Ever heard the term “lifestyle business”? A post by Hillel at jacksonfish.com came up with a Twitter-friendly definition:

“Lifestyle business” is the patronizing term for businesses unwilling to grow at the expense of the quality of their product or workplace.

Ok, maybe that’s harsh.

A lifestyle business, in essence, a business that is privately held, usually (but not always) held by one owner that is not focused on growth of the business beyond a certain point, usually that point being the owner’s aspired to lifestyle (hence the term “Lifestyle Business”). As Hillel implied above, our businesses are often snickered at a bit (especially in tech), as if we’re the business children sitting down next to the grown ups table – because at the grown ups table, that’s where the real money is made.

Basically, this is the web 2.0 name for a “family business”.

DrakNet is, absolutely, 100% a “lifestyle” business – and we were one before the term became popular. My husband likes to tell me I didn’t really found a business so much as I created myself the job that I wanted that would pay me the salary I wanted. That’s probably closest definition that fits, for me – though I do wish my boss would give me weekends off occasionally.

Soul Shelter’s Tim Clark wrote a few years ago about the difference between Lifestyle-Focused or Family Businesses, Middle-Market Companies, and High-Potential Ventures, reminding us that Lifestyle and Family businesses account for 90% of new businesses. While many associate “business goals” with having an IPO, millions in revenue, and so on, most business don’t ever reach that height. If Tim’s figures are correct, the overwhelming majority of them don’t even aspire to it.

So, if we’re at the kid’s table, our table’s a heck of a lot bigger than theirs. And we probably have better food.

While DrakNet could fall under Middle-Market in that it is an imminently and exponentially scalable business, it has also often been jokingly called a “cult of personality” in that my vision for it is a huge part of what drives it to its success and longevity in what is a highly competitive and highly volatile market. While it could survive should I no longer be the owner, it would likely not really be the “DrakNet” people associate with us and our service.

Contemplating getting into reselling as a lifestyle business can be scary. The market’s saturated with so many web hosts that their advertising noise can drown out everything else in certain corners of the web. And again, there’s the big people table/little people table thing in the web hosting realm…

The Data Centers are the big players, and they’re more important than…

… the hosts that co-locate servers in the data centers, but own their stuff…

… the hosts that lease servers that don’t own their stuff…

… the resellers that have resellers accounts with shared hosts…

Well, you get the picture.

Now, this isn’t about reselling, per se – lots of people resell. Most people are not doing it as their full time job. This is about starting a web hosting service as a Lifestyle Business, getting a reseller account and starting reselling with the intention that you will eventually quit your day job and do it full time. Can you do it?

Sure you can. Not only did we do it, but we know a number of companies that did it.

Some of those companies are, all these many years later, still “Lifestyle Businesses”, supporting their owners lifestyle and sending the kids to college. We actually do server maintenance for a number of these folks who are just as successful or more successful than we are but who have absolutely no aspirations beyond what they have acheived.

Some companies have gone on to become Middle-Market companies that are still privately owned and tightly controlled, but who have exploded in growth. Liquid Web started in the same year we did, 1997, and we have 6 servers in their data center (which houses roughly 10,000 servers across 3 data centers).

Matthew Hill, the founder of Liquid Web was just sixteen in 1997 – again, the year that he and I both started in this industry. (I was… um… not 16 in 1997. We’ll leave it at that.) He, no doubt, had far different goals than I did – when he got slammed with orders, he probably had a party. When I got slammed with orders, I stopped taking them because I had no interest whatsoever in ever having to leave home to go to work. Both of us started in the same place, though, and arrived where we wanted to be. Web Hosting is a fabulous business that way.

Heck, you could even argue that Liquid Web is a lifestyle business – its just that Matt’s lifestyle costs a lot more than mine.

Web Hosting is an excellent choice for a lifestyle business, whether your lifestyle is mine (A Dodge Caravan) or Matt’s (a really awesome Lamborghini). It’s a business that is truly flexible with regards to time, commitment, and “lifestyle” as long as you make the right decisions coupled with great offerings, support and vendors.

The reason I point out Matt’s different level of success is that if you read how Matt started, you’ll see that his story is incredibly similar to how we started, and they really are the two sides of the success coin. Even the industry behemoths started somewhere – and many of them started the same way you still have the opportunity to. If you don’t want to be a behemoth, you can do what we did and strictly control growth, maintaining your time, money and desired lifestyle.

Both places are attainable depending on what you want to put into it, and where you want to go.

The awesome thing about web hosting is that you really generally can steer your own business growth exactly where you want to go if you’re smart about it and if you choose the right vendors, offerings, and educate yourself. If you are willing to constantly grow your understanding of this industry, it can not only turn into a business that you can grow slowly or fast, with no investment from the ground up slowly or with a loan to try and explode, if you do it right it can be extremely lucrative as well.

Deciding to jump into reselling with the intent of creating it as a “Lifestyle Business” can be tough. As a smaller shop, you have to think if a lot of different contingencies, and make sure your vendors are people that you can trust to value your business.

We’ll save that for another time.

Tags: lifestyle business, reselling

This entry was posted on Wednesday, February 24th, 2010 at 10:35 am and is filed under DrakNet Banter. You can follow any responses to this entry through the RSS 2.0 feed.Both comments and pings are currently closed.