I just finished reading Adii Pienaar's book Life Profitability: The New Measure of Entrepreneurial Success and felt compelled to write this post for a simple reason...
I believe "life profitability" is the single most important idea in all of entrepreneurship.
If you're going to invest an enormous amount of your time, energy, and money building a company... why? Shouldn't the end goal be to enrich your life as much as possible?
I think that it should! Yet when I look out my entrepreneurial window I see a landscape scattered with overworked founders that are sacrificing their lives to build business profits while missing out on the real goal of entrepreneurship—accumulating life profits.
The two are very much related, yes—but too many entrepreneurs these days seem to be losing sight of the forest through the trees. I think this has become a pandemic of sorts within the entrepreneurial community.
"We trade happiness for money. If we do that over the course of a lifetime, we have given up a lifetime of happiness."—Adii Pienaar
Life Profitability is only the second book that I've dedicated a post to on this blog in five years. It's worthy of its own post for two reasons:
Entrepreneurs all understand, without exception, how profitable their businesses are. But very few stop to do the same level of accounting when it comes to their overall life—it's extraordinary how few of us closely examine how much our creations—our businesses—contribute to or... (gulp)... take away from our "life profits." We understand how the income we make from our companies influences our lives, but we rarely look holistically at how the time, energy, money, and other resources we pour into our businesses affects the rest of our lives.
I think it's about time that changed—I think it's about time we more closely examine how much our businesses contribute to our overall life profitability!
There are far more talented entrepreneurs than me. There are more skilled marketers. I'm certainly no technological visionary. But one area where I will give myself credit is I've always been really good at "work / life balance." Throughout my career I've worked fervently, mostly passionately, and hard—yet I've always been good at putting business in its place. I've prioritized my life in a way that few people I know have. That's something I'm proud of.
Adii himself is a successful entrepreneur, who like many followed the popularized archetype of an entrepreneur by working extremely hard on his way to creating multiple successful businesses. But along the way, he accumulated some collateral damage in his life—he was smart enough to recognize and correct that, which I applaud him for.
The theme of life profitability was born out of his experiences and is really quite simple; your life is more important than your business. That's not an earth shattering conclusion—I think we almost all recognize this. But as you look across the entrepreneurial landscape, you know as well as I do it's filled with people working ridiculously long hours, who are burned out, who are depressed, who have made tons of sacrifices in their lives to make their business successful. Just Google "Costs of entrepreneurship"—it gets ugly.
We accept this as the cost of entrepreneurship, the cost of doing something big—and we fully expect that we'll trade this sacrifice for business profits that will contribute to our life profits years down the road.
What Adii's book and I have long advocated for is simple—we need to revisit how we measure our success as entrepreneurs. That's not so say that we don't care about the profitability of our businesses—I want Outseta to make me a boatload of money. But at the end of the day, those of us who choose to optimize for life profits are going to be the ultimate winners in this game of life. As Adii writes:
"You must put business in its place so your life can take place."
But it was the following sentence that really struck a chord with me:
"Your life is the most important cost of doing business."
Have you ever considered your life as the cost of doing business?
Adii is not the first person to mention that the notion of work / life balance is flawed, but I think it's an important point.
"When we try to make living and working equal and mutually exclusive, we make them enemies of each other, locked in a constant struggle."
The point is not that we need to invest less time in work and more time in our personal lives, the point is that the minute we position these too against each other, as a matter of time allocation, we've created a lose-lose scenario.
It's trendy (and I think correct) for entrepreneurs these days to emphasize that what they're truly after is freedom to do what they want with their time. They want to minimize their obligations and commitments so that can invest more time in the things that they want to do—whatever those are.
That's all well and good, but a huge percentage of the successful entrepreneurs that I know who have achieved freedom with their time end up investing the vast majority of it back into new business ideas. They don't invest their time profits back into creating life profits.
