In this specific case though, Sparrow was far from a low-to-modest traction product. Judging from their ranking history, they've been consistently in the Top 50

In this specific case though, Sparrow was far from a low-to-modest traction product. Judging from their ranking history, they've been consistently in the Top 50 grossing overall on the Mac App Store[1], and Top 20 grossing utilities on the iPhone[2]. That's likely worth $2000-3000/day in revenue. Those numbers are sustainable if you have a small team (1-3 people), but I'm not sure how big Sparrow's team was. Either way, I would say that they were in a very similar position to Instapaper, except the only difference being they had raised some VC funding (with all that implies regarding needing an exit in the future). [1] http://www.appannie.com/app/mac/sparrow/ranking/history/#view=grossing-ranks&start_date=2011-01-01&end_date=2012-07-20 http://www.appannie.com/app/mac/sparrow/ranking/history/#vie... [2] http://www.appannie.com/app/ios/492573565/ranking/history/#view=grossing-ranks&start_date=2012-03-15&end_date=2012-07-20 http://www.appannie.com/app/ios/492573565/ranking/history/#v...