’ve created dozens of bosses for yourself that you have to answer to if you want to keep the dream alive.

That’s the scenario I ended up in with my last company. Again, I wouldn’t trade the experience for anything, but for my next business, I’m planning to design things quite a bit differently. I want to create a vehicle for achieving my ideal lifestyle, not a small army of bosses for myself.

The Microbusiness Answer

Advances in technology, communications and social media have made it possible to start and run certain types of businesses in a radically different manner. Instead of hiring employees, a company can rely solely on contractors. Instead of renting physical office space, people can communicate over Skype, through instant messaging, through email or social networks.

Some people call these new leaner companies “microbusinesses” and the people who start them “solopreneurs.” The goal is to make the business smaller, more able to adapt to market conditions, easier to run and grow, and most of all, more supportive of the owner’s lifestyle goals.

A microbusiness is loosely defined as a company with five or fewer employees. I prefer a definition that focuses more on the intent of the business than the size. After all, most businesses had five or less employees at one point. The more interesting definition would be “businesses that are designed to run and grow with five or fewer employees.” The intent, not the size, is really what matters.

I’m going the microbusiness route for my next business, and I’m already seeing the benefits. As I start working through ideas and testing concepts, I’m not beholden to anyone else’s timeline or expectations. That may change slightly as I move forward, but I’m intent on keeping my next endeavor lifestyle-friendly.

What if Every Business Was Lifestyle-friendly?

Does a business need to remain micro-sized in order to be lifestyle-friendly? Not at all. There are plenty of examples of successful companies with more than five employees who have managed to remain lifestyle friendly.

Some of the biggest businesses in the world are considering or switching to a results-only work environment. In that scenario, employees are able to work anywhere, anytime, as long as they produce results. There’s hope for cubicle dwellers that working for a big company and living a great lifestyle don’t have to be mutually exclusive.

In the world of technology startups, 37 Signals is a shining example of a successful lifestyle-friendly business. They focus on simplicity, both in their software products and in their business model. In their free book “Getting Real,” they lay out a revolutionary model for building software with a small location-independent team. They’ve proven the model time and again through multiple successful product launches.

In business consulting, Point B is leading the way in work-life balance in an industry traditionally known for long hours, grueling travel and personal sacrifice. I know because I used to work for both Point B, and one of the “traditional” firms. Point B doesn’t maintain corporate offices, they give consultants autonomy over their own projects and they are extremely supportive of sabbaticals, time off and working hours that fit with your life.

What really matters is that a company is focused on succeeding while allowing for better lifestyles. If you’re in charge of a business, or planning to start one, ask yourself “how can I make this business more lifestyle-friendly for myself and everyone involved?”

In the spirit of helping one another achieve our lifestyle goals, please share your thoughts on startups and lifestyle-friendly businesses below.

photo by Here’s Kate

Written by . Corbett is cofounder of Fizzle, a place for creative entrepreneurs, writers, makers, coders and artists, all working to support themselves doing what they love independently on the Internet. Follow Corbett on on Twitter.


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Sean June 10, 2009 at 1:46 pm

I thought this was a great post. For a long time I have known that I wanted to own my own business. But I have never been interested in the typical types of businesses (restaurants, retail etc). I wanted something that would enable me the freedom to live the lifestyle I wanted. Recently I have been learning more about “microbusinesses” or being a “lifestyle entrepreneur”. This is definitely the direction I want to go. So the more resources there are out there the better! Thanks for the post!

Sean

Corbett Barr June 10, 2009 at 3:18 pm

Thanks, Sean. I wish I had researched more before I jumped into my last venture. There is so much to learn. Don’t get caught up in too much research, though. The best time to have started something was yesterday. The second best time is today!

Colin Wright June 10, 2009 at 4:37 pm

Well look at that: I’ve been a solopreneur all this time and had no idea :)

I’m with you in believing that the only job worth working is one that fits within the parameters of the lifestyle I’m building for myself. I’m also with you in having worked and created jobs that definitely didn’t fit that criteria. I guess some people have to fail a little before we know exactly what we DON’T want!

I am fascinated by larger companies that manage to make the location independent thing work, as well as those that offer non-traditional work hours and benefits (the clothing/gear company Patagonia is a great example of this…”Let My People Go Surfing,” a great book by the guy who started the company, outlines why he thinks non-traditional models are the way to go).

We’re pretty fortunate to live in a time where building a community around this kind of lifestyle is becoming easier and easier…I’ve gotten a wealth of good advice just from reading blogs like yours and talking to people who have gone down similar paths before me.

Corbett Barr June 11, 2009 at 10:07 am

There’s no better teacher than failure in my book. Thanks for the tip on the book by the Patagonia book. I’ll definitely check it out. I agree about the value of this community we’re in. It has been so helpful. I hope we can take it even further soon.

Rasheed Hooda June 10, 2009 at 6:36 pm

Hi Corbett,

I’ve been reading your blog for a while now, and I like where you’re going with this. I am a semi retired individual who found a line of work, that is not only fun for me, but it is the type of work I can do anywhere.

Currently I am in Houston with my family. My daughter just graduated high school and is going to Turkey for a year. My son is 16 and will graduate in a couple of years and head for college. I intend to become a nomad after that for sure, but I am currently playing with the idea of taking my work on the road and working where ever I find myself and head on to the next stop and do it again and again.

