4 ms·

(to paraphrase:) "Do you want 10,000 users paying nothing or 1,000 users paying something" This is the key take-away for me. I know a lot of founders who, fran

by dotBen 17y ago

(to paraphrase:) "Do you want 10,000 users paying nothing or 1,000 users paying something" This is the key take-away for me. I know a lot of founders who, frankly, are building startups for megalomaniac reasons. I think there is some "look at all these users who like my product (and thus me) so now I'm a rock star" philosophy in there, which isn't helped by people like Ashton Kutcher and MC Hammer coming into the scene. We're about to complete a pretty tasty angel round for an SaaS app that has a healthy monthly recurring subscription on it from Day 1. I'm pretty psyched. However, because its b2b it's never going to achieve me the 'rockstar appeal' that running a startup with millions of free accounts on it will would. I don't mind, but I know that frankly that's what dis-interests a lot of founders.

webwright 17y ago
False dichotomy FTW. There are tons of businesses that can extract tons of value from free users. Freemium, lead gen businesses (Mint), and (yes) advertising. Getting paid in ego is pretty stupid, but amassing free users isn't necessarily so. No reason to throw out the baby with the bathwater just because of Ashton Kutcher, etc.
- dotBen 17y ago
  Ok so two points. "Freemium" makes sense, cos there is a revenue stream in there somewhere. I'm talking about startups that don't have any business model. Secondly, for every Mint I can show you a ton of startups that have got no where. In fact Mint is fairly unique because it uses the data for lead gen, as you say -- but most free startups aren't smart enough and/or not hoarding the right type of data to get into that business.
  - webwright 17y ago
    Leadgen isn't just about data. Example: There is a business where you can go to the web site and request a quote from 3 car dealerships for a specific year/make/model of a car. They sell these leads to 3 car dealerships at $20 per. Last I heard, they were doing millions in revenue a month. I also know a senior housing directory startup that's selling customers on a per-lead basis and doing quite well. I'm all for obvious and immediate business models. I think it's a lower risk path (and it's the one I've chosen), but the go-free-and-get-popular is a pretty tried and true path that's worked for plenty of folks. But it DOES require that you get popular, which is really hard to do. SaaS stuff can be lucrative if you don't manage to be super popular.

by dotBen 17y ago

webwright 17y ago

False dichotomy FTW. There are tons of businesses that can extract tons of value from free users. Freemium, lead gen businesses (Mint), and (yes) advertising. Getting paid in ego is pretty stupid, but amassing free users isn't necessarily so. No reason to throw out the baby with the bathwater just because of Ashton Kutcher, etc.

dotBen 17y ago
Ok so two points. "Freemium" makes sense, cos there is a revenue stream in there somewhere. I'm talking about startups that don't have any business model. Secondly, for every Mint I can show you a ton of startups that have got no where. In fact Mint is fairly unique because it uses the data for lead gen, as you say -- but most free startups aren't smart enough and/or not hoarding the right type of data to get into that business.
- webwright 17y ago
  Leadgen isn't just about data. Example: There is a business where you can go to the web site and request a quote from 3 car dealerships for a specific year/make/model of a car. They sell these leads to 3 car dealerships at $20 per. Last I heard, they were doing millions in revenue a month. I also know a senior housing directory startup that's selling customers on a per-lead basis and doing quite well. I'm all for obvious and immediate business models. I think it's a lower risk path (and it's the one I've chosen), but the go-free-and-get-popular is a pretty tried and true path that's worked for plenty of folks. But it DOES require that you get popular, which is really hard to do. SaaS stuff can be lucrative if you don't manage to be super popular.