And let's face it—it's very easy to invest more time in your personal life after you've "made it." If you're not doing that and are just continually burning your energy on the entrepreneurial treadmill, that's just driven by ego. What I'm after is for more people—and specifically those that aren't financial set for life—to start investing in life profitability before they flush that much more of their time down the drain. As Adii writes:
"Businesses are ultimately just shells. They're legal entities. They're ideas. There are thousands of ideas. There are thousands of opportunities. A business can respawn. Its ending is therefore survivable, even if painful. You can't respawn yourself. You can't get back life profits you didn't accumulate when you had the chance."
The quote above really sums it up for me—you can always start a new business. You can't start a new life.
Another concept from Adii's book that really resonates with me is the idea that you can be the entrepreneur of your life. Entrepreneurs are a special breed—they take risks, think outside the box, make something out of nothing, see opportunities where others don't. Imagine if you applied all of these same skills to optimizing not just your business, but your life.
Can you look in the mirror and honestly say that you've invested the same amount of time, energy, and passion into building your life as you have into building your company?
"You are becoming an entrepreneur of yourself and this novel product called a full and rich life."
What a wonderful, worthy product to work on. And one important clarification:
"You don't have to give up your entrepreneurial journey. You just need to expand your ambition to include your life lived now."
Another of the key ideas in Life Profitability that I really relate to is the benefits of looking at the world through a lens of abundance. When we're singularly focused on maximizing business profits, we look at the world through a lens of scarcity. There's only so many customers out there—we have to win and someone else has to lose. It's cutthroat, it's competitive, and we find ourselves studying our competitors so we can crush them once and for all. It's also in most instances flat out wrong.
In almost every market, there are more that enough customers to sustain many businesses. Long ago I adopted this mindset when it comes to competitors, and I actively refer business to all of Outseta's main competitors. If one of their products is legitimately a better fit for a potential customer, absolutely no one wins if I try to get that customer to use our product instead. There's more than enough business to go around, and I fundamentally believe that this mindset actually pays off long term. While I may have lost a potential customer, that's very temporary. Ultimately I've earned someone's respect and trust in the process.
And it's not just that viewing the world through a lens of abundance is helpful when it comes how you view competitors—it's helpful with nearly everything you do in life. When you trade out the win / lose mindset and try to create win-win scenarios, that's when the magic happens... both in business and in life.
Now that I've shared all these lovely, flowery ideas I want to share a bit about why Adii's book really landed at the right time for me.
Adii's book turned a mirror on myself as I read it—as I said, investing in life profitability has long been a strength of mine and in many ways that continues to be true. I recently picked up my family and moved to Hawaii, chasing the life profits that came from that experience and all the while working on my start-up. Having the flexibility and freedom to do such things is a big part of the reason that decided to build my own company—and evidence that in many ways Outseta is contributing positively to my life profitability.
But as I reflected on my own entrepreneurial journey, it also became clear that I've created what Adii refers to as a business monster—this living, breathing business that is constantly vying for my attention. Outseta has without question detracted from my life in some ways too.
From a purely financial standpoint, I've earned about 50% of the income that I would have otherwise over the last 5 years. I also haven't had health insurance or the other benefits typically provided by a "normal" employer. This has certainly had trickle down affects on my family and has caused me a lot of stress—particularly through years of a pandemic and when I welcomed twin boys into the world.
Outseta is now paying me a livable salary, but the hard truth is it will still likely be a few more years before I return to making a market salary. We've prioritized other investments in growth as well as ramping up the salary for the rest of our team—in both cases the right things to do for our business. But what Adii's book points out so well is we should always be evaluating all of ways our entrepreneurial journey is contributing to or taking away from our life profits. The long term goal of entrepreneurship is almost always this idyllic view of where you want to end up, but you shouldn't ignore the life costs in terms of what it takes to get there.
