They mention that users can invest in them through SAFEs. This only makes sense if they plan an exit, either by selling or through an IPO, or am I missing something?

I think it implies that they intend to take VC money at some point in the future, like a series A, and they’re trying to avoid VC money now while they can get better terms. I don’t know if that necessarily means they plan an exit, or if they’d be happy just being profitable, but I do think it implies they plan to grow significantly.

Other options include going public or paying out dividends.

Going public is a qualified event for a SAFE to convert -- it is a financing -- but curious about the dividends

SAFEs are often capped, so taking awhile doesn't matter so much, except maybe interest calcs

If a company is doing sustainably well, supposedly you could have a mutually agreeable mechanism to convert SAFEs to equity (at cap for example) and treat shaleholders with dividends.

Is this some sort of hack towards a co-op? I couldn't find anything about it on their website

The problem is that ad revenue so often becomes the escape hatch from an economically hard problem.

Need more money? Economic model not quite working? Companies face this all the time. Some solve it innovatively, survive, and show everyone else the way forward. Others fold or pivot.

But ad revenue short-circuits the hard process of economic innovation by tempting tech companies to take an easy way out, even when the problem is solvable without it.

(All of this wouldn't really be a problem if the ads business model weren't inherently adversarial against users.)

The sad truth is on average advertisers will pay more for your attention than you’ll pay not to have ads. So people continually complain about YouTube ads but ignore their option to pay to have them removed.

I pay for YouTube too. Between that and Kagi search, it's ~$20 per month. Which seems crazy in today's environment of 'everything free'. But seriously, I use these both all day for both work and play, but I only watch an hour of Netflix a day. So which is really more valuable?

I agree that on the whole, people will continue to go for the free option, but I'm just glad that some options are appearing to pay, which rebalances the incentives a bit.

Why wasting money on "feature" that can be done with same result for free? uBlock, NextDNS, pihole, etc. No-one is asking for ads by default, ever.

With YouTube premium you can listen to videos on the iPhone with the app in second plane or even with the phone locked.

Yeah, I should use a hacked rooted Android yadda yadda. But I just spent a week hacking and hawking for my life in an ICU, and I certainly didn’t want sanity-saving podcasts to shut down whilst on an hour-long stay at the breathing machine. Life is short.

"This is why tech companies keep pivoting to ads"

I think another factor is the paradox that the user who has enough money to be willing to pay to not see another ad is exactly the most valuable user to advertisers— they've pre-qualified themselves on multiple axes.

So there is always going to be an enormous moral hazard here with the ad-driven-freemium model— always a temptation to run an occasional high-value ad to the paying users, or to disguise the ad as a "recommendation" or position it instead as a "sponsorship", or whatever else. Other than users reacting swiftly and decisively against this kind of thing, it's hard to know how else to keep companies away from it.

One of the problems is price point. They are charging $10/month. While increasing the price will certainly decrease the number of users, a much higher price point could select for "power users" that will churn less and pay substantially more. In the long run that could lead to greater revenue.

Of course this depends on how the supply demand curve looks like for their specific business.

Catering to the whales, in casino speak.

This showed up at an internal Twitter meeting this week. Mr. Musk proposed making Twitter ad free for 8$ accounts before being politely informed that 8$ accounts actually produce 50$ per month in ad revenue.

An angry bird informed me about this :)

How do they know that, given that $8 accounts must be still pretty rare given they were just introduced?

Because it's a pattern that manifests everywhere and can be extrapolated.

Though in this case, it's likely that Twitter has repeatedly run internal studies about what a paid-tier would look like, and each time concluded exactly what the GP is passing on: that it would be a net loss because the most-valuable-to-advertiser accounts would be the first ones to pay.

Even just psychologically, it would be a major blow to their sales pitch, going from "pay $X to put your name in front of the top movers and shakers in the world" to "pay $Y to put your name in front of all the Twitter users too cheap to cough up $8/mo to not have to see you." Not hard to see that $Y is going to be less than $X... probably a lot less.

I think the analysis was for pre existing blue check accounts.

> This is why tech companies keep pivoting to ads

The reason they advertise is because they can. It doesn't matter how much money they're making now, they can always make more by advertising. Paying money just makes your attention more valuable. The only way to stop them is to make it impossible or illegal to advertise. Blocking ads everywhere and making no exceptions.

When google started, they were having difficulty staying solvent until they added ads, even though they had a better product than the other search engines. Its a space that's ill-suited to market solutions.

If their solution to insolvency is advertising, then let them be insolvent. We're not gonna keep enabling this behavior.

"Enough money" is usually defined by venture capitalists who want ALL THE MONEY and not by normal investors who want a modest predictable return. Patreon, for example, could have been a modestly profitable business which owned itself, but instead they keep flailing and spending lots of other people's money to satisfy the next batch of investors that one day they will be as rich as Google.