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Who realistically sets out to create a business that needs more than 30mm users to be plausible as a revenue generator? This lends more to the notion that thes

by mvkel 15y ago

Who realistically sets out to create a business that needs more than 30mm users to be plausible as a revenue generator? This lends more to the notion that these "app builders" are falling backwards into business opportunities with no clear idea of how to execute. Can't great apps just exist without the expectation of 1bn valuations and rolling them up as companies?

pclark 15y ago
No. Running and maintaining Instagram probably comfortably costs in the six figures range with 30mm users. Operations at scale require venture capital funding. If Instagram were paid for, the user base would be a fraction - and more importantly, someone would just release a clone of the app for free, acquire millions of users, raise VC and crush you. The opportunity cost of Instagram implementing a revenue model today is huge. Given Instagrams popularity and influence I'd say there is no reason why it won't be as influential as YouTube -- $500mm is almost cheap when you think about it. "Who realistically sets out to create a business that needs more than 30mm users to be plausible as a revenue generator?" Swinging for the fence entrepreneurs. We should be supporting them. Instagram opportunities are once in a life time.
- timjahn 15y ago
  "Swinging for the fence entrepreneurs. We should be supporting them. Instagram opportunities are once in a life time." This is exactly the type of thinking I think we need less of. We shouldn't be encouraging people to play the lottery in hopes of a big, very-rare-chance-of-happening win. We should be encouraging people to work hard to build real, profitable businesses.
  - pclark 15y ago
    Instagram is a real business. There is more than one way to skin a cat.
- mvkel 15y ago
  YouTube. The second most visited website on the Web that has yet to generate a profit. A cost center for Google. Also, I hear rumors FB is acquiring Instagram for $1bn, which would be interesting for Sequoia.

by mvkel 15y ago

pclark 15y ago

No. Running and maintaining Instagram probably comfortably costs in the six figures range with 30mm users. Operations at scale require venture capital funding. If Instagram were paid for, the user base would be a fraction - and more importantly, someone would just release a clone of the app for free, acquire millions of users, raise VC and crush you. The opportunity cost of Instagram implementing a revenue model today is huge. Given Instagrams popularity and influence I'd say there is no reason why it won't be as influential as YouTube -- $500mm is almost cheap when you think about it. "Who realistically sets out to create a business that needs more than 30mm users to be plausible as a revenue generator?" Swinging for the fence entrepreneurs. We should be supporting them. Instagram opportunities are once in a life time.

timjahn 15y ago
"Swinging for the fence entrepreneurs. We should be supporting them. Instagram opportunities are once in a life time." This is exactly the type of thinking I think we need less of. We shouldn't be encouraging people to play the lottery in hopes of a big, very-rare-chance-of-happening win. We should be encouraging people to work hard to build real, profitable businesses.
- pclark 15y ago
  Instagram is a real business. There is more than one way to skin a cat.
mvkel 15y ago
YouTube. The second most visited website on the Web that has yet to generate a profit. A cost center for Google. Also, I hear rumors FB is acquiring Instagram for $1bn, which would be interesting for Sequoia.