The Internet is full of good advice about how to lead a healthy, balanced work/home life:

Leo Bauboa of Zen Habits built his Technorati 100 blog on one hour a day, leaving plenty of time for a day job and a family.

Tim Brownson reshuffles our priorities so we realize what's important to accomplish and what's not important to worry about.

Merlin Mann of 43folders shows us how merely admitting what we don't like about ourselves and our life leads to a vast menu of options for fixing it.

Penelope Trunk demonstrates that the point of a job is fulfillment and happiness, not the blind pursuit of money. 

If you don't have your health and your family, nothing else matters. On your deathbed will you wish you had worked longer hours or been a better parent? Will you wish you had spent more time Twittering or more time exercising, extending your life by five years?

Compelling. And yet, in my experience this attitude is not the path to success in small business.

Maximizing your chance for success means sacrificing health and family.

This sounds controversial, but it's not just me:

Jeremiah Owyang of Web Strategist: "How do I Keep Up?" This is one of the most common questions I get from folks, or a variant: "Do you sleep?" or "Do you have a family?" I can answer succinctly: "I don't, in shifts, and yes... I think." ... I'm lucky I fell into my passion. It comes with costs however, I'm out of shape, stressed, I don't sleep well, and my blood pressure is up.

Mark Cuban, self-made millionaire and owner of the Dallas Mavericks on how he acheived success: "I slept on the couch or floor ... Because I was living on happy hour food, and the 2 beer cover charge, I was gaining weight like a pig. But I was having fun. ... Every night I would read [software manuals], no matter how late. ... I remember sitting in that little office till 10pm ... I would get so involved with learning that I would forget to eat ...

More from Mark in an interview with YoungMoney Magazine: Question: "Did you have to sacrifice your personal life in order to become a business success?"  Answer: "Sure, ask about five of my former girlfriends that question. I went seven years without a vacation. I didn't even read a fiction book in that time. I was focused."

Penelope Trunk (yes, she has insights on both sides of this issue) on how all-consuming her company is: "I'm desperate. ... You're always sick, but not take-a-day-off-work sick. ... So I suffer with the pink eye, because it's not having all that gross green discharge yet, so I think I can deal with it after funding. ... I diagnose my [temporary] blindness as stress related. ... I say, 'My eyes are nothing compared to the pain of raising money.' ... There's no time for family.

"So what," you could argue, "just because many successful entrepreneurs are workaholics doesn't mean that's the only path to success."

Indeed, study after study has shown that "working more hours" doesn't translate into "accomplishing more shit." If you're not getting enough sleep, for instance, working extra hours doesn't make up for your foggy brain.

Also, optimizing how you spend your time can increase productivity several times over -- an increase you couldn't possibly match by working more hours.

Yeah, but here's the problem.

The "Rule of Closets" is that the amount of crap you own will expand to fill all available closet space. You can create more space by adding shelves and organizers, but then you'll soon discover you have more stuff.

Well I have a "Rule of Time in Startups": How much time does a bootstrapped company take? All of it.

Even ten people could hardly keep up with everything you do in small business -- creating, consulting, designing, fixing, self-promotion, blogging, networking, bookkeeping, taxes, customer support and cultivation, reading startup blogs for ideas and inspiration (!), and all those little crappy things like losing an afternoon troubleshooting your fancy outsourced IP phone system that was supposed to let you "work from anywhere."

One, two, or even three people can't do everything, so of course it takes all your time. If you're working a day job while starting something on the side, of course you don't have time to exercise or play with your kids before bed.

It takes obsession to make a little company go. Forget "passion" -- everyone's favorite word -- it's "obsession." It's not just that you love working, it's that you can't stop working. You're putting your entire self on the line -- your finances, your career, your ideas.

The obsession is there even when you're away from the office, having lunch with a friend or reading to your kids. As my wife would frequently point out in the early years of Smart Bear, my "mental and emotional bandwidth" was entirely consumed. You're physically there, but you're not really there.

Read those quotes above again and you'll see not just passion but self-destructive devotion. You don't put yourself through this meat grinder just because you "like something a lot."

"If you love it so much, why don't you marry it?"

Exactly.

Of course those life-coaches are still correct: This isn't a great way to live your entire life. You need to accept that this is going to happen and ask whether it's OK to incur this penalty right now. For me, I did all this in my 20's when I had no kids, I had enough savings to risk everything for a while, and I had a wife who had her own business and who therefore understood how much work it took and why I was spacing out over dinner.

