Proposal: don't say "lifestyle business", say "smartup"
Startups depend on huge cash infusions for many years before achieving profitability, if ever. Smartups fund themselves almost from day one.
Startups do anything and everything to achieve hypergrowth, which paradoxically leads to tolerating sloppy code that doesn't scale. Smartups plan for steady growth. They get it as right as possible the first time, without getting bogged down with analysis.
Startups often end in face-saving "talent acquisitions". Smartups are closed down when they stop being profitable, but it's okay because nobody lost all that much money.
Startups have a broad variance of outcomes. You could exit with millions or be badly in debt. Smartups look for opportunities where the expected revenue per hour worked is very high.
Startups offer free services and hope to make it back with targeted advertising or premium features. Smartups charge for the service they provide.
Hence, startups need millions of users, elite operations talent, and so on. Smartups are happy to focus on a few thousand people from a bargain ISP.
The main goal of a startup is to generate a perception of momentum among investors or acquirers. The main goal of a smartup is user satisfaction.
Startups are injurious to the founders' personal relationships and health. Smartups require sacrifices like anything else in life, but leave you with greater autonomy than before.
P.S. Michael K. Smith, an early tester at Apple, coined the term "smartup" but he probably didn't mean it the way I want to use it. Danese Cooper mentioned it to me and I just liked the way it sounded.