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The bit about "lifestyle business" always being uttered in contempt resonated with me. I always assumed it was just me being overly sensitive to folks expressi

by bunnie 2y ago

The bit about "lifestyle business" always being uttered in contempt resonated with me. I always assumed it was just me being overly sensitive to folks expressing concern over my life choices, urging me to snap out of my "mid-life crisis" and do something "useful" like raise money and scale up, or "apply myself" at famous institutions with "real impact".

verisimi 2y ago
> 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?
- throwaway2562 2y ago
  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.
  - bunnie 2y ago
    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.
    - PaulHoule 2y ago
      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-twitter-alternative-is-shutting-down/ 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.
      - jprete 2y ago
        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.
  - deleted 2y ago
    [deleted]
- 082349872349872 2y ago
  See https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=082349872349872%20venture%20frontier%20risk&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
- rcxdude 2y ago
  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.
  - acdha 2y ago
    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.
- crispyambulance 2y ago
  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.
JimDabell 2y ago
I think lifestyle businesses are great, but if you are building a lifestyle business and meeting with VC firms then you are wasting their time. They can’t invest in you. Their business model is designed to take a large number of risky bets to try to catch a unicorn. If you have a less risky business that isn’t going to take off like a rocket, it might be a great idea and a massive success for you, but it isn’t compatible with their business model at all. You are better off meeting with angel investors who do invest in lifestyle businesses.
- intended 2y ago
  That said - VCs / PE are effectively in the business of outcompeting Lifestyle businesses.
  - mbravorus 2y ago
    Outcompeting? Hell no. Eliminating - sure.
    - brewdad 2y ago
      It's the same thing when the outcome is that they "win".
      - PaulDavisThe1st 2y ago
        It's not. Lifestyle business has benefits B1, B2, B3, and cons C1, C2, C3. VC/PE talks a lot about C1, C2, C3 and promotes its business that also has benefits B1 and B2. Amidst the deceitful noise, people forget about B3 and migrate to the VC/PE backed thing. Lifestyle business folds. Society/people lose B3. This is not out competing. It's just bullshit.
keepamovin 2y ago
Yeah, and lifestyle businesses are not the ones YC will ever fund. Perhaps the contempt should be reserved, if people deem it's needed, for those venture vultures who feel they know the price of everything, but in actuality know the value of nothing.
mrob 2y ago
I'm reminded of what happened to Instant Brands. They made a series of popular electric pressure cookers, but instead of remaining a successful medium-sized business, they took on a lot of debt in an attempt to expand, then went bankrupt when interest rates increased. Previous HN discussion: https://news.ycombinator.com/item?id=36310733 https://news.ycombinator.com/item?id=36310733 It's disappointing to see, because the products were genuinely good.
ghaff 2y ago
I think some of it is that it can be a lifestyle business from the perspective of the owners. For employees it can mean they're getting paid below the market rates at a large company and working at least as hard. That may be a reasonable tradeoff to avoid dealing with big company BS--though possibly dealing with small company BS instead. That may all be a reasonable tradeoff but lifestyle business does get used as a rationale for a lot of things not all of which necessarily benefit employees. (Or maybe lifestyle business just gets used for a lot of things that are only somewhat related.)
geokon 2y ago
Damn. I wouldn't expect that pressure give your rep. Is this from people in the industry, or people outside that don't get it? In all honestly, to me you are one of the few people that come to my mind when I think of someone working on a project that's tangible and with "real impact". Precursor is so out of the box and cyberpunk and outside the confines of what institutions are working on Hope in the future you get the support and validation that you should be getting
- etrautmann 2y ago
  I wasn’t familiar but I assume this is what you’re referring to? https://www.crowdsupply.com/sutajio-kosagi/precursor https://www.crowdsupply.com/sutajio-kosagi/precursor
  - bunnie 2y ago
    Yah, that's it.
- bunnie 2y ago