Bottom line: Every successful bootstrapper I know puts work before self. (Until financial freedom is achieved.) I did too.

Let's discuss this! There are more arguments for both sides. Join the conversation by leaving a comment.

Dear Joel,

I regret to inform you that I must decline your invitation to be a featured guest blogger for Joel On Software.

I realize this will come as a shock, especially given my well-documented need for attention.

The fact is, I don't care how many thousands of readers you have, how many millions of dollars of software you sell, or how many minor celebrities worship you.  At the end of the day, you appear in a little window in an RSS reader. You fill in a template consisting of a cute story tenuously connected to a dramatic point, inspiring wanna-bes to commiserate and laugh with indignation at the stupidity of others. 

While they've been laughing, I've wondering whether you practice what you preach. You admonish programmers who don't understand Unicode, yet five years later our copy of Fogbugz still cannot receive email from Korea because of a character encoding issue.

Also, are you out of gas? Your column in Inc Magazine consists of 1300-word reproductions of chapters from your book which themselves are reproductions of blog entries you wrote in 2001. And your blog has turned into announcements for products and tradeshows.

I can already hear your fanboys calling for my head, but from where I'm sitting, you're a celebrity who is cashing in on fame, no longer compelled to have new ideas.

But introspection isn't your thing. Admitting you've been wrong or that you don't take your own advice would crack your well-crafted façade.

I'm not like that, and I can't pretend otherwise for you or your readers. I'm afraid the answer is no.

                     Sincerely,
                           Jason

Dear Mr. Spolsky, 

I'm not sure if you received the last email I sent. I hope not. I used Outlook's "recall this message" feature, but sometimes that doesn't work. (That's Microsoft for ya, am I right?  Ha ha!)

Anyway, I'd like to apologize for the things I wrote. I feel I've done both of us a disservice by refusing your generous offer to be a featured guest writer for Joel On Software.

If you want to know the truth, my unwarranted outburst stems from a core insecurity. Had you rejected my article, I would have been crushed. I guess this was my way of rejecting you before you could reject me. Juvenile, I know.

In fact I have deep respect for what you've done for the software development community over the past decade. I myself have been inspired by you since 2000; I can still remember the glee of getting new articles delivered to my inbox.

As an entrepreneur, you've taught me everything from how to hire great people, how to think properly about bootstrapping, how new projects help you cope with burn-out, and even how to run tech support. In fact, there's very little I do each day that isn't influenced by you in some way.

That's incredible, if you think about it.

What I'm trying to say is, I would be honored to accept your invitation, and I trust that you will disregard my first email.

                     Apologetically and humbly yours,
                            Jason Cohen

Hi Joel!

I haven't heard from you, so I'm forwarding a copy of an email I sent earlier this week.

You must get an ass-ton of email! So no hard feelings.

                     Talk to you soon,
                            Jason

Hi Joel,

Oh man, that article about hanging the blinds at Fogcreek was awesome. Did you really do all that? Of course you did, it was in the photo! I loved how you tied in the army story -- it's really motivational. 

I'm so glad Inc is featuring you. They need someone to speak truth to power and put the stuffed suits in their place. You're like the Moses of software developers! What's next, the New York Times? Why not!

Speaking of articles, I've got some article ideas I'd love to discuss! I know you're super-busy -- that's what I keep telling my friends. They're such nervous nellies -- they think you're ignoring me! A quick little two-second reply from you would really reassure them. Thanks!

                     +1 for Joel in the NYT!
                              Jason

Joel-

Quick idea: I was thinking of doing an interview series about how your writing has inspired successful software projects. Maybe even make a short film? You could attach it to your next "Interning at Fogcreek" DVD. What do you think?

Here's what I'd say: Your three part series on designing software for real people permanently changed my perspective and continues to be my bible. It's the kind of thing you have to re-read every few months to make sure you're building great, usable software.

P.S. I still haven't heard back about the guest post. Should I be worried?

                     Thanks again,
                             J

Hey hey J-Spol!

I was just telling a friend about your offer. You know, all I have to say is "Joel" and everyone knows exactly who I'm talking about. I guess that's how you know you've made it!

Anyway, this friend thinks that if you were truly interested, we would have had more conversations by now. Imagine how surprised she'll be when you publish my article! Ha ha, we'll both get a kick out of that.

Let me know.

                     Waiting expectantly,
                             Your boy JC

Hi Joel,

This will be my final email. I don't want to seem like a stalker!

So it turns out I have some influence over one of your interns (one of those friend-of-a-friend-who-owes-a-favor-to-a-friend type deals). He (or she!) set up me with a Copilot account behind the FogCreek firewall, so I've been playing with the Joel On Software system myself.

