(1) Sole proprietorship. Own boss, Only employee, Do everything
(2) Two-person Partnership. Couple has very complementary skillsets (business, the detail person, the creative one).
Friends, a team. Neither one of them would probably be able to do it on their own. But they are together, successful.
Rely a lot on each other, do their business together. Cons: Have to split money two-ways instead of one.
and People can stop getting along. But when they work they're beautiful.
(3) Husband & wife team. Assuming that the marriage is a good one, you know that the partnership already works. Money
already goes into one bank account. Lots of designers married to software engineers with web-based businesses.
(4) Boutique. Small office. More than a partnership. Very small. 6-8 people. The right small number of people together
creates a very warm almost family-like culture. Scope of what you can accomplish is relatively limited.
But knowing that you're not worrying about growth frees up cycles. Since most companies, focused on growth.
Client relationships - very strong, very deep, can pay attention. Most boutiques are bootstrap businesses, not a lot
of startup capital. Fun businesses.
(5) Investment-bank type. Federated model. People operate their own P&L's inside the larger organization. Shared office.
Shared infrastructure. Good year, you benefit. Bad year, you struggle.
Law firms, consulting firms, investment banking firms. You want to be your own boss but don't have the capital
or you don't want to take the risk.
(6) Project. Film-makers, authors, musicians, really - many people can do this. An entrepreneur who goes from
project to project to project. 100% project when on, 0% in-between project. Good model for people who are good
enough to get work whenever they want. Serial entrepreneurs - 4-5 yrs build company, sell it, sabbatical/downtime, repeat,
rinse. If you are the kind of person who gets deep into something and it's the only thing you can do (on). And
need downtime when you're not working 100% (off).
(7) The sole-proprietorship lifestyle-focus. Travel around world, run business from laptop. People can live vicariously through you. Sole proprietor
but also using business as way to live lifestyle. Young, not married, no kids.
(8) The Startup. Hustling every day. Moving fast, lots of energy, fun group. Successful or not - who knows? Challenges.
Maybe they'll be successful. Maybe not. But they're giving it a shot.
(9) The Breakout. Idea inside another company. Build it. Might take a life of its own.
Incubate another company. Spin out into another company. Become a business.
Without knocking any other business model, there is a lot to be said for sole proprietor plus freelancers/suppliers/etc. I can only do what I do because of about a dozen other folks who pitch in from time to time -- but if needs change and their business and my business need to go our separate ways, it feels like merely not calling someone back, rather than like a divorce.
FWIW, a sole prop isn't a one-person show. You can hire 1000 people if you want to. What it means legally is that you and your business are the same. You have unlimited liability and you're taxed on a personal income basis.
I understand what they're saying here, but it's strange to confuse the size/style of business with sole prop, partnership and other legal terms.
Also, if you've run a business that's a separate P/L inside another business, a project where the money is coming from a 3rd party or anything involving 'investment' you know you are in no way captain of your own ship at that point.
I liked the story (paraphrase) about him closing the deal to invest in Foursquare and saying "Okay so give us your checking account and we will wire the money" only for the answer to be "Err, we don't have a checking account".
Hmm, the concept of a federated structure is particularly appealing to me. Does anyone know of Allen & Co type setups for tech entrepreneurs? Co-working spaces like BetaHouse and Work Bar Boston come close, but I'd like something even more structured. If anyone in Boston or NYC is interested in starting something like this, e-mail me!
For everyone else, this is really an interesting talk well worth your 20 minutes.
Somehow this has a much bigger impact on me than the 37Signals series as far making the case for bootstrapping. Most likely it is because FW is a VC himself and presumably has a vested interest in seeing startups take capital.
I really want a transcript because the video is going to take like 5 hours to load here in China. Or maybe the video hosting company just needs to get some servers in Asia.
Applying the "project" model (6) to a programming career: with 3 or 4 small projects a year on Kickstarter or App Store(s), you might be able to make a modest living. I guess that the special challenge of (6) would be to build up a good enough reputation and get people's attention.
(1) Sole proprietorship. Own boss, Only employee, Do everything
(2) Two-person Partnership. Couple has very complementary skillsets (business, the detail person, the creative one). Friends, a team. Neither one of them would probably be able to do it on their own. But they are together, successful. Rely a lot on each other, do their business together. Cons: Have to split money two-ways instead of one. and People can stop getting along. But when they work they're beautiful.
(3) Husband & wife team. Assuming that the marriage is a good one, you know that the partnership already works. Money already goes into one bank account. Lots of designers married to software engineers with web-based businesses.
(4) Boutique. Small office. More than a partnership. Very small. 6-8 people. The right small number of people together creates a very warm almost family-like culture. Scope of what you can accomplish is relatively limited. But knowing that you're not worrying about growth frees up cycles. Since most companies, focused on growth. Client relationships - very strong, very deep, can pay attention. Most boutiques are bootstrap businesses, not a lot of startup capital. Fun businesses.
(5) Investment-bank type. Federated model. People operate their own P&L's inside the larger organization. Shared office. Shared infrastructure. Good year, you benefit. Bad year, you struggle. Law firms, consulting firms, investment banking firms. You want to be your own boss but don't have the capital or you don't want to take the risk.
(6) Project. Film-makers, authors, musicians, really - many people can do this. An entrepreneur who goes from project to project to project. 100% project when on, 0% in-between project. Good model for people who are good enough to get work whenever they want. Serial entrepreneurs - 4-5 yrs build company, sell it, sabbatical/downtime, repeat, rinse. If you are the kind of person who gets deep into something and it's the only thing you can do (on). And need downtime when you're not working 100% (off).
(7) The sole-proprietorship lifestyle-focus. Travel around world, run business from laptop. People can live vicariously through you. Sole proprietor but also using business as way to live lifestyle. Young, not married, no kids.
(8) The Startup. Hustling every day. Moving fast, lots of energy, fun group. Successful or not - who knows? Challenges. Maybe they'll be successful. Maybe not. But they're giving it a shot.
(9) The Breakout. Idea inside another company. Build it. Might take a life of its own. Incubate another company. Spin out into another company. Become a business.
(10) The Company