Conversation

What do you call a startup that never grows up? A Peter Pan startup? A lifestyle business is one kind of Peter Pan startup?
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Seems to me a lifestyle business is different from an ordinary small business in a specific way: unlike a small business it innovates, but unlike a tech startup it deliberately ensures it innovates in a subcritical way, so it is not forced to grow/scale by a network effect.
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A true small business like a bakery is naturally self-regulating in size. Unless you do something dumb like offering a bad Groupon, the length of the queue out the door will limit the demand. It’s connecting to the internet that creates potential for possibly unwanted growth.
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For say a downloadable software product (not SaaS) if you get way more users than you can profitably serve due to human-in-loop bottleneck, releasing a defeatured open-source version with explicitly downgraded SLAs is almost a steam pressure release valve.
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You could also say that a traditional small business is naturally self-regulating because of geographic constraints. Whereas most lifestyle businesses are regulated by TAM constraints based on where they are in the "long tail"
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You can choose to try and overcome these constraints in either case. E.g. Starbucks was constrained by queue size so opened more stores. Lifestyle businesses can make similar choices if it turns out the market they are in is growing very quickly.
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