Seems like it's a custom job. No problem -- I'm Smart and I Get Things Done -- I'll figure it out.

So you should see my article appear soon! I'm glad I found a way we could work together without interfering with your schedule. Cheers!

                            --Jason

Modeled after "Dear Oprah" from Steve Almond's fantastic short story book Rants, Exploits, and Obsessions (Not that you asked). Good artists copy; great artists steal. (Said by Steve Jobs, stealing a quote from Pablo Picasso.)

A little product called Bingo Card Creator just had its biggest month ever. Patrick McKenzie runs this one-man software company.

In fact, February, March and April were its three biggest months since its inception in 2006. What recession?

Yes, you read that right. The Bingo-card-generation-software industry is growing while every sector of the economy is simultaneously in the toilet.

Patrick McKensie is too small to fail.

Think Patrick is alone? Balsamiq Studios is growing even faster. After their user interface mock-up design product netted $162k in their first year of business, today they're making so much money they're embarassed about it. They pulled in $35k during the first week of April alone.

Balsamiq Studios is too small to fail.

How?

If your niche is small enough, the customer need strong enough, your marketing targeted enough, your product good enough, your customers happy enough, they are going to buy, recession or not.

That sounds like a lot of "if"s, but let me show you that it can work.

If your goal is to have a huge company and sell $100,000,000 of software per year, you're going to have a tough time. You'll almost certainly fail, it will take years, it will take cooperation among many people you haven't yet met or hired, it will take a massive market, it will take beatable competitors, and it will probably take debt and/or investors. And yeah, a down economy could be your undoing.

But if your goal is to run a smaller sucessful business and be independently wealthy, it's different. If you'd be happy making $1,000,000/year or even $200,000/year many potential problems fall away. A small, focused market changes the rules.

In a small, focused market, you don't need a big marketing budget to get noticed. You know where your customers hang out -- the forums, blogs, community sites, influencers, local groups. You even know the keywords for AdWords and it's easy to optimize, like Patrick did. It takes time -- but not a lot of money -- to participate and get noticed. 

In a small, focused market, you can become the world expert of your niche. You can build the most popular blog, the most frequented forum, the best collection of how-tos, the most comprehensive eBook, the simplest, yet most complete software. Or, in my case, the most popular paperback book on a subject (37,000 copies and counting).

In a small, focused market, you can deal with competitors. The competition might be weak or there might be plenty of room for several winners. Competitors are easy to find and track and analyze. It's possible that you'll never see an 800-lb gorilla because the addressable market is too small for them to ever be profitable (Microsoft isn't going to make a Bingo-card creator). Any other competitor starting now will be way behind; if you keep moving they won't catch up.

In a small, focussed market, you can delight customers one by one. You can develop fans and cheerleaders who will buy anything and everything you make and spread the word to everyone else in the community. You can quickly amass testimonials for your website that sell your services and products better than any brochure possibly could. It's easier than you think; just be yourself.

In a small, focused market, recessions don't hit as hard. Your potential customers have a strong need, not a passing interest. Your existing customers have a personal relationship with you and will go out of their way to help you succeed, even in tough times. Because of your small size, 99.99% of your customers are still in your future, so there's always new customers to discover.

Prevailing wisdom is that "small is risky." It's just the opposite. When you just need to be Ramen-profitable, you can do so even in a recession.

Care to wager? In one year, who's more likely to survive: Balsamiq Studios, or a company with $30m paid-in capital that wasn't profitable even before the recession but has "amazing growth potential in a hot market?" Whose founders are more likely to put $1m cash in their pocket over the next few years?

Remind me again -- what's wrong with small?

Am I glossing over the down-sides of small business, or is this truly the best chance a founder has at becoming a millionaire?
Leave a comment and join the conversation!

Recently Fred Castaneda over at the Struggling Entrepreneur Podcast has been (literally) giving voice to some of my ideas.

You can go there for the podcast (or mp3) of Why you have to engage in social media and Starting a Business isn't crazy.

Of course you're probably more interested in content you haven't seen, such as Fred's interview with Jay Ehret of The Marketing Spot Blog where they talked about the transition from corporate day-job to part-time small business to full-time entrepreneur.

What you didn't know is that I also did an interview (mp3) on the travails of starting Smart Bear where I continued the recent trend of talking about the ugly, hard side of small business while giving specific advice on how to persevere.

