Re:How Are We Going To Make Money?
by augustus on Friday March 28, 2008 @06:13PM
(#148916)
I see your point. This is the classic business mindset.
I would venture to say though that the classic rules can be broken for other considerations because the Internet is a new medium.
I will get to other considerations in a minute but the main thing to understand is that the Internet breaks the old rules by lowering distribution costs.
It makes sense to delay monetization if you have a compelling user proposition that can be scaled quickly through word of mouth(ebay,youtube,flickr) or by partnering with an 18 wheeler (google,paypal,skype).
The assumption here is that if you build a large user base it takes a very small number of paying users to make money.
Its easy to see that in each case there is a real value proposition. In fact none of these applications would exist except on the Internet.
Although some rules have changed, the old rules still apply i.e. building something with a real value proposition and then distributing it without breaking the bank.
Those that failed did not create real value in the marketplace not because of monetization.
I would venture to say though that the classic rules can be broken for other considerations because the Internet is a new medium.
I will get to other considerations in a minute but the main thing to understand is that the Internet breaks the old rules by lowering distribution costs.
It makes sense to delay monetization if you have a compelling user proposition that can be scaled quickly through word of mouth(ebay,youtube,flickr) or by partnering with an 18 wheeler (google,paypal,skype).
The assumption here is that if you build a large user base it takes a very small number of paying users to make money.
Its easy to see that in each case there is a real value proposition. In fact none of these applications would exist except on the Internet.
Although some rules have changed, the old rules still apply i.e. building something with a real value proposition and then distributing it without breaking the bank.
Those that failed did not create real value in the marketplace not because of monetization.