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Topic: In other news ...

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847badgerfan

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Re: In other news ...
« Reply #23366 on: May 08, 2023, 02:00:28 PM »
It's hard to fix something when half the country doesn't recognize there's a problem.  Let's hand out mirrors.
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betarhoalphadelta

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Re: In other news ...
« Reply #23367 on: May 08, 2023, 02:01:43 PM »
I think "lifestyle" businesses (I like that term) are structured so much different because there are not that many capital costs to get into it.  No expensive construction equipment, low office costs such as officing out of your home, only a handful of employees. 

As somebody who is currently scaling up I can definitely attest I fall into 847's category #2, except I hope to pass it on to my kids (they will have to buy me out in some form, albeit cheaper than the market would get). 
Yeah, and to an extent the term can be wider. 

I first came across it as a term used to denigrate a business. It was when I was working for a startup that obviously had investors, and the investors had the typical [tech] startup exit strategy that was either IPO or get acquired. Whereas other businesses in the sector basically said: "We have a certain addressable market, we have a business plan that makes us competitive, and we desire to service that market. It's not a robust growth market, so we'll work to keep a defendable market share and a good enough gross margin to pay our owners and our employees." The very IPO/startup minded folks looked at something like a "lifestyle business" as more of a "dead end" business, because it might keep you employed but it'll never make you wildly rich.

That said, these businesses weren't little mom&pop work from home deals. And in many ways, neither is a brewery. It might cost a couple hundred thousand to really get set up to run a small neighborhood brewery. 

The difference is that in brewing, someone who wants to scale and expand gets investors. To lure investors you need an exit strategy for them to get their investment back plus enough profit to justify the risk of investment. If you're looking at brewing as a lifestyle business, you get a loan. To secure a loan you just need a viable business plan that shows you're going to be able to earn enough money to pay back the loan and remain a viable business beyond your loan servicing cost, and collateral for the bank to seize if you screw up too badly. 

betarhoalphadelta

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Re: In other news ...
« Reply #23368 on: May 08, 2023, 02:09:56 PM »
Why do car companies create off-shoot brands?  Why is the chip and cookie aisle produced by like 4 companies?  Yes, there's word for it, but oligopolies that communicate with each other are a virtual monopoly. 

I know, I know, they'd never do anything to screw the consumer or break the law.
Why are there so many packaging options? Is it because people want that many packaging options, or is it because certain brands want to crowd others off the shelves? 

I'd argue it's the latter. Again, with beer. Do you really need 6/12/18/24/30 pack cans AND 6/12/18/24 pack bottles of Bud Light? No. I don't think there's consumer demand for so many packaging options. But if you're Bud Light and you have enough market power, you can demand that grocery stores stock ALL of your packaging sizes in order to have access to any of them, and then you take up enough shelf space that it crowds out competition.

Same thing with chips and cookies. The more you offer, the more space it takes, and the less space is there for others.

It's screwing the consumer and fully legal to do. 

And yet, they're still losing market share

Until Kroger makes it illegal for you to go to Trader Joe's or Mothers Market or Smart & Final or Walmart or Whole Foods or any number of other places who offer you wider oprtions for your beer/chips/cookies consumption, I fail to see the problem here. 

bayareabadger

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Re: In other news ...
« Reply #23369 on: May 08, 2023, 02:13:43 PM »
They partnered with some transgender “ IT” in an ad campaign. It did not go well.
Got sucked up into the culture war jet engine something fierce. A little like the cancel culture mess of yesteryear. 

Gigem

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Re: In other news ...
« Reply #23370 on: May 08, 2023, 02:35:10 PM »
I’d wager that almost every business starts off as a lifestyle business. Apple, HP, all sorts of sizes and flavors started in a garage and grew from there. Some of the newer biz gets funded by VC, so they scale up quickly. I won’t pretend to understand how that works. 

As someone who is in the middle of going from a part timer with limited ability to fill time with full ability I’m facing the same criticisms. But I’m winning jobs, doing good work. 

betarhoalphadelta

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Re: In other news ...
« Reply #23371 on: May 08, 2023, 02:55:41 PM »
I’d wager that almost every business starts off as a lifestyle business. Apple, HP, all sorts of sizes and flavors started in a garage and grew from there. Some of the newer biz gets funded by VC, so they scale up quickly. I won’t pretend to understand how that works.
Bear in mind that I've never started a startup nor tried to secure VC funding, but here is my general idea of how it works in tech... 