  I get it from all walks of life -- industry peeps, colleagues, academics, concerned friends and family. I didn't always have a rep -- the first step is the hardest in any journey, and the criticism was just as strong (if not stronger) back then. But, I was also a hardware guy in a software world. I'm stubborn, idealistic, and a rule-breaker, so I didn't fit in to any traditional corporate roles; no boss could manage me. That made it easier to walk out the door. The most bold critics were always VCs -- not ones that I met with because I needed investment or anything, just folks I would run into at conferences or do an odd job for as a mercenary. You'd wrap up the job, and they'd make some quip about how it's a shame I'm wasting my talent in a "lifestyle business" and how I should consider finding some honest work at one of their companies. It was like some sort of weird negging tactic. I eventually learned to shrug it off but really, thought I was the only one who heard that term applied so pejoratively. Thankfully, I had a few lucky breaks, and I'm very happy about where I'm at. However, it helps that I found residence in a place with affordable public health care, a functional pension system, oodles of public housing, and low taxes. No way could I do what I'm doing and also be so chill about my future without a functioning social safety net. Unfortunately, "just move somewhere that suits your needs" is not scalable advice; I wish I had a more practical blueprint for others who want to do a lifestyle business, but I don't.
renewiltord 2y ago
I don't understand why people constantly find contempt and condescension in things that are not good fits. I think emotionally non loaded interactions are possible here. VCs are in the business of risky business. Their objective is to fund businesses that will grow very large or collapse very fast and where there is lots of uncertainty as to which and where money increases the likelihood of the former outcome. That's the thing they do. The mechanism that they typically use is a note that converts to equity when a certain raise condition is met either by the private or public market. Someone who goes to them and offers equity in a profitable business that has no intention to attempt to rocketship or IPO is making a mistake. What exactly do you expect them to do here? Give you money in exchange for incredibly illiquid private stock that doesn't pay out? That sounds like a dumb deal. Only a moron would give you money on terms like that. But that doesn't mean you can't get money. Small business financing is available from banks and the government. And you can do the typical thing of starting successful businesses and selling them off and climbing the ladder. Every day small businesses are sold for values from $1k to tens of millions. They're not valued the same as venture-backed startups because they don't have the same cone of possibility as them. If you're going to a VC to fund a Ford dealership in Golden, CO you have to be an imbecile. Not because starting Ford dealerships is dumb, but because you're going to a basketball coach and asking him to teach you tennis. Entrepreneurial people are rare. So when you go to this coach, and he sees you're athletic, he's more likely to say "Why not basketball?" and give you a hundred reasons you should play basketball. That doesn't mean tennis is a dumb sport. Or even that you wouldn't have a better chance with tennis. It means you went to a basketball coach and he wants you to play basketball because your success is also his. For someone with this guy's reputation, he could easily run the business himself. And it's the same for geohot. He doesn't need venture funding to sell $1 million worth of AI at home devices. It's not contempt from the VC. He's found an athlete, and he knows how to coach basketball. So he wants the athlete to play basketball.
- vinnyvichy 2y ago
  >I think emotionally non loaded interactions are possible here. And proceeds to use emotionally loaded words like "moron" and "imbecile". No, the contempt comes from thinking that their way of living is intellectually(/morally) superior, hence, not a lifestyle. For perception of contempt, that's from not wanting their way of living to be seen as intellectually(/morally) deficient. The very best VCs should be able to keep the contempt hidden, perhaps with profit rationalizations, like you, or moral rationalizations, like a dang, but I understand the curiosity to see if, when we put geohot+bunnie against 2 very equanimous VCs, which team will win the social media battle ;). Especially if we give your fave team a 1-dang handicap
grantc 2y ago
Calling this a lifestyle business seems off. I'd wager for most, these are livelihood businesses; lifestyle sounds more of an affectation. Or, more simply, these are small businesses, full stop. We have a working term for these and many political forces claim to be about the. Then again, many or most political forces accomplish much less than they propose.
anthomtb 2y ago
> "lifestyle business" always being uttered in contempt. This must be correlated with peer group and/or geography. I am in a mountain west city surrounded by skiers, cyclists and climbers. Lifestyle business is never mentioned in contempt, rather as a logical choice to support ones hobbies and outside interests.