My question to you, dear reader: Would you like to see more audio? Or is text good enough? Are audio versions of posts useful to you? Would you like more interviews or is that overdone?

Let me know by leaving a comment.

P.S. Yes, I get the irony of asking if you want to "see" more audio.  :-)

Tell someone you're starting a business, then brace yourself for their overwhelming show of support:

Wow, 95% of all businesses fail, right? That's scary.

Most businesses are never profitable and fail within 5 years.  That's mind-blowingly depressing.  Aren't you worried about all the time and money you'll lose?

So many businesses end in bankruptcy.  Aren't you worried about that wrecking your life?

I don't think that's a good move in this economy. (Right Dale?)

Well actually, these "well-known facts" are crap.

For example, let's examine that 95% failure rate. The United States Department of Labor reports that the number of business that terminate within four years is just 24%. And for only 17% of those, "termination" meant failure or bankruptcy -- the majority were businesses that were sold or the owner retired.

Sure starting a business is riskier than a job, but these proclamations imply that only an ignorant, greedy, egomaniac would be crazy enough to run into the arms of almost certain failure.

If you're thinking about starting a new venture right now, you need to understand the risks, but you need the real risks. The truth (as always) lies between these baseless off-hand remarks and those startup blogs that show only the rosy side of things.

First -- and bare with me on the pedantry -- you have to define "business." The 2006 US Census [1] shows that half of all "businesses" are a secondary income source, not the primary. More than two-thirds of businesses are started at home; only 21% of all businesses employ someone other than the owner.  In other words, most "businesses" are side-projects that the owners might or might not hope will grow into something more.

Not that there's anything wrong with a side-project! But data about "side projects" isn't relevant if you're talking about taking the Big Leap (quitting your job). After all, aren't side-projects more likely to fail than projects you put all your energy and time and heart and soul into?

Yes, depending on how you define "fail." An Australian study [2] found that 64% of business fail within ten years if you define "business failure" as "discontinuance of ownership." But that can mean anything -- even if the founder just loses interest which, if you have a home-based business that isn't your primary income source, could very well be the case.

In the same study, if you define "business failure" as "bankruptcy," the 10-year failure rate drops to a mere 5.3%! In other words, even when it's clear that the business isn't working, bankruptcy is rarely necessary.

What about those long hours you hear about?

Well, that one is true. Every self-employed person I know (myself included) works more than employees (except in those brutal professional sectors like medical services, legal services, and accounting).

Hard numbers: The Canadian government reports that self-employed people work 5 hours more per week than employees. But the real story is this: 33% of self-employed people work over 50 hours, compared to only 5% of employees.

What about making money? NFIB studies routinely report that one-third of all businesses are profitable, one-third are break-even, and one-third lose money.

So here we find some sobering facts. "Losing money" is pretty bad -- even being jobless is better than bleeding cash -- and "breaking even" isn't much better. This is real risk, and on top of this I'll add that you won't be making money for the first 6-24 months.  You need enough money to starve for a while, you have to set financial boundaries for yourself, and you have to walk away if you hit your limits.

However, remember that half of those business are being run part-time. "Hobby" businesses are popular; the fact that someone's back-room bead-stringing "business" loses money isn't relevant if you're thinking about becoming a consultant.

Anyway the real question isn't "How much money do I expect to gain or lose from running a business?" Rather, it's "How much money do I expect to gain or lose from running a business compared to my next-best alternative?"

For most people, "next-best" means a job.  In a 2006 Gallup survey [3] when small businesses were getting slammed with high gas prices, business owners reported four to one that they make more money per hour than working for another company in the same field.  That's profits, y'all, not revenue. And that's even with the extra hours small businesses demand.

Furthermore, half of those owners reported that they were earning more through the business than they would have in a regular job, and 76% said they're better off financially in general:

The US census backs up the "feelings" of these entrepreneurs [4]: In every year between 1990 and 2004, the biggest salaries came from companies with 0-4 employees and companies with more than 500 employees.  So if you're happy slogging it out at a big company, wondering when you might get laid off or have your job shipped overseas, then that's your best bet at a monthly paycheck. If that doesn't sound good, tiny companies are the way to go.

But then there's the economy. Why does everyone think starting a business in a down economy is bad?

Is it because you think no one's spending money? It doesn't matter: In your first 6-12 months you won't have many customers anyway, and those you do get are the most desperate for your product or service. If they're desperate, it doesn't matter what the economy is doing.

In fact a bad economy is perfect. Every vendor is hurting: get cheap furniture, cheap rent, cheap advertising, cheap services like art and web design. Good people are out of work; all the better to get help at half-price or a co-founder who just got laid off.

