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Comment by verisimi | Hacker News Reader

> In conversation with venture capitalists, you hear the phrase “lifestyle business”, meaning one that is doing nicely and rewarding the people who run it and which isn’t planning for unbounded growth. The words “lifestyle business” are always, of course, uttered in a voice dripping with contempt.

This makes me wonder what other type of business is there? How do VCs describe their business, what is their aim? Is it to be 'king of the world'? Have more money than god? Have power to control others?

If that's it, lifestyle businesses sound much more human. Who wants to pretend to be god, rather than being oneself?

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The contemptuous phrase ‘lifestyle business’ is just VCs saying the quiet part out loud. You want to run a company that feeds your family and provides some decent stable jobs, indefinitely? You must be a clown, they think.

The other memorably awful/ macho bullshit line I once personally heard when pitching an idea to a young thruster was: “Who gets fired?” by which the guy meant, whose jobs are on the line if you build your business successfully?

Not all games are zero-sum, I had to tell him.

I think maybe it's the case that the VC's biggest competition for top talent and good ideas are from the innovators that they hope to invest in.

If they encourage a thousand lifestyle business bloom, one might turn into a boot-strapped "unicorn" that didn't take their money, so it's in their own interest to make lifestyle businesses seem like a terrible idea.

The more talented people are convinced the only way to start a business is with VC, the higher a value VCs can extract from talented people. If we actually had more socially acceptable options, more folks would have the leverage to walk away from the table and shove the VC's non-competes, non-disclosures, preferred shares and meddling board seats in their face.

Lately I’ve been a bit depressed by startups I respect going down, most of all post.news which was a refined product developed in one and a half years by a moderate-sized team and funded by Scott Galloway and Andreessen Horowitz. The official statement was that it was not growing fast enough to make it as a consumer product:

https://techcrunch.com/2024/04/19/post-news-the-a16z-funded-...

Though I think there could be more to it than that: (1) the full development of that site would have required cooperation from the news industry that isn’t easy to get and (2) I don’t think they got the word out well because despite star-studded founders and investors and my being interested in that sort of thing (to the extent of doing market research and product analysis for that kind of thing) I never heard about it until the last week…. And that’s for a business much more interesting and innovative that the comparable Threads or Bluesky.

From the outside though it seems like 1.5 years is not a lot of time to exhaust the possibilities of growth for a site like that. (As I see it Reddit took more like 3 years for subreddits to become what we know)

On the other hand there are the zombie unicorns.

I have been watching Temu: I saw the ads, I bought what could be most of my halloween costume this year and two rolls of fox stickers (not sure if that was a mistake or a dark pattern) and a dragon figurine. Almost everything was smaller than I expected and afterwards I got a huge volume of irrelevant but seemingly personalized emails. I think they’re a paper tiger: I can be impressed by their advertising spend but they don’t seem like masters of marketing and algorithms to me.

The of course there is Uber and the other ride hailing and food delivery services. Uber has spent over $25 billion on giving subsidized taxi rides and there is no end in sight. Even at American prices, $25 billion could have built a lot of subway or light rail but Uber won’t leave such a legacy. Or if it does it will be breaking the economics of both chain and independent restaurants who have reshaped their businesses around a delivery business for which the economics doesn’t really work.

The strength of VC is it can make it bets like Temu and Uber but that can be very much a finger trap.

It occurs to me that one reason we have such a winner-take-all tech economy might be that VCs don't want anything else to exist.

I think of the $15 billion sale of WhatsApp to Facebook.

On one hand that seems like a great outcome to founders and VCs, but from the viewpoint of Facebook it is like extortion. I suspect Facebook uses every kind of influence it has to suppress the next WhatsApp because they don’t want to be doing that every two years or so, particularly when prices for things like that go up over time and not down.

Ha -- I would be a good candidate customer for post.news, and you've known about it (checks the post above) a week longer than I have :-)

The goal is to make a return on investment. A successful lifestyle business doesn't generally make money for investors, or at least they expect to make more money from moonshot massive growth companies. So VCs will absolutely kill a potential or existing small, sustainable company for a chance at a billion-dollar company, even if the odds are tiny. For the founders, a lifestyle business is generally a better option, a) because it's their effort on the line, and b) because they don't get to make as many bets as the VCs do.

Also VCs and PE do not care long-term beyond the time when they cash out. If you’re building the business, you probably will care longer, especially about what happens to the people you hired and worked with.

See https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

It's OK, when many folks say "venture capitalists" they always utter it in a voice dripping with contempt as well (I certainly do).

"Lifestyle business" is what EVERYONE did back in the day before mega corporations. I come from a long line of shoemakers, tailors, and various artisans. All "lifestyle businesses". I expressed interest in following in their footsteps but my parents had sent me to college and always laughed at the idea of me taking up the family business. They had always felt it was too much of a hard life and as is typical for immigrants "wanted better for me". Ironically, artisanal work is now highly valued and I probably would be making far more money now (and have unbreakable job security) if I had somehow convinced my parents to apprentice me.

I suppose the closest thing to a lifestyle business in tech would be freelance consultants. It's more of a thing for certain people who typically have already spent a career in mega corps or VC-driven start-ups. I can't think of many people who have STARTED as freelancers-- other than some small number of academics.

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