daily articles for founders

Alex Payne on the Lifestyle vs Startup debate  

Alex Payne pitches into the Entreporn debate:

A "micro business" whose primary mission is providing for the solo founder (or a very small group of founders), is not, I believe, an adequate structure for doing business in a world that desperately needs the help of entrepreneurs. In blunt terms of value creation and extraction, it is a break-even proposition at best.

Building a business around maximizing your individual happiness is not particularly useful or admirable. That is my position, and I'm well aware that it may be unpopular with some.

The fallacy in this argument, however, is three-fold:

First of all, people who are struggling to make ends meet, feed their family and send their kids to school, rarely do a lot of good for the rest of the world on a larger scale. Playing the startup lottery is less likely, on the whole, to produce a successful person who can go on to do more good. Therefore, advising people to do things that are less likely to succeed probably reduces the amount of good being done.

Secondly, people who build successful lifestyle businesses don't always stop there (and those who do would probably not have succeeded at building a bigger business). They will often go on to do other things with their life - which may, incidentally, include building further, more ambitious businesses.

Thirdly, while disruptive entrepreneurship is certainly the source of much good and much progress in the world, it is hardly the only way that such progress happens - and not necessarily the most efficient. Despite the veneer of improvement of the so-called "New Capitalism", large businesses are far from having shown in any convincing way that they are any good at considering the externalities of their business models. Almost every large business causes "collateral damage" as part of its business model - to a much larger extent than smaller businesses. So the case for large businesses as the only way to make big, positive change happen is really yet to be made.

More from the library:
Joel Spolsky&#39;s method for splitting shares in a startup
The obvious, the easy and the possible
The idea funnel