4 ms·

I mean sure, if you want to build a lifestyle company, and by the way there's no shame in that. But the dream, and the reason all the coastal co's are in it, i

I mean sure, if you want to build a lifestyle company, and by the way there's no shame in that. But the dream, and the reason all the coastal co's are in it, is to be the next Google or Facebook, or Twitter or Snapchat. You could say an app to get people to come over to your house won't change the world, but people think hey maybe it will grow, or we'll just pivot, and wind up with the next Flickr or Slack, and that's certainly good enough.

vonmoltke 10y ago
Why does every company in this industry need to be either a "lifestyle business" or a Google wannabe? What ever happened to growing a business organically over time, or with non-VC investments?
- kbenson 10y ago
  Because if you're growing organically some VC funded competitor is going to try to grow exponentially, and swallow you up or put you out of business. There's no middle ground because all that looks like to people trying to get a return on their investment is that you aren't trying hard enough. That either means they push you harder, or they fund a competitor if you aren't beholden to them.
  - ryandrake 10y ago
    Not all niches will attract VC funded competitors. There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies. There certainly is a middle ground.
    - kbenson 10y ago
      > There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies. Sure, but that just means that they and their competitors have already grown to the point where the market is saturated, and any further growth they are experiencing is because the market is growing or to the detriment to their competitors. They probably already had an exponential growth period, although it could have been short-lived if the market is small (and if the market is really small, may not have looked like exponential growth at all, and may have just looked like becoming profitable and leveling out). You're right that not all niches will attract VC funded competitors, but I think the number niches that meet that criteria are actually very small, in this industry. There's always someone that thinks they can disrupt it somehow, or market it better to show people the market is actually much bigger than it appears. Keep in mind, the VC funded competitor doesn't have to succeed in it's task of taking over or changing the market to have extremely detrimental effects on companies that aren't working with the same paradigm. Having a market large enough to support a few small companies but not large enough to warrant VC funded competitors that stays that way seems a rarity.
  - MK999 10y ago
    This exact thing happened at my last company, the boss grew it organically, but then some group in NY decided they were going to buy everything, so they bought 10ish companies (including us) and cobbled together a large industry player, which will out compete the small guys.
- GFischer 10y ago
  Theory says you'll be run over by the next VC-funded Facebook in your market, and will have to subsist by being a niche business (better service or catering to certain segments). So, either the next Facebook or lifestyle. Of course, real world is not perfect so there's space for medium-sized businesses, but they're not an economic optimum (they're leaving money on the table either way).
- acchow 10y ago
  There are plenty of those. The media just doesn't report on them.

vonmoltke 10y ago

Why does every company in this industry need to be either a "lifestyle business" or a Google wannabe? What ever happened to growing a business organically over time, or with non-VC investments?

kbenson 10y ago
Because if you're growing organically some VC funded competitor is going to try to grow exponentially, and swallow you up or put you out of business. There's no middle ground because all that looks like to people trying to get a return on their investment is that you aren't trying hard enough. That either means they push you harder, or they fund a competitor if you aren't beholden to them.
- ryandrake 10y ago
  Not all niches will attract VC funded competitors. There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies. There certainly is a middle ground.
  - kbenson 10y ago
    > There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies. Sure, but that just means that they and their competitors have already grown to the point where the market is saturated, and any further growth they are experiencing is because the market is growing or to the detriment to their competitors. They probably already had an exponential growth period, although it could have been short-lived if the market is small (and if the market is really small, may not have looked like exponential growth at all, and may have just looked like becoming profitable and leveling out). You're right that not all niches will attract VC funded competitors, but I think the number niches that meet that criteria are actually very small, in this industry. There's always someone that thinks they can disrupt it somehow, or market it better to show people the market is actually much bigger than it appears. Keep in mind, the VC funded competitor doesn't have to succeed in it's task of taking over or changing the market to have extremely detrimental effects on companies that aren't working with the same paradigm. Having a market large enough to support a few small companies but not large enough to warrant VC funded competitors that stays that way seems a rarity.
- MK999 10y ago
  This exact thing happened at my last company, the boss grew it organically, but then some group in NY decided they were going to buy everything, so they bought 10ish companies (including us) and cobbled together a large industry player, which will out compete the small guys.
GFischer 10y ago
Theory says you'll be run over by the next VC-funded Facebook in your market, and will have to subsist by being a niche business (better service or catering to certain segments). So, either the next Facebook or lifestyle. Of course, real world is not perfect so there's space for medium-sized businesses, but they're not an economic optimum (they're leaving money on the table either way).
acchow 10y ago
There are plenty of those. The media just doesn't report on them.