Growth startup v/s lifestyle startup: why should there be a difference at all?

Again and again, people try to distinguish between two kinds of startups: growth and lifestyle. Broadly speaking, here’s how people categorize these startups:

Growth Startup

  • Raises VC or angel capital
  • Aggressive hockey-stick like growth
  • Laser focused on an “exit-event” (acquisition, IPO, etc.)
  • Focus on revenue (not profits) or other growth metrics

Lifestyle Startup

  • Bootstrapped of Self-funded
  • Slow growth or no growth at all
  • No exit strategy per se as the business is part of founders’ lifestyles
  • Focus on profits at all times (as they don’t have external capital)

With Visual Website Optimizer, many people have asked me to clarify whether it’s a growth business or a lifestyle business. I’m always baffled with this question because these two categories seem narrow and I don’t see my startup getting pigeon-holed into one of them. It is true that we haven’t yet raised any VC or angel funding. But does it really disqualify us from being a growth business? What if I tell you that our revenues (and profits) have been growing by 10-15% every month. We are actively hiring but we’re not in a rush to expand the team aggressively (sacrificing quality). We’re happy with the slow but quality growth in team and product features. Does it make us a lifestyle business? ...  Read the entire post →