  • People come up with an idea. Typically it's an idea that they believe to be revolutionary or to be so amazing that it will take the entire world by storm. These are tech types who already know their industry and have some credibility in that industry, so it's not like they're complete unknowns. 
  • They convince an "angel investor" to stake them. These are the very earliest of investments, very risky, and usually just enough money to get them off the ground. The business needs seed money to open, and the founders and early employees need income because the startup probably doesn't have any path to generate revenue this early. The payoff for an angel investor is equity in the company, so if it explodes, a small investment can have a massive payoff. 
  • They start working on trying to make the idea a reality. Usually this will have various proof of concept points to show that the claims they made about their idea actually looking like they might come true and become a viable product. That said, they probably still haven't sold anything, and don't have anything at a stage that they could sell. If they're failing to meet those PoC targets, then they disappear and go back and get real jobs (or form another startup with a new idea).  
  • At this stage they start looking into more traditional VC funding to start scaling up. Unlike the angels, these are bigger funding rounds. They're still risky, but because the initial proof of concept work has been promising there's enough "meat" there to justify the larger investments. 
  • These later investments are often denoted by series based on how far they in and how much money they need, i.e. Series A will be when the idea is still in its toddler stage, they might need Series B when it's in its pre-teen phase, and might need to go back again for Series C in order to actually hit market. That said, some companies may actually be earning revenue but aren't profitable, and need the later series to scale up past the break-even point. 
  • During the series funding you may hit a point where acquisition looks promising. This is often when a company has intellectual property that's very valuable but it no longer looks like there's a business plan that will allow them to exploit it. In this case the investors may sell to a larger company that wants the IP, knowing they're getting SOME return on their investment but not what they hoped for. 
  • If the business gets to a truly successful, then the investors start looking to execute the exit strategy. In some cases this can be an IPO, in some cases this can be an acquisition. 

I don't think a lot of tech "startups" are meant to be lifestyle businesses if someone's trying to engage VC. Usually they need VC because the path to revenue can be years-long, and sometimes the path to profitability even longer. 


longhorn320

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Re: In other news ...
« Reply #23372 on: May 08, 2023, 03:03:24 PM »
Got sucked up into the culture war jet engine something fierce. A little like the cancel culture mess of yesteryear.
Disney is the king (or maybe I should say queen) of this
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847badgerfan

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Re: In other news ...
« Reply #23373 on: May 08, 2023, 04:01:38 PM »
In my case, there were no investors. I saved up enough money to go without a paycheck for 2 years and started in 2001. Turns out it was only 6 months without a check, and with the remaining savings I invested more into the business to expand (buy equipment and hire people). The work was coming in, so it made sense.

Then we got 2008-ed. It was really starting over at that point as the company wasn't strong enough to weather that kind of storm yet. I think it is now, 15 years later.
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Gigem

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Re: In other news ...
« Reply #23374 on: May 08, 2023, 04:32:44 PM »
I’ve been working my business since 2010. Mostly me, and then when my sons got older they would help. I pocketed cash jobs, everything else went back into the business. Working a regular job I didn’t need the income. I bought some trucks, built a shop, tools, equipment. Last year I hired my first employee, then another. Next year will be tough, because we’re buying an expensive piece of equipment and we need jobs to pay for it. Up until this year I could keep my workload low and still do ok, as my overhead was quite low. 

bayareabadger

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Re: In other news ...
« Reply #23375 on: May 08, 2023, 04:43:52 PM »
Disney is the king (or maybe I should say queen) of this
Possibly, though slightly different mechanics. 

Gigem

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Gigem

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Re: In other news ...
« Reply #23377 on: May 08, 2023, 06:29:56 PM »
Interesting story. 

MrNubbz

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Re: In other news ...
« Reply #23378 on: May 08, 2023, 07:14:40 PM »
I'd argue it's the latter. Again, with beer. Do you really need 6/12/18/24/30 pack cans 
Yes,yes we do 30 pks,not because I'm afflicted with the thirst.But we'll be back eventually so why bother waisting trips so save gas/time/money better for the environment to
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betarhoalphadelta

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Re: In other news ...
« Reply #23379 on: May 08, 2023, 07:29:16 PM »
Yes,yes we do 30 pks,not because I'm afflicted with the thirst.But we'll be back eventually so why bother waisting trips so save gas/time/money better for the environment to

Well, with proper planning, you can work around this. Buy (2) 24 packs less often and you're good to go. Beer doesn't last forever in a can, but it lasts plenty long to sit in your fridge an extra week. 

But again, the point isn't actually the maximum packaging of 30 (and wasn't there a 36-can deal on the market way back when?)... The idea is that they want to make as many possible packaging configurations as possible, force the grocery store to carry ALL of them, and then that not only crowds out the room for competitors on the shelves, but it also makes the Bud Light (and Miller Lite and Coors Light) sections of the aisle much larger, much more prominent, and puts "Bud Light" front and center in your cranium. On top of crowding out competitors, it ALSO is a low-key form of advertising. 

That said, even with all this, they're still losing. Because consumers are slowly moving towards beer that tastes like actual beer. 

As the old one goes...

Q: What does American light beer have in common with sex in a canoe?
A: They're both f*****g close to water. 

 

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