Choosing Lifestyle Companies
There are at least two ways to prioritize a company's money and efforts: you can prioritize for growth or you can prioritize reducing operations. The second option is one too few companies take.
When companies prioritize for growth, a familiar pattern appears. The company needs to raise money to hire more employees so it can scale to make more money which it will use to raise another round to hire more employees... You see where this goes.
This pattern can and does work. When it does it becomes a positive feedback loop to considerable success. When it doesn't work, or when it slows, it looks an awful lot like circling the drain.
The path we don't often hear about is reducing operational input. Put another way, trying to make a company function as autonomously as is reasonable. Achieving this is difficult, but the benefits of success are abundant. Who doesn't want to have a company that makes money with little-to-no intervention? I consider companies in this camp to be lifestyle companies. Not because they need represent any specific lifestyle, but because they enable unique lifestyles for their employees.
Who doesn't want to have a company that makes money with little-to-no intervention?
For lifestyle companies, a couple of atypical challenges stand in your way. First off, we need to have customers. So finding sustainable ways to offset customer churn will be tricky. Our targets should be to either plateau or grow our customer base. The other challenge is customer support.
Achieving sustainable growth
I'll start right away by saying i don't have the silver bullet for sustainable growth. I, too, seek El Dorado. I will say that lifestyle companies should be looking to reduce the operational input their company requires. That input includes financial. If your company survives on the shoulders of a substantial sales or marketing spend, it means you are probably leaking more customers than you'd like to be.
The easiest way to achieve regular growth is to reduce the loss of customers you already have. I assure you they are the cheapest ones to have around next month. Like your customer support needs that will follow, keep a pulse on the reasons people leave your service. Plug the holes in your boat.
Conquering customer support
How should you expect your customer ticket volume to change over time? If you thought "it will grow with the number of customers we have" you are only half right. Your ticket volume will grow roughly linearly with unpolished features x customer base. That's right. If you keep the same number of customers but add more features your ticket volume will rise. Keep the same feature set and add customers and you will see a similar increase.
The trick to staying ahead of your customer support needs is to watch both of these metrics. For a lifestyle company the implication is be quite clear: polishing existing features is a compelling alternative to coding new, yet unpolished ones.
Aligning ideals
Whether your are looking to start a company or are trying to decide the future of one, what you want that future company to look like is a place that alignment simply must exist with your team.
Ask yourself: what would your ideal company look like? Don't focus on what the company would actually do. Think about how many people would work there. How many customers would you want? How much money would you want to make? These are the important questions to ask yourself and your team members.
I have realized in the last few years is that similar people might answer the above questions quite differently. There are no right answers to these questions. The only wrong answer is to fail to acknowledge the views and align a team toward a vision.
tl;dr: Lifestyle companies trade the unicorn dream for a vision of freedom. These are some of the challenges to expect along the way.
