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>It can never settle into a steady, viable state where it just does its job. I agree with your argument that numerically, playing the odds make sense, but I do

>It can never settle into a steady, viable state where it just does its job. I agree with your argument that numerically, playing the odds make sense, but I don't see how this necessarily rules out the possibility of settling into a steady business if that's what the company's owner(s) want. Especially with the backlash/burnout from VC demands, it seems to me like there would be plenty of business owners who would prefer the stabler "lifestyle business" over the moonshot because for emotional reasons, they prefer to leave potential money on the table in exchange for stability.

netcan 7y ago
It doesn't rule it out in any particular case. It just makes it rarer in the population, so to speak. Sure, people can make whatever choices they want and wants vary. However, people make the economic choices on average. If these are individual people making choices, then we get a distribution of choices. Mostly these are companies though, collections of people making a common choice. Shareholders are not going to divide up their $1.5m dividend and chill when there's a $150m offer on the table. We barely even have the financial institutions to do that. "Lifestyle Businesses" are also not always peaches and cream. Say meetup is resold cheap because no-one can meet up irl anymore. You buy it and you are now the "Lifestyle CEO" of meetup. You have the inglorious & immediate task of downsizing all the VC/WeWork fat the company is carrying. Or, you could raise money and "grow into" your expenses. So, either you are raising money again and not a lifestyle company anymore or you are making deep cuts. Walking back to a "lifestyle Businesses" from this position is not a choice that gets made often, unless there's no choice. Finally, startups exist within startup business culture... meetup certainly. Giving up an growth is equivalent to failure. Successful companies grow fast, everyone gets promoted. Options convert. That's the culture.
killerstorm 7y ago
If company already got money from VCs to develop the product they don't have a choice, usually
jgust 7y ago
> plenty of business owners who would prefer the stabler "lifestyle business" Is there an opportunity for a new VC or hedge fund to come through and suck up already profitable businesses and ween technology companies off this "hockey stick growth" mentality?

netcan 7y ago

It doesn't rule it out in any particular case. It just makes it rarer in the population, so to speak. Sure, people can make whatever choices they want and wants vary. However, people make the economic choices on average. If these are individual people making choices, then we get a distribution of choices. Mostly these are companies though, collections of people making a common choice. Shareholders are not going to divide up their $1.5m dividend and chill when there's a $150m offer on the table. We barely even have the financial institutions to do that. "Lifestyle Businesses" are also not always peaches and cream. Say meetup is resold cheap because no-one can meet up irl anymore. You buy it and you are now the "Lifestyle CEO" of meetup. You have the inglorious & immediate task of downsizing all the VC/WeWork fat the company is carrying. Or, you could raise money and "grow into" your expenses. So, either you are raising money again and not a lifestyle company anymore or you are making deep cuts. Walking back to a "lifestyle Businesses" from this position is not a choice that gets made often, unless there's no choice. Finally, startups exist within startup business culture... meetup certainly. Giving up an growth is equivalent to failure. Successful companies grow fast, everyone gets promoted. Options convert. That's the culture.

killerstorm 7y ago

If company already got money from VCs to develop the product they don't have a choice, usually

jgust 7y ago

> plenty of business owners who would prefer the stabler "lifestyle business" Is there an opportunity for a new VC or hedge fund to come through and suck up already profitable businesses and ween technology companies off this "hockey stick growth" mentality?