Actually, I would imagine the odds are worse than that. Not all startups give away their product for free, and I'm guessing the failure rate is higher for those that do.

But I don't see the problem with that. Software companies that want to change the world have to be free, at least initially. If somebody wants to swing for the fences, I don't think anybody should stop them. It's not the business model I would choose, but I certainly admire those that do.

"Software companies that want to change the world have to be free, at least initially."

Why? I can think of plenty of software companies that changed the world with a paid product (Oracle, Microsoft, etc.)

for some reason i feel more fuzzy inside thinking about the companies that change the world with free software, free as an ideal, with $$ secondary and on a sliding scale. i mean fuzzy as a human being rather than investor (although investors are also human beings).