What I do is something I stumbled into by “accident”. I learned a skill I didn’t have and didn’t even know I had any interest in. but now I am able to work part time, 20 to 25 hours per week and make a full time income. This has given me the freedom to pursue other things and I am starting a few blogs to just express myself and learn from it in the areas that I am interested in.

I will be working all night tonight to set up http://www.EverestAt75.com a blog that will chronicle my journey to become the oldest person to climb Mt Everest on my 75th birthday. Another one that I intend to start next month, will be aboutbeing yourself and living life on your own terms.

you’ll be seeing me more often in the comments and eventually as a guest post author. :-)

Corbett Barr June 11, 2009 at 10:10 am

Hi Rasheed. Thanks for sharing your situation. We would love to hear more about how you make a living. Also, please let us know how your grand adventure goes!

Sara June 11, 2009 at 11:58 am

I guess I have a microbusiness then, except it isn’t one that I can quit my ‘real’ job over yet, and to get it to that size would take more time than I have while working 40 hours a week. So I’m struggling with the question of whether it’s worth having a ‘side business’ when you still have to work? I suppose that’s a whole ‘nother blog topic!

Corbett Barr June 11, 2009 at 8:58 pm

Is the microbusiness a potential vehicle for quitting your ‘real’ job? Could you scale back any hours at your real job? That’s how I originally became self employed, by gradually migrating from 50 to 40 to 20 and finally 0 hours per week at my ‘real’ job.

Rasheed June 13, 2009 at 6:49 am

Sara,

I can relate to what you mean. I’ve been there done that. Eventually, I found something I enjoy, something I didn’t even know I liked, and working part time I built it to where it replaced my full time income, so I said fired my boss.

Now, I am working on building other income, blogging and pursuing my dream adventures.

How did I do it?

I simply started with the question, “How can I replace my current income, working part time, so I can quit my job?”

you’ll be amazed with the storm of ideas and resources that will show up in your life. :)

Rasheed

Greg Rollett June 12, 2009 at 7:00 am

You make some good points and I love the research you laid in there. On the topic of startups vs. solopreneurs, there is certainly a different mindset. Those looking to build start-ups are looking to have an impact on a large number of people in order to be successful. Look at the tech bubble and the millions in VC money floating around. They are hard pressed to niche out and then go through an IPO.

However, a solopreneur can focus on working with a handful of super specific “projects” or “cleints” and make a nice living. This is something that I have found to be very attractive. Picking and choosing clients that understand your lifestyle, are given realistic expectations for the budget and desired outcome as well as getting word of mouth support are some great advantages of going this route. Plus it makes paperwork a hell of a lot easier than a million dollar payroll, office supplies and customer support.

Corbett Barr June 16, 2009 at 2:04 pm

The paperwork alone is reason enough to stay small ;)

Faraz Qureshi June 14, 2009 at 9:13 am

Great post Corbett. We are indeed fortunate that we now have the tools to build a great microbusiness. With Instant messaging, social media (twitter, linkedin, etc.), access to freelancers (elance, odesk, etc.). Couple that with the open source software and the cost of launching a lifestyle business has dropped dramatically. This would not have been possible 10 years ago..or even 5 years ago (or at least it would have been way more difficult).

Another example of this is the guy who started http://www.plentyoffish.com. He is a one man shop competing in the online dating space…with a free product, and has built a great lifestyle business for himself.

Corbett Barr June 16, 2009 at 2:07 pm

If building a microbusiness was possible 5 or 10 years ago, it certainly would have been a different type of business. I think the greatest gift of all the available technology and services is mobility. Thanks for the tip about plentyoffish!

Mark Dixon June 15, 2009 at 5:46 am

A magazine for entrepreneurs recently ran an article about the essential steps for launching a startup. Incredible. Have capital, and investors. Hire an attorney and a CPA. Incorporate. Get all the necessary licenses and permits. I kept waiting for them to say lease a thousand-square-foot factory full of machinery with those whirly fans on the roof.

Somebody needs to clue those guys in that the real pioneers are the ones starting micro- and even nano-startups with zero capital, no high-priced consultants, no bricks and mortar, and flying under literally everybody’s radar (except maybe the IRS).

Corbett Barr June 16, 2009 at 2:10 pm

Those entrepreneurship magazines are doing their readers a disservice by encouraging new business owners to burden themselves with so much. Maybe someone should start a new type of entrepreneur’s magazine?

Morgan Polotan July 2, 2009 at 7:18 am

Hi guys,

Great conversation going on here. I loved the distinction between normal startups to “get rich” and micro-businesses to support your ideal lifestyle. What Faraz says about technology dropping the cost of starting micro-businesses is absolutely true.

I am a nomad by trade – I split my time between NYC, Boston and SF as a student and entrepreneur. I am starting a restaurant concept called Kitchen of Eden, and here is my challenge: fuse the traditional startup process with the appropriate technology so that I, as founder, can run my companies and lead teams from anywhere in the world, on the cheap.

This is especially apropos because I plan on opening restaurants in every major metropolitan area in the country. So far my team and I have been good at boot-strapping, doing most of our work over the cloud for free – concrete5, Skype/Google Video chat, Google Apps, etc.

I would love to hear everyones input on how I can maintain that “sweet spot” between traditional start-ups and micro-businesses.

Thanks and I look forward to hearing from you!

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