by bunnie 2y ago

verisimi 2y ago

> 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?

throwaway2562 2y ago
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.
- bunnie 2y ago
  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.
  - PaulHoule 2y ago
    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-twitter-alternative-is-shutting-down/ 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.
    - jprete 2y ago
      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.
- deleted 2y ago
  [deleted]
082349872349872 2y ago
See https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=082349872349872%20venture%20frontier%20risk&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
rcxdude 2y ago
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.
- acdha 2y ago
  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.
crispyambulance 2y ago
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.

JimDabell 2y ago

I think lifestyle businesses are great, but if you are building a lifestyle business and meeting with VC firms then you are wasting their time. They can’t invest in you. Their business model is designed to take a large number of risky bets to try to catch a unicorn. If you have a less risky business that isn’t going to take off like a rocket, it might be a great idea and a massive success for you, but it isn’t compatible with their business model at all. You are better off meeting with angel investors who do invest in lifestyle businesses.

intended 2y ago
That said - VCs / PE are effectively in the business of outcompeting Lifestyle businesses.
- mbravorus 2y ago
  Outcompeting? Hell no. Eliminating - sure.
  - brewdad 2y ago
    It's the same thing when the outcome is that they "win".
    - PaulDavisThe1st 2y ago
      It's not. Lifestyle business has benefits B1, B2, B3, and cons C1, C2, C3. VC/PE talks a lot about C1, C2, C3 and promotes its business that also has benefits B1 and B2. Amidst the deceitful noise, people forget about B3 and migrate to the VC/PE backed thing. Lifestyle business folds. Society/people lose B3. This is not out competing. It's just bullshit.

keepamovin 2y ago

Yeah, and lifestyle businesses are not the ones YC will ever fund. Perhaps the contempt should be reserved, if people deem it's needed, for those venture vultures who feel they know the price of everything, but in actuality know the value of nothing.

mrob 2y ago

I'm reminded of what happened to Instant Brands. They made a series of popular electric pressure cookers, but instead of remaining a successful medium-sized business, they took on a lot of debt in an attempt to expand, then went bankrupt when interest rates increased. Previous HN discussion: https://news.ycombinator.com/item?id=36310733 https://news.ycombinator.com/item?id=36310733 It's disappointing to see, because the products were genuinely good.

ghaff 2y ago

I think some of it is that it can be a lifestyle business from the perspective of the owners. For employees it can mean they're getting paid below the market rates at a large company and working at least as hard. That may be a reasonable tradeoff to avoid dealing with big company BS--though possibly dealing with small company BS instead. That may all be a reasonable tradeoff but lifestyle business does get used as a rationale for a lot of things not all of which necessarily benefit employees. (Or maybe lifestyle business just gets used for a lot of things that are only somewhat related.)

geokon 2y ago

Damn. I wouldn't expect that pressure give your rep. Is this from people in the industry, or people outside that don't get it? In all honestly, to me you are one of the few people that come to my mind when I think of someone working on a project that's tangible and with "real impact". Precursor is so out of the box and cyberpunk and outside the confines of what institutions are working on Hope in the future you get the support and validation that you should be getting

