You are talking about two different things here, which I think it goes to everybody's benefit to learn about.
There are lifestyle businesses and there are VC-backed businesses.
Lifestyle businesses usually operate in safer, more pre-established markets. You can access already existing customer bases and in general the VC and the entrepreneur don't need each other because the entrepreneur can get to some level of revenue that enables him or her to cover operating costs. The VC isn't interested however because the market is already established and the returns and likelihood of you taking over the entire market are quite small. They are called lifestyle businesses because there is less pressure, so you can maintain a life outside of the startup (at least after you have stabilized revenue). Some people enjoy these startups: they are relatively less risk and they allow you to get decent returns. It's akin to starting up a cornershop. Just don't pretend you are starting an empire. fnid: it sounds like you are in such a market.
VC-backed businesses are there because there is a new and potentially huge market to be found and VCs put their cash into these companies so they can move quickly, out-perform competitors, and get a large chunk of that market before it gets too fragmented. Growth explodes because they have found a new market capable of sustaining that growth, not because of some magical entrepreneurial powers.
We should all be happy there are more lifestyle businesses developing on the internet: it means these markets are growing and bringing more people into the fold. But don't trick yourself if you are in such a market that you will be the market leader as you have probably already missed the boat or the market size is too small for you to ever realize massive potential. The smart entrepreneurs and VCs leave quickly to refocus on more promising opportunities once they figure out that something is not as big as they once thought (hint: when people are jumping ship, it is not necessarily because you won).
These two types of businesses are not mutually exclusive.
What's cool and new about the internet is that it is continually getting shook up by new markets. The permutations seem endless.
Comments
You are talking about two different things here, which I think it goes to everybody's benefit to learn about.
There are lifestyle businesses and there are VC-backed businesses.
Lifestyle businesses usually operate in safer, more pre-established markets. You can access already existing customer bases and in general the VC and the entrepreneur don't need each other because the entrepreneur can get to some level of revenue that enables him or her to cover operating costs. The VC isn't interested however because the market is already established and the returns and likelihood of you taking over the entire market are quite small. They are called lifestyle businesses because there is less pressure, so you can maintain a life outside of the startup (at least after you have stabilized revenue). Some people enjoy these startups: they are relatively less risk and they allow you to get decent returns. It's akin to starting up a cornershop. Just don't pretend you are starting an empire. fnid: it sounds like you are in such a market.
VC-backed businesses are there because there is a new and potentially huge market to be found and VCs put their cash into these companies so they can move quickly, out-perform competitors, and get a large chunk of that market before it gets too fragmented. Growth explodes because they have found a new market capable of sustaining that growth, not because of some magical entrepreneurial powers.
We should all be happy there are more lifestyle businesses developing on the internet: it means these markets are growing and bringing more people into the fold. But don't trick yourself if you are in such a market that you will be the market leader as you have probably already missed the boat or the market size is too small for you to ever realize massive potential. The smart entrepreneurs and VCs leave quickly to refocus on more promising opportunities once they figure out that something is not as big as they once thought (hint: when people are jumping ship, it is not necessarily because you won).
These two types of businesses are not mutually exclusive.
What's cool and new about the internet is that it is continually getting shook up by new markets. The permutations seem endless.