[nxb]

What's missing from this argument is that opportunities to make ongoing profit without considerable ongoing investments tend to be VERY short lived in the tech field. Assuming that steady revenue will last, will lead you to ending up crashing as hard as Atari.

You grew a steady, low-stress $1MM/year lifestyle business? Great. Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are. Software is rarely like the e.g. restaurant business, where you can own a scarce piece of property in a good location and don't have to compete with the whole world, or other defendable advantages. Tech startups tend to have far fewer defendable advantages.

Once you realize this, it becomes obvious that "grow or die" is the nature of the business. Not some silly scheme that only exists due to VCs forcing it upon entrepreneurs.

Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field.

On top of that, guess which type of businesses are, by far, the most attractive to cloners and other competition? - those "ideal" lifestyle businesses that make profits from early on and require minimal upfront investment.

Edit: Or instead of Atari, insert here all the other profitable businesses that you've never heard of, who got crushed after a couple years because they slowed their investments into innovating, assuming that their very steady profits would continue instead of dropping off a cliff. Happened to me twice.

[lipstick]

>> Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field.

I used to buy that. Then I started looking around:

1) What's McAfee today that it wasn't 30 years ago? 2) Windows 10 is a slightly newer look with small WinRT runtime (which may have come from WinCE I don't know) but most of the software underneath is the same code running for over 2 decades as it looks to my eyes. 3) SereneScreen fish screensaver, has it changed much? 4) How many years has Skype been around?

Put some lipstick on the pig and if it ever sold at all, software is renewable.

Also your restaurant analogy isn't really fair, it takes a lot of work every day to keep a popular restaurant popular regardless of location.

>> Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are.

Linux is better than Windows yet what runs on most desktops? OS/2 was far, far better than Windows yet Windows is still on desktops because IBM stopped selling OS/2 (and PC's for that matter); not because people would not still be buying it but because they are more interested in selling mainframes (which were supposed to be dead by now).

[kuschku]

This is exactly the thing. Focus on one thing, do it better than anyone, constantly make the best product, and you’ll keep your market for a long time.

(Well, you don’t need to be the best, just very good).

[bisRepetita]

>Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field.

But that's the idea that not everything is a startup. If the addressable market is $10M and you get a good chunk of it already, there's a lot less motivation from anyone to compete with you. And they probably have no clue your market even exists.

And yes, most SMB require more than "minimal efforts", but normal efforts. Much less than building a unicorn. And in many cases a great flexibility and quality of life.

[furyg3]

I think the Atari argument reinforces the point of the article.

Atari went from nothing to a household name, something a lot of people had and loved, was sold to Warner Comms for millions of dollars making the founders rich, and became 30% of Warner Communications' income within 10 years of being founded. That sounds much like the meteoric rise of a hot-new-thing 'successful' startup (e.g. Myspace) that lost out to a competitor (e.g. Facebook/Nintendo) than a niche 'lifestyle' company that didn't innovate.

Had they been working on, I don't know, restaurant POS machines maybe they would have been much less known but made that same amount of money over 20 years before some competitor bested them. And what the article is saying is that's also not bad.

[nine_k]

Not necessarily grow or die; you can try to build a number of $10M/y businesses instead of growing one to $1B/y one. I won't hazard to guess which approach is harder.

[sharemywin]

I think anything with network effects has better defensible advantages. And none of the big companies or VCs are going to go after you.