Great post from the personal blog of James Hong, founder of HotOrNot.com
For the first 3.5 years, it was Jim and I working about 10 hours a week each, with the company earning many millions of dollars per year.
Then 2 things changed, and we realized we had to change with them:
1) Startup economics improved, making it harder to keep good people
2) The Online Advertising Market improved, making free competitors a reality
Organic growth. Community based. Growth. Fun