At Smart Bear we just hired a design consultant for 1/3rd of his usual rate. Advertising vendors are dropping their prices without me even asking. Subleases are everywhere as companies try to recoup the cost of their seven-year lease now that they've laid off half their staff. It's prime time to get stuff at low cost.

Here are six reasons to start up in a bad economy.  Here's six more.

But in the end, the real question is one of fulfillment and happiness, not merely of financial success. With a regular job, "happiness" and "money" tend to be inversely related -- it's hard to have both. This is summarized neatly by Juhan Sonin's evaluation of his own life:

Running your own business may be the way to break the pattern -- both making money and doing what you love -- but small business is stressful and difficult and scary. Is it worth it?

To answer, I'll leave you with this chart from the Gallup [3] poll:

Hey small business readers! How about sharing your own words of encouragement with other readers of this blog! Inspiring words are great when you're overwhelmed. Leave a comment!

References:

[1] US Census, 2006 survey of business owners.  Data here.
[2] John Watson and Jim E. Everett in Journal of Small Business Management, October 1996
[3] Gallup News Service, 2006 Smart Business Index poll.  Came to my attention via the the Corporateprenuer blog
[4] US Census Statistical Abstract 2008 Table 0737.  Data via infochimps.org.

A common marketing exercise tells us to list all the adjectives we want customers to associate with our company or product. The result often looks like this (real slide, source withheld to protect the guilty):

Already I'm cringing at the size and scope of the list, but the real problem comes when the marketing department plays Mad Libs:

Sun GlassFish™ Enterprise Server is easy to use, fast, and scalable ... easy to download, develop, and deploy ... facilitating robust, highly-available, and cost-effective services. (source)

The product description above is prima facie false. In all your experience with computers and software, have you ever experienced a system that truly embodied every one of those attributes? No trade-offs, no compromise? A-plus-plus on every count?

Of course not. Since I don't know which of these claims are true, now I distrust them all. And you haven't communicated anything tangible. Fail.

The cardinal rule of authenticity and believability is that actions speak louder than words. A corollary is that if you have to tell me something's true, I automatically don't believe you. If you're honest, you don't walk around saying "Hey, did you know I'm honest?"

Your "values" aren't words to be shoe-horned into tag-lines or stapled onto disingenuous mission statements. Values are the reason for your actions, the theme behind your words, and the underlying consistency in how you do business.

Hollywood actors call this "motivation." A character's motivation is the secret reason why she is angry or depressed or indifferent. A common technique is to invent a back-story -- construct a detailed account of how the character has gotten to this point in life.

You don't publish the back-story. You don't come out and say "Darth Vader is disillusioned with the notion of a Republic." Explanation ruins everything!

Apple has mastered the art of demonstrating values without words. Apple has values like "design is paramount," "form over function," and even "Apple is cool." But an iPod wouldn't be cool if some corporation claimed it was. Listing features/benefits wouldn't communicate that either.

This does: (Yeah this clip is dated, but remember how amazing it was?)

How would "standard" marketing machinery portray these "features and benefits?"

This rule of values -- show, don't tell -- doesn't just apply to commercials. It's in customer service, your website, how you sell, and even how you hire.

Actions count; words don't.

Explaining your values comes off as disingenuous:

• If you have a high-quality product, you don't say "Your satisfaction is important to us," you have a 90-day no-questions-asked return policy. 
• If you care about talking to customers, you don't play a recorded message saying their call is important to you, you simply answer the phone. 
• If customers love you, you don't say "100 companies use our software," you have a web page with 100 stellar testimonials. 
• If you treat your employees as human beings, you don't call them "resources," you mock companies that do that and display testimonials from your own employees.

Once you're walking the walk, then you've earned the right to call it out:

• "We're so confident in the quality of our hammer, if ever breaks we'll swap it out with a brand-new replacement. For free!" 
• "At MyCo, a human being always answers the phone. Why? Because business is personal." 
• "Don't take our word for it, read for yourself what our customers say. Did we pick the best ones? Well yeah, but we have 100 'best ones!'" 
• "What if programmers were treated like rock stars? ... management, not coding, is the support function. ... people love working here." (from Fog Creek)

The "values" here are still words like "quality," "service," "happy customers," and "great place to work," but they're tangible demonstrations, not trite phrases plastered in all the expected places.

Let values motivate action. Values are the means to the end. Get to the end.

What are your techniques for exhibiting positive values without announcing them? Leave a comment and join the conversation.