There is a pioneer spirit in each of us. We all love to be the first to arrive at some great new, previously unexplored destination. Yet following someone is not always a bad idea; second-hand conviction is a tasty dish that, although slight cooled and perhaps not quite as fresh, can still be quite fulfilling. The big question is when it is better to lead into the unknown and when is it better to follow someone else.
There is, of course, such a thing as being too late – but is it really always so great to be the first to arrive at a party? If you planned to settle in the American prairies of the Old West, would you want to be in the first arrow-riddled wagon convoy to stake your claim, or would you rather bide your time, learn from the pioneer’s mistakes and arrive in comfort on the steam train a month later, well-prepared and well-rested to grab the generous second helpings?
Nowhere is this question more pertinent than in business startups. One of the dangers of following a pioneer is that it is easy to mistake blind passion for entrepreneurial vision. The first person to risk it all to venture into unknown territories might be willing to make sacrifices that go beyond what you would consider reasonable. It is not always good business sense to follow a dreamer who chooses not to wake up.
One of the great examples of running after someone into a snake pit is the so-called lifestyle store, a very common phenomenon here in Taiwan, where starting up a small business is easy. A lifestyle store is simply a business that exists only to provide its owner with an (often very basic) income and a particular lifestyle that he or she craves. It is not a viable business in the normal, commercial sense of the word.
Take a typical downtown mini coffeeshop. Whenever you walk past, the small place is packed - all three tables. The owner looks like the happy monarch of a tiny, benign kingdom, chatting with his friends, sipping espressos with listening to his favorite jazz music. He seems happy, never busy, always having time for his friends. You might be tempted to emulate its success. Obviously, there is a market for coffee in this neighborhood – the tiny place is always full. And running a business like this looks like, well… fun.
But what you don’t see is that this no more than a lifestyle, emulating a business. For the owner, it is a great way to do what he wants to do in life: connect with his friends and listen to music while drinking fine espresso. The coffee shop is his living room. Running this small business is his hobby and his life. He does not take vacations. He works weekends and evening, too. He does not have personnel. And he does not make any money. Or grow.
Reality starts to bite when you decide to emulate this coffee shop owner and open up your own “Bob’s Coffee & Croissanterie” down the street. Suddenly you have twelve tables to fill and staff to pay. No free weekends for the foreseeable future for you. You thought you followed a sound business idea. Instead, you find yourself trying to enjoy living someone else’s dream. Good luck with that.
Lifestyle stores are tempting to emulate. They are small, have low operating costs and look moderately profitable. And they also look like fun. But copying someone else’s lifestyle is not a guaranteed recipe for happiness. Make sure you crush the numbers and take a good hard look at the reality of entrepreneurship before you follow someone’s footsteps.
Don’t get me wrong: I love lifestyle businesses – I have one myself. But I remind myself always that is an alternative road to happiness, and never a way to cash out quickly. A lifestyle store should never be your plan for early retirement, but it could very well be what keeps you busy and happy for the rest of your life.
Luuk F. van Heerde