3 ms·

Interesting how 37Signals is painted so well in this piece, and Chris Anderson only sounds like a lost child babbling about the internet. Personally, I find the

Interesting how 37Signals is painted so well in this piece, and Chris Anderson only sounds like a lost child babbling about the internet. Personally, I find the arguments in 'Free' to be valuable to anybody that reads HN, but they should only be viewed as supplement to what we already know. 'Free' is not a business plan, and very few companies can pull it off in any purposeful way. Mint does it well because they have an incredibly focused and niche market. If you are on their site, you are trying to be financially responsible, and your bank/debit/credit are all fundamentally attached to your account. Google did it well because they knew there was a huge well of oil waiting for them, they simply had to tap it right. Users often go to Google/search engines with the 'intent to buy', and this is where Facebook and Twitter fall short. It is consequentially rare that I am scouring my friends'/followers' pages on social networks with any intent to spend money.

sachinag 17y ago
Let's be clear: Facebook is cash flow positive entirely on advertisements. No one is right about everything, all the time, in all circumstances. This is why we even have business schools. You learn about a ton of options in a ton of situations and your job as a manager is to make the best call you can and try to execute to a good result. Why would picking a business model be any different than deciding what framework/language/database/etc. to use?
- nir 17y ago
  But Facebook, with >300m users, is an edge case. It's a business model in the same way getting into acting in order to become as rich as Tom Cruise is a business model. 37Signals model of charging for a service, on the other hand, can at least appear reasonably replicable (though also much harder than it seems, if you don't have Fried's natural talent for marketing & PR)
  - danielzarick 17y ago
    You are 100% correct. This is what I was trying to say, but a lot shorter and more eloquently put. Thank you.
- danielzarick 17y ago
  I'm not exactly sure what point you are trying to make with your reply, but let me try to respond the best I can... Facebook has barely reached cash flow positive, and that only means more money is coming in rather than going out [only stating it for argumentative purposes, I know you understand what it means, of course haha]. So until they are [consistently] making enough revenue to cover part of their $700+ million in VC funding, I won't use them as a successful example. Facebook has plenty of potential, but I have my doubts about how much they can grow in terms of revenue. I believe that their user numbers will continue to grow, but I'm not sure that each user is as valuable for them as for Google. Until they change user behavior and intent significantly, I don't foresee Facebook creating a global marketplace on the scale that Google has. In regard to business school, which I am in a form of... I do not believe that we are prepared by attending business school to execute, like you stated. We execute by being acutely aware of the circumstances and understanding the situation, which is attained outside of the classroom by seeing and doing. But overall... I am not quite sure what point you meant to make with that section of your reply. And I agree, picking a business model is in exactly the same realm as deciding what framework/language/database/etc to use. There is definitely NOT a one-size-fits-all business model. The best managers are aware of the options, like you said, but I do not believe that they are necessarily learned in business school. Understanding how Facebook/Twitter got to where they are today, and trying to speculate where they will be in the future is the kind of thing that prepares you to make the right decision in regard to your own business.

sachinag 17y ago

Let's be clear: Facebook is cash flow positive entirely on advertisements. No one is right about everything, all the time, in all circumstances. This is why we even have business schools. You learn about a ton of options in a ton of situations and your job as a manager is to make the best call you can and try to execute to a good result. Why would picking a business model be any different than deciding what framework/language/database/etc. to use?

nir 17y ago
But Facebook, with >300m users, is an edge case. It's a business model in the same way getting into acting in order to become as rich as Tom Cruise is a business model. 37Signals model of charging for a service, on the other hand, can at least appear reasonably replicable (though also much harder than it seems, if you don't have Fried's natural talent for marketing & PR)
- danielzarick 17y ago
  You are 100% correct. This is what I was trying to say, but a lot shorter and more eloquently put. Thank you.
danielzarick 17y ago
I'm not exactly sure what point you are trying to make with your reply, but let me try to respond the best I can... Facebook has barely reached cash flow positive, and that only means more money is coming in rather than going out [only stating it for argumentative purposes, I know you understand what it means, of course haha]. So until they are [consistently] making enough revenue to cover part of their $700+ million in VC funding, I won't use them as a successful example. Facebook has plenty of potential, but I have my doubts about how much they can grow in terms of revenue. I believe that their user numbers will continue to grow, but I'm not sure that each user is as valuable for them as for Google. Until they change user behavior and intent significantly, I don't foresee Facebook creating a global marketplace on the scale that Google has. In regard to business school, which I am in a form of... I do not believe that we are prepared by attending business school to execute, like you stated. We execute by being acutely aware of the circumstances and understanding the situation, which is attained outside of the classroom by seeing and doing. But overall... I am not quite sure what point you meant to make with that section of your reply. And I agree, picking a business model is in exactly the same realm as deciding what framework/language/database/etc to use. There is definitely NOT a one-size-fits-all business model. The best managers are aware of the options, like you said, but I do not believe that they are necessarily learned in business school. Understanding how Facebook/Twitter got to where they are today, and trying to speculate where they will be in the future is the kind of thing that prepares you to make the right decision in regard to your own business.