etrautmann 2y ago
I wasn’t familiar but I assume this is what you’re referring to? https://www.crowdsupply.com/sutajio-kosagi/precursor https://www.crowdsupply.com/sutajio-kosagi/precursor
- bunnie 2y ago
  Yah, that's it.
bunnie 2y ago
I get it from all walks of life -- industry peeps, colleagues, academics, concerned friends and family. I didn't always have a rep -- the first step is the hardest in any journey, and the criticism was just as strong (if not stronger) back then. But, I was also a hardware guy in a software world. I'm stubborn, idealistic, and a rule-breaker, so I didn't fit in to any traditional corporate roles; no boss could manage me. That made it easier to walk out the door. The most bold critics were always VCs -- not ones that I met with because I needed investment or anything, just folks I would run into at conferences or do an odd job for as a mercenary. You'd wrap up the job, and they'd make some quip about how it's a shame I'm wasting my talent in a "lifestyle business" and how I should consider finding some honest work at one of their companies. It was like some sort of weird negging tactic. I eventually learned to shrug it off but really, thought I was the only one who heard that term applied so pejoratively. Thankfully, I had a few lucky breaks, and I'm very happy about where I'm at. However, it helps that I found residence in a place with affordable public health care, a functional pension system, oodles of public housing, and low taxes. No way could I do what I'm doing and also be so chill about my future without a functioning social safety net. Unfortunately, "just move somewhere that suits your needs" is not scalable advice; I wish I had a more practical blueprint for others who want to do a lifestyle business, but I don't.

renewiltord 2y ago

I don't understand why people constantly find contempt and condescension in things that are not good fits. I think emotionally non loaded interactions are possible here. VCs are in the business of risky business. Their objective is to fund businesses that will grow very large or collapse very fast and where there is lots of uncertainty as to which and where money increases the likelihood of the former outcome. That's the thing they do. The mechanism that they typically use is a note that converts to equity when a certain raise condition is met either by the private or public market. Someone who goes to them and offers equity in a profitable business that has no intention to attempt to rocketship or IPO is making a mistake. What exactly do you expect them to do here? Give you money in exchange for incredibly illiquid private stock that doesn't pay out? That sounds like a dumb deal. Only a moron would give you money on terms like that. But that doesn't mean you can't get money. Small business financing is available from banks and the government. And you can do the typical thing of starting successful businesses and selling them off and climbing the ladder. Every day small businesses are sold for values from $1k to tens of millions. They're not valued the same as venture-backed startups because they don't have the same cone of possibility as them. If you're going to a VC to fund a Ford dealership in Golden, CO you have to be an imbecile. Not because starting Ford dealerships is dumb, but because you're going to a basketball coach and asking him to teach you tennis. Entrepreneurial people are rare. So when you go to this coach, and he sees you're athletic, he's more likely to say "Why not basketball?" and give you a hundred reasons you should play basketball. That doesn't mean tennis is a dumb sport. Or even that you wouldn't have a better chance with tennis. It means you went to a basketball coach and he wants you to play basketball because your success is also his. For someone with this guy's reputation, he could easily run the business himself. And it's the same for geohot. He doesn't need venture funding to sell $1 million worth of AI at home devices. It's not contempt from the VC. He's found an athlete, and he knows how to coach basketball. So he wants the athlete to play basketball.

vinnyvichy 2y ago
>I think emotionally non loaded interactions are possible here. And proceeds to use emotionally loaded words like "moron" and "imbecile". No, the contempt comes from thinking that their way of living is intellectually(/morally) superior, hence, not a lifestyle. For perception of contempt, that's from not wanting their way of living to be seen as intellectually(/morally) deficient. The very best VCs should be able to keep the contempt hidden, perhaps with profit rationalizations, like you, or moral rationalizations, like a dang, but I understand the curiosity to see if, when we put geohot+bunnie against 2 very equanimous VCs, which team will win the social media battle ;). Especially if we give your fave team a 1-dang handicap

grantc 2y ago

Calling this a lifestyle business seems off. I'd wager for most, these are livelihood businesses; lifestyle sounds more of an affectation. Or, more simply, these are small businesses, full stop. We have a working term for these and many political forces claim to be about the. Then again, many or most political forces accomplish much less than they propose.

anthomtb 2y ago

> "lifestyle business" always being uttered in contempt. This must be correlated with peer group and/or geography. I am in a mountain west city surrounded by skiers, cyclists and climbers. Lifestyle business is never mentioned in contempt, rather as a logical choice to support ones hobbies and outside interests.