Even as Outseta's success has accelerated over the past two years, how we've decided to build the business has presented challenges too. We've purposely bootstrapped a large scale software product into existence, knowing this would require us to play the long game. But even as our customer base has swelled, our team has remained relatively small—again that's by design, but the truth of that decision has left little margin in my life.
I feel very much strapped to my chair day in and day out, with a customer base that needs me and no alternative but to serve them myself. Taking time off has also been hard—when someone on our team does, everyone else on the team feels it acutely. Bootstrapping such a big software product purposefully with a small team and a now sizable customer base just means we have little margin—room to move around comfortably—in our business. That's a very real cost and one that I feel day to day.
Many of the well intentioned decisions that we've made to give us freedom and flexibility in the long term have created a business where we don't have much margin and we do have high degrees of stress. The ultimate irony—and one that Adii points out—is that raising venture capital can actually be a decision that affords entrepreneurs a lot more flexibility and freedom. Sure, you have stress from investors and growth targets that need to be hit—but you also have a larger team to rely on, a cushier salary, and benefits that give you more room to breath in life.
Adii's book was a wonderful reminder to really look at how Outseta has both contributed to but also taken away from my opportunities to maximize my life profits. Which led me to reflect on why I started building Outseta in the first place.
I was lucky to work for a company early in my career that truly prioritized the life profitability of its employees over what the employee could contribute to the business—I knew that the company cared more about Geoff the person, than Geoff the marketer. I asked my boss to work remotely full-time in 2013, clearly chasing life profits (I wanted to move to San Diego). I was ready to walk away from an amazing gig, but I was given the freedom to pursue what was best for my life.
Holy hell that was empowering. And reflecting on my own behavior, it made me work that much harder for the company. Years later, this same company hired me an executive coach, who actually was instrumental in helping me make the decision to leave the company. Again, the company put its money where its mouth was—they truly wanted whatever was best for me!
I've since worked for other companies where it was very clear that they cared about what I could contribute to the business far more that they cared for me, the person. That just sucked the life out of me—my motivation dried up. Reflecting on these experiences through my career I came to an important conclusion:
I fundamentally believe that building a company that focuses on the life profitability of its employees above all else will actually make the business that much more successful!
I believe that in my heart of hearts—and it's point blank my personal mission at Outseta. My primary motivation is to build a company that allows others to chase down the best possible life that they can live. As Adii writes:
"It's time to trade in your philosophy of scarcity for one of abundance to create a business that traffics life profits as its driving force in the world."
I want life profits to be what Outseta contributes to the world above all else—and the cool thing is because of the product space that we're in we can create this opportunity for our own team, but also contribute to the life profitability of our customers. I want everyone that works at Outseta to feel our work environment has given them every opportunity to self-actualize, whatever that means for them.
I know that however successful Outseta becomes, I will always get more joy out of seeing people on our team thrive in their personal lives than I will out of seeing the business itself succeed financially. Adii writes:
"In the case of a life profitable business, the aspiration is self-actualization for you and those associated with the business."
"Setting up your business in a way that allows people to grow, to self-actualize, to be fruitful in meaningful ways while doing the collective work of the business will probably mean a productive business that gets better financial results."
I could not agree more and that's not based on a hunch—it's based on my own behavior.
Say for example you work with a musician who has an amazing opportunity to play a set at a venue they've dreamed of playing at—but it's during "normal" business hours when you already have an important meeting scheduled. If that person wasn't given the freedom to pursue the opportunity—to pursue something that's in every way an expression of themselves—imagine how that would make them feel towards their work!
I guarantee the elated employee who has engaged with life on their terms would be more productive, more insightful in a meeting rescheduled to the following week. I'll take that every single time over the dejected employee, sitting through the meeting while daydreaming about the life opportunity they are missing out on elsewhere.
Life profitability has always been my north star—both for myself, and in terms of the impact that I want Outseta to have in the world. Adii writes:
"Life rewards us with unexpected dividends when we engage with it."
This has always proven true in my experience.
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