Hacker News new | past | comments | ask | show | jobs | submit login

Spoken like someone who wasn't old enough to see pets.com crash and burn really.

The basic model of capitalism is that if you can