This bug drove me batty until I found this. Making a Nextcloud appliance with 
Ubuntu Server 16.04 as the OS and I couldn't install a gui. Tried xfce, lxde, 
and lxqt to no avail. Re-installed, tried again, and nothing.
Post #14 worked for me but a little different.

startxfce4 -- :1 vt1

Is the proper command to launch xfce once logged on.

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https://bugs.launchpad.net/bugs/1562219

Title:
  Unprivileged xinit wont start in unallocated vt

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