Does a lifestyle business have to solve a problem, like startup does?
I'm really interested in "lifestyle business" recently.
Based on my browsing on the net, it seems like many lifestyle business ideas, like writing books, blogging, podcasting, dropshipping. Many of them involves, IMO, some sort of soft-problem-solving, meaning they're not addressing hard needs. Like
- selling people stuff that they might not really want,
- giving them content that they may or may not care
These tends not to be startup idea because they don't really scale, but they're great for covering personal expenses and having a good life.
So if I want to start a lifestyle business one day, do I have to go the startup route for solving others' real problems, or maybe starting with something more subtle like above, and that may be a easier route? Especially given that many startups ended up being a lifestyle business.
The idea behind solving a problem is that it's the only way to get customers to choose you. Think about all the websites, books, movies, etc. that exist. People have billions of options for how to spend their time at any given moment. If they use your thing over the other billions of options they have, that's a minor miracle. But you don't want your business to have to be a miracle. You want it to be a repeatable thing.
Luckily, if you look at how people behave, there's a method to the madness. They aren't just randomly choosing things to do. They tend to pick things that solve a pressing problem for them. Maybe they're hungry, so they need to eat. Maybe they're bored, so they need a distraction. Maybe they're moving, so they need a moving truck. Etc.
Every successful business solves a problem for someone.
Of course, it's possible that you're not solving a valuable problem, or that you don't understand the problem, or that you have 1000 undifferentiated competitors also solving the same problem, etc. These usually aren't good things, but they're not necessarily bad.
For example, if you're making games, the problem you're solving might be as vague as, "People want to feel good." Great, you have a million competitors who are also solving that problem: concerts, movies, social gatherings, massages, other games, etc. You probably need to niche down to find a certain kind of person who craves a certain kind of feeling and has an affinity for games, and beyond that, you likely just have to execute like crazy to build an amazing experience and find a great distribution channel to beat the competing games.
But you're still solving a problem for people.
@csallen This perspective blew my mind a bit, really! It makes total sense thinking it this way.
Thinking under this framework, the Q might've become, how does solving problems like "people want to feel good" or "people are bored", translate to execution?
Reusing the example, we make a game. Then as you said, there'll be millions of competitors, not only from the game space, but from entertainment space in general. It seems that the strategy would be niching down to a small group of people, who love the game and expand from there. The tricky thing is, because we have this very vague "problem definition", it's very hard to pin-point, whether we're facing a retention issue, or a growth issue.
Compared to, we know certain group of people have certain problems, we just talk to them, come up with a solution that solves the problem, and iterate.
In the gaming case, it'll be more like, as you said, amazing experience vs distribution channel (or growth vs retention):
I mean I know all businesses face this issue, it just seems that for these types of business, the issue seems vaguer and harder to solve.
What's your thoughts on this? How do you think it should be tackled under this way?
Always strive to solve a problem or remove a pain--unless you're building a purely entertainment focused business like a game or something else. The idea behind a lifestyle business is to question growth for the sake of growth and to prioritize your business operations around the quality of life you want.
Venture-backed companies are often not considered "lifestyle businesses" because their founders are focused on growth, revenue, and returning a lot of money to the shareholders. Lifestyle business owners are still interested in growth, and money, but only so much as it affords them the kind of life and flexibility they want.
Thanks! The part about growth in lifestyle vs venture-backed makes total sense, you covered it very clear.
I suppose building things like, podcasts, blogging, youtube channels, writing a book falls into the entertainment parts, maybe? Even dropshipping, like selling something people may or may not want.
I'm always a little bit confused about these two sorts of business: solving a problem vs entertainment. I didn't see a lot of people talking about the difference either.
Solving a problem, the logic seems easy. Identify a problem, make a product, get your customers to use and pay, until the point where their problem is completely solved.
On the other hand, the entertainment part seems a bit blurry. If I try to monetize something that's not a hard need, when people are not buying it, how should I go and reason about the issue? More marketing vs better content. To me the logic is a bit unclear what to do really. Do you have any thoughts on that?
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Not sure I see games or entertainment in the same way that @csallen explains in the reply above as solving a problem--because I think consumers can be irrational with purchases and buy just based on impulse for something that seems fun and that doesn't necessarily have to solve a problem (big or small) that they have.
But I think this is a case of "tomato" and "to-mah-to"...haha, so I don't disagree with his comment. At the end of the day, the people buying those types of products are in need of that type of entertainment and willing to spend their money on it. The creator identified a need and brought it to the right audience.
If you're looking to bootstrap a business, doing something that requires educating your potential buyer before they purchase your product is risky.
This is why a lot of bootstrapped businesses go after known problems that already have solutions on the market (because the end customer is already used to paying for something to solve that problem). It's easier to convince someone to buy a product for a known problem and established category, than it is to educate them on the problem they may be having and then convince them to buy your solution to that problem.
In general, lifestyle businesses are often bootstrapped in large part (because without a lot of shareholders and investors, you are free to craft the type of business you want).
I think what you said makes sense. The general principle is still the same, build something a small amount of people love. And if it can scale, it's a startup, if not or we chose not to, it's a lifestyle business.
The getting started part is right too. It definitely sounds harder. Then I think the question might become, why am I doing this at all, when I just get started with no result or success?
I was always under the impression that, one has to have extreme passion to get started to solve one problem, but I guess that's more for the startup case. It sounds to me the attitude of "throwing things to the wall and see if it sticks" may work better here? Because "entertaining other people" is such a broad and vague topic so it might be hard to get passionate about such a general thing. But that's just my opinion, I've never been good at entertaining other people anyways...
I wouldn't phrase it like "solve a problem", but you definitely need to have a target audience and a distinct product for that audience.
That audience is who's going to come to your business for however you make money - ads, affiliate sales, etc.
I try to have an avatar not just for my reader, but for my blog (kind of lifestyle). So I can describe the reader as a person, but also describe the blog as a person who'd be friends with the reader.
I could shoehorn the above into "solve a problem" but the fact is the audience for my blog (about $500 a month so far, growing) has a variety of varying problems. I haven't been able to capture it in one sentence yet. Actually that vexes me a little — I'm trying to.
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@Dherg Thank you so much for all these insights!
To summarize what you said, it seems that
This totally makes sense, and so much had resonate with me. I guess the main thing I can read from your experience is that, it's easy to make bad decisions when there's no problem at hand or a strong understanding of customers.
But on the other hand, it seems that your team's goal was to make a scalable startup, not a lifestyle business, so I guess it sorta makes sense that issues came up when trying to scale.
Was there a time that your team was thinking we should stop growing the business and satisfied with the current sales number/revenue? Maybe there was a point where the business was profitable then it can keep going that way?
Again, appreciate your sharing the experience, it's invaluable.
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