Some time ago Rafael Rosa (@rafaelrosafu) presented me the concept of lifestyle startup in opposition to the growth startup everybody knows.
Growth startups vs lifestyle startups
Growth startups – or companies- are startups that have one main objective, accelerated growth so it can make founders, investors and shareholders substantially rich when the startup is acquired or make an IPO. When you are focused on accelerated revenue growth, all your actions are driven by this goal, which has top priority on top of all other matters, including products, customers, employees, suppliers, quality, etc. Normal product question you hear in this type of startup is “how do we make this product sell more faster?” or “can we create another product or add-on feature to charge some extra money from existing customers?”. In this type of startup you tend to have people passionate about money.
Lifestyle startups – or companies – are startups where revenue has the objective to sustain the company and it’s founders and employees lifestyle. As soon as this issue (company sustainability as well as founders and employees lifestyle sustainability) is solved, the company can have full focus on product, customer, employees, suppliers, quality, etc. Normal product question in this type of company is “how do we make a great product that solves real customers problems?”. In this type of startup you tend to have people passionate about the product.
Sometimes it can be difficult to identify what type the startup – or company – is, but normally a conversation with the founders or some key employees around the topic of company purpose and people’s passion have good potential to help you identify the type of startup you’re dealing with.
Thinking as a customer and another comparison with the medical world
Moving the point of view from the startup founder to the customer, i.e., use your customer hat and think as a customer. What type of startup do you think would you, as the customer, prefer to solve your problems?
People who read my posts knows I like to make comparisons between business world and medical world:
- Leading is similar to being a doctor
- Software development, craftsmanship and how to choose a professional
- The Checklist Manifesto
So here goes another analogy using the medical world. Move again your point of view and suppose you are a patient who received the news that you have a certain issue that requires surgery. What doctor would you choose to do this surgery, one who’s primary purpose is to get rich with medical practice or one who is really passionate about medicine and about making other people’s life better? Again, sometimes is difficult to identify the type of doctor we are talking to, but normally the way she describes your case and how it could be solved will give you hints on what type of doctor she is.
Ok. So back to my original question: what type of entrepreneur are you?