>If you go to a more "boring" market that competitors ignore
An example in the form of a digression: I live in a town in a relatively rural area of the SF peninsula. I've recently received some bids for a small job involving heavy machinery, and -- at least in this area -- suspect that owning your own business in that "boring" market provides a more reliable source of revenue with a better quality of life than 95% of HN readers who work in cubicles at tech companies.
Owner A is a fellow who owns a bay area company that does grading work. He built his own house in the Woodside flatlands, where land costs tend to run in the millions of dollars, and the construction cost including permits of building a new house may be $2M-$3M alone. Neighbors include Larry Ellison and the Steve Jobs ex-Jackling estate. It's true he's driving around a lot for bids, but many folks would prefer that to staring at a screen. It's probably psychologically and physically healthier as well.
Owner B is a fellow who owns a bay area company that does excavation and sewer work. He owns a house in Portola Valley (another affluent community, for instance home to VC Vinod Khosla, who hosted Obama recently) and a second home in the Sierra foothills. Has a stable of Porsches and eight motorcycles. Is a pillar of the community, and sends his crew out to open roads closed by storms or downed trees when the town or fire department can't get to them quickly enough.
They may miss out on the upsides of billion-dollar IPOs, but a precious small percentage of startup founders or employees will get those anyway, especially post-Sarbanes-Oxley. I'm not saying I'm going to quit
http://recent.io/ to dig septic tanks, but it does put bay area quality of life in perspective.
One company of the same ilk I'm familiar with is a certain tree-cutting company in that area (I'm sure you know which one I'm talking about). They make fantastic money and have a virtual monopoly on the cyclical need of homeowners in the area for trimming branches of the towering trees in their yards, so that high winds will not knock them down onto their homes. Each homeowner needs to spend a few thousand dollars every 3 years or so for this service.
However, this family business has been in existence for 60+ years. I don't think that starting a new tree cutting business and going head to head with them will be nearly as profitable if at all, because you wouldn't have the same contacts and good will that they do. Contract work is often a word of mouth and referral business, not dissimilar to the legal world.
I totally agree that such small business owners can make great money. I recall from The Millionaire Next Door that many of the "millionaires" profiled in that book have the unsexiest businesses that they'd been working hard at for decades, saving wisely. I do know of an electrical contractor that worked on our house a couple of years ago has a healthy, very profitable business going on. But I think there's more than what immediately meets the eye, and just going into an unsexy business for the sake of going into an unsexy business is not a sufficient condition for financial success in one's business.
But I think there's more than what immediately meets the
eye, and just going into an unsexy business for the sake
of going into an unsexy business is not a sufficient
condition for financial success in one's business.
Warren Buffet built his fortune on top of Potato Chips, Dumpsters, and Trailer Parks.
I agree that there is "more" to this than just going into something unsexy. But a key part of business success is differentiating yourself from the competition.
If you have no competition, then you win by default. Finding unsexy jobs that need to be done (ie: Payroll) gets you customers.
Ah, yes! I know the company you're talking about. They come up regularly in neighborhood recommendations, although with the caveat that they're more expensive than most.
I think routine tree removal and trimming around here is kind of cutthroat -- which I've used to my advantage when getting bids. But, on the other hand, who would trust the lowest bidder to take care of your Prized Live Oak That Is The Centerpiece Of Your Old Palo Alto Backyard?
Luckily they lowered their rates dramatically during 2008 for obvious reasons, and I think we managed to get them to match that daily rate again in 2012 :P
An example in the form of a digression: I live in a town in a relatively rural area of the SF peninsula. I've recently received some bids for a small job involving heavy machinery, and -- at least in this area -- suspect that owning your own business in that "boring" market provides a more reliable source of revenue with a better quality of life than 95% of HN readers who work in cubicles at tech companies.
Owner A is a fellow who owns a bay area company that does grading work. He built his own house in the Woodside flatlands, where land costs tend to run in the millions of dollars, and the construction cost including permits of building a new house may be $2M-$3M alone. Neighbors include Larry Ellison and the Steve Jobs ex-Jackling estate. It's true he's driving around a lot for bids, but many folks would prefer that to staring at a screen. It's probably psychologically and physically healthier as well.
Owner B is a fellow who owns a bay area company that does excavation and sewer work. He owns a house in Portola Valley (another affluent community, for instance home to VC Vinod Khosla, who hosted Obama recently) and a second home in the Sierra foothills. Has a stable of Porsches and eight motorcycles. Is a pillar of the community, and sends his crew out to open roads closed by storms or downed trees when the town or fire department can't get to them quickly enough.
They may miss out on the upsides of billion-dollar IPOs, but a precious small percentage of startup founders or employees will get those anyway, especially post-Sarbanes-Oxley. I'm not saying I'm going to quit http://recent.io/ to dig septic tanks, but it does put bay area quality of life in perspective.