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Random guy from HN says: "Your business model should be as follows", geez.. I have found that in most cases asking for money earlier than later is the way to g
by zongitsrinzler 11y ago
Random guy from HN says: "Your business model should be as follows", geez..
I have found that in most cases asking for money earlier than later is the way to go. There is a difference between finding users and finding users willing to pay.
- nbevans 11y agoI don't apologise for cutting to the chase. I took issue with the pricing model and suggested a way that, I think, would be better suited. There is a different between those types of users, yes, but frankly that is a nicer problem to have than just finding any users at all. What I'm suggesting is not without precedent. Pretty much every SV startup looks to build user base first and monetise later.
- rimantas 11y agoAnd pretty much every money making company is the opposite?
- blowski 11y agoThere are some successful business models that get massive funding, and go for explosive growth. These often work well for services that either have massive economies of scale (Amazon), or strong network effects (Facebook). But another business model is to grow slowly, focusing on profitability along the way, and this works well for businesses in a niche (Pingdom), with low network effects (Basecamp) or high marginal cost per user (Digital Ocean). If a business with high marginal costs per user and low network effects goes after explosive growth by subsidising users, they run the risk of running out of cash before the point they have enough profit to cover the subsidy. There are lots of exceptions - Spotify and Dropbox come to mind. But there are lots more forgotten startups that incorrectly thought "If we get eyeballs and engagement, the revenue will follow".
- nbevans 11y agoI should have known throwing in the SV comparison here would cause this tangent. Oh well. The point is really that this was a Show HN post about a little hack someone put together in probably a single weekend. And with a totally unproven product idea, unexplained use cases let alone what ROI might look like, he has already put in place not just a 1 price plan, but a full swathe from startup to corporate customer. It just seems massively over the top at this very very early stage. A simple disclaimer indicating that he is monitoring API usage, for now, along with a donation button and a "let's talk if you want to use this in an enterprise environment" etc, would have been sufficient. I wish the guy well, honestly. But there is something to be said of taking things a bit more slowly and progressively. Verify the product idea is at all viable first. Before showing your full hand with badly conceived product plans. Those plans could very well be doing more harm than good. Until you've gathered feedback from customers you don't know if those $ values are a million miles of the expected mark. And the fact there is no free plan for even limited testing is ridiculous really.
- deleted 11y ago[deleted]
- Zeebrommer 11y agoOT: thanks for bringing this up! It is this kind of clash of informed opinions that I read the HN comments for.
- nkohari 11y agoPretty much every SV startup raises investment, also. Without that, giving a product away for free and "figuring it out later" doesn't really work.