Consulting: Startup or Lifestyle Business?

In the startup world, these two terms mean very different things.

A startup is a company designed for growth. It has to scale far beyond the founders’ skills and time – and that means rapidly taking on additional staff and risk. Startup founders live a compromise: they work their tails off night and day, trying to deliver value as quickly as possible, with the end goal of selling their company. To deliver on everything, they have to hire staff quickly too, and the founders ask their staff to hustle just as hard.

A lifestyle business helps the founders live a particular lifestyle with a base level of income. This business is all about compromise too – its founders aren’t going to build something that sells out to Facebook for a billion Bitcoins. They have to keep working in order to keep the lifestyle going.

Corporate Retreat 2014

These two businesses have different levels of:

• Income
• Work hours
• Family time
• Travel
• Stress
• Fame
• Debt
• Risk

When you decide to quit your day job and become a consultant, make a conscious decision about which type of business you want to build, and what kind of founder you want to be.

That one initial decision helps guide the rest.

Neither decision is wrong – they both work – but this isn’t a mark-all-that-apply question.

Why Hybrids Rarely Work

You could theoretically start a lifestyle business, work at it a long time, and eventually build up enough value that it can be sold without you staying involved.

But if other folks see you being successful at your lifestyle business, they’re going to start up similar businesses to solve the same problem. Rather than building a lifestyle business, though, they’re going to build startups. They’ll put the gas pedal to the floor, burn the midnight oil, and ramp up their business value as fast as possible. They’ll be the ones who get acquired, and then they’ll have the resources to build an even larger base.

You could also theoretically start a startup, and then eventually coast down into a lifestyle business. That rarely works because startups require such aggressive risk and debt – it’s hard to coast them into a relaxed cruising speed.

My Own Career Choices

I’ve done the small startup employee thing. I remember the excitement of funding coming in, moving up to nicer offices, and acquiring other companies. I also remember my startup employer skipping a paycheck at the exact time I was trying to buy a house. I remember the incredible stress of walking into the mortgage company’s offices with my prior 3 paychecks and playing dumb, pretending I just hadn’t received the paper copy of this week’s, and hoping like hell they didn’t ask for one.

Later, when I worked at Quest Software, I saw life at a much larger quasi-startup. I still got to be around a lot of startup employees – but it was because we acquired them, hahaha. Those small startup founders made good money, but, well, at the end of the day, they were right back at a big company, sitting through meetings, working long hours. They’d sacrificed some of the best years of their lives, and I wasn’t sure the returns made sense.

This time around, when Jeremiah, Kendra, and I wrote a big manifesto about Brent Ozar Unlimited‘s company’s goals, we focused on lifestyles. We wanted to be financially comfortable enough, but we didn’t want to sacrifice our family lives to get there.

How Our Decision Drives Our Consulting Company

That decision drives how we hire employees. We don’t grow aggressively – we want to be able to cover months and months of salaries even if the economy hits another bump. That means even though we get lots of calls for consulting help, we don’t hire willy-nilly. We aimed for growing by one employee a year for the first few years.

That decision drives how we treat employees. We know we could sell a DBA-on-call product and instantly boost our bottom line, but it would come at the expense of our employees’ home lives. (Well, that and we’d probably have to hire different employees, and probably even different founders, because none of us are fond of pager duty.)

That decision drives – heck, it even drives what we drive. I’ve got a 6-year-old car that I’m quite content with. Sure, I drool over the new Porsche 911 Targa – what an incredibly trick folding roof – but I’d rather relax this week at a conference in Orlando and catch up with friends.