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> That sounds like an okay business model to me. It most likely won't work. They have recurrent expenses associated with running a service, but they plan to s
by huhtenberg 12y ago
> That sounds like an okay business model to me.
It most likely won't work.
They have recurrent expenses associated with running a service, but they plan to support it with one-time fees. This has an absolutely uncertain scalability profile. At some point their existing user base will get all the features they need and stop paying, meaning that they will need to rely on acquiring new users for revenue, which in turn will lead to higher expenses. And this starts to look as a classic pyramid scheme to me (without even considering things like salaries and dividends).
Alternatively they can try harder to entice people to buy into the features, but this would mean artificially restricting functionality, castrating the free feature set, etc. I guess if they got enough momentum, they can get away with it, but in the end it's not that much better than an ad-based model.