That model works if there are economies of scale. Say that your one dollar cost at one million users is $0.80 fixed costs and $0.20 incremental cost. Adding mo

That model works if there are economies of scale. Say that your one dollar cost at one million users is $0.80 fixed costs and $0.20 incremental cost. Adding more users will eventually make the model profitable, and this is how Facebook works, for example.