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Investors to Web Start-Ups: Where's the Advertising?
- alex_c 19y agoI'm sure part of the rationale is - given how cheap bandwidth/hardware/software is getting, if you're charging for your service on the web, chances are someone will come along and give it away for free. I guess when that happens investors aren't really willing to bet that the pay service will continue to grow once there's a free alternative. Which isn't to say that's always true...
- nickb 19y ago>Which isn't to say that's always true... Exactly... just take eBay as an example. No amount of no-fee auctions has been able to dethrone them. If you think about it, you will notice that as soon as you're mediating the exchange and money changes hands, people don't mind giving you cut at all. They don't even consider the fee when listing/purchasing (well, eBay charges listers so purchasers don't mind). As long as you can attract enough purchasers (i.e. eyeballs), sellers will come. That's why eBay is not squeamish about jacking up the fees...
- brlewis 19y agoThis is counterintuitive to me. I thought VCs did not want uniformity of business models among the startups they fund.