5 ms·

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.

• 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.