4 ms·

And yet, $300M is only 1.25M subscribers at the current $20/mo rate. If we say that they need a $1B / year to be comfortably profitable, that's ~4.2M subscriber

And yet, $300M is only 1.25M subscribers at the current $20/mo rate. If we say that they need a $1B / year to be comfortably profitable, that's ~4.2M subscribers. A good rule of thumb is that you can hope to convert about 10% of your free user base to paid; one random source says they have 100M monthly active users - which at 10% conversion, is $2.4B / year. I think they'll be fine.

illiarian 3y ago
How much money will they spend servicing requests for those 4.2M subscribers?
ZephyrBlu 3y ago
10% is insanely high conversion for B2C freemium. It’s closer to 1% for most products.
- anonylizard 3y ago
  Does GPT-4 look like 'most products'? You are talking about a revolutionary product that literally dominates mindshare from consumers to students to CEOs to governments. Its a pure monopoly that has insanely wide utility and instantly obvious value proposition.
  - ZephyrBlu 3y ago
    Do you know anything about B2C freemium products? 10% conversion over 10s-100s of millions of users is literally insane. It doesn't matter how revolutionary GPT-4 is, people's willingness to pay for anything is generally very low. ChatGPT premium is also a very expensive subscription for a consumer product!
    - anonylizard 3y ago
      People are willing to pay $10k a year for college, very high conversion rate. People are willing to pay for tutoring, at rate that's probably about 10% of student base, despite its very high costs ($50/h, not $20/m) At the very minimum, I can already see every university and high school student paying for GPT-4. Its a way way way more powerful essay writer and personal tutor than GPT3.5, that alone is incentive to upgrade. For only $20 a month. Know what GPT-4 currently is insanely capacity limited. So far, the limitation is not on the demand side, but the supply side. Getting 100 million users in 3 months with 0 marketing or network effects already annihilates existing records, getting 10% conversion is nothing special.
      - iudqnolq 3y ago
        The cheating sites I see on the first page of Google seem to charge around $10-$30/page. GPT is cheaper, but lower quality. I don't think the market for tens of dollars cheaper but shittier quality than buyessayfriend.com is anywhere near every highschool and college student.
      - ZephyrBlu 3y ago
        You could have saved yourself and everyone else the time by instead writing “I have no idea what I’m talking about and I don’t understand constraints”. https://twitter.com/visakanv/status/1113154447050334208 https://twitter.com/visakanv/status/1113154447050334208
  - mda 3y ago
    Look what happened to image generators, no one talks about Dall-e or whatever that was.

illiarian 3y ago

How much money will they spend servicing requests for those 4.2M subscribers?

ZephyrBlu 3y ago

10% is insanely high conversion for B2C freemium. It’s closer to 1% for most products.

anonylizard 3y ago
Does GPT-4 look like 'most products'? You are talking about a revolutionary product that literally dominates mindshare from consumers to students to CEOs to governments. Its a pure monopoly that has insanely wide utility and instantly obvious value proposition.
- ZephyrBlu 3y ago
  Do you know anything about B2C freemium products? 10% conversion over 10s-100s of millions of users is literally insane. It doesn't matter how revolutionary GPT-4 is, people's willingness to pay for anything is generally very low. ChatGPT premium is also a very expensive subscription for a consumer product!
  - anonylizard 3y ago
    People are willing to pay $10k a year for college, very high conversion rate. People are willing to pay for tutoring, at rate that's probably about 10% of student base, despite its very high costs ($50/h, not $20/m) At the very minimum, I can already see every university and high school student paying for GPT-4. Its a way way way more powerful essay writer and personal tutor than GPT3.5, that alone is incentive to upgrade. For only $20 a month. Know what GPT-4 currently is insanely capacity limited. So far, the limitation is not on the demand side, but the supply side. Getting 100 million users in 3 months with 0 marketing or network effects already annihilates existing records, getting 10% conversion is nothing special.
    - iudqnolq 3y ago
      The cheating sites I see on the first page of Google seem to charge around $10-$30/page. GPT is cheaper, but lower quality. I don't think the market for tens of dollars cheaper but shittier quality than buyessayfriend.com is anywhere near every highschool and college student.
    - ZephyrBlu 3y ago
      You could have saved yourself and everyone else the time by instead writing “I have no idea what I’m talking about and I don’t understand constraints”. https://twitter.com/visakanv/status/1113154447050334208 https://twitter.com/visakanv/status/1113154447050334208
- mda 3y ago
  Look what happened to image generators, no one talks about Dall-e or whatever that was.