3 ms·
Yes, offering the service probably has some marginal cost, but I am positive it is well within their projected (and profitable) CAC. People who are donating ha
by svnt 2y ago
Yes, offering the service probably has some marginal cost, but I am positive it is well within their projected (and profitable) CAC.
People who are donating have zero chance of a positive financial outcome. That is why it is called a donation.
- inemesitaffia 2y agoIf you donate anything you have an immediate real or opportunity cost. You can't take that away.
- svnt 2y agoIf you donate something that is spare capacity on infrastructure that has a marginal cost of the data outflow from your servers on earth, and the customer has to buy aging hardware that you are also sitting on inventory of, and that hardware is ASP $300-$600, it is not a donation. It is extremely likely that your marginal costs for that month are only internet transit/egress to the tune of less than $0.05 per GB, and you soft cap their access such that maybe 100 GB is their practical limit for the month, you just sold a $300 device that sales were slowing on for worst-case $295, with a likely future revenue stream.
- inemesitaffia 2y agoLike I said elsewhere, this is something someone asked for. They valued it enough to ask for it. The fact that you don't see that or value it like they do doesn't change things. Starlink users are growing not receding. The devices have other places they can make money today. You can talk margins all you want. Opportunity costs exist. So does fixed cost amortization. Lots of these people already bought the hardware, and we're having difficulty paying for service. Imagine giving up $100+/dish guaranteed and someone talking about cents on the Internet.
- ahmeneeroe-v2 2y agoYes, Starlink does not meet your custom-made definition of the word. Especially since you've done the work of assuming their future cash flows