4 ms·
How is the number of users a moat when you are losing money on every user?
by EmiDub 10mo ago
How is the number of users a moat when you are losing money on every user?
- raw_anon_1111 10mo agoA moat involves switching costs for users. It’s not related to profitability
- EmiDub 10mo agoA moat defends your business, if you lose more money the more users you have, the number of users is not a moat.
- raw_anon_1111 10mo agoThe idea is war of attrition and then as your potential competitors run out of money and it costs too much for a new entrant, you raise your prices to be profitable and/or enshittify your product.
- EmiDub 10mo agoRight, but unlike with social products (where the network of users is essential) or transportation/food delivery (where providers will follow the user volume) I just don’t see any stickiness benefit for OpenAI. A user’s conversation history is the only potentially valuable bit, but I think most users treat their ChatGPT history like their Google search history; disposable.
- WalterSear 10mo agoInference is cash positive: it's research that takes up all the money. So, if you can get ahold of enough users, the volume eventually works in your favour.
- EmiDub 10mo agoNot according to the FT and Ed Zitron: https://www.ft.com/content/fce77ba4-6231-4920-9e99-693a6c38e7d5 https://www.ft.com/content/fce77ba4-6231-4920-9e99-693a6c38e... https://www.wheresyoured.at/oai_docs/ https://www.wheresyoured.at/oai_docs/