agreed, the great part of making users pay, is that you are profitable from pretty much day one, since you aren't spending an arm and a leg on infrastructure.
There are thousands of websites out there that make their founders millions of dollars every year that noone here has heard of. Why? Because they are a paid service with only a few thousand users.
A little math lesson: 3,000 users, at $99/mo = 3.564 million per year. And since they have a low volume of users, they aren't spending a lot of money on servers etc.
By comparison for a free service to reach 3.5 mil profit per year, they'd need to have 3 million users.
The great part about internet, is that there are millions of people using it. And a large portion of these users have never heard of all the free solutions we all know about since we read HN.
Another point to this: people who run these sorts of low user, high margin companies will never reveal it to the hacker news/tech crunch/etc. crowd - for the simple reason that it will seem like it's way too easy how they are making money and it would only invite competitors.
I'm not saying it's impossible to be extremely successful on the ad model, and there are certainly plenty of successes within Y Combinator itself which have been acquired based on free services - the only take away I want people to make from my posts is that you should consider charging people for your service because if it's good enough service and you do it with high quality, there really is no reason for you not to get paid.
There are thousands of websites out there that make their founders millions of dollars every year that noone here has heard of. Why? Because they are a paid service with only a few thousand users.
A little math lesson: 3,000 users, at $99/mo = 3.564 million per year. And since they have a low volume of users, they aren't spending a lot of money on servers etc.
By comparison for a free service to reach 3.5 mil profit per year, they'd need to have 3 million users.
The great part about internet, is that there are millions of people using it. And a large portion of these users have never heard of all the free solutions we all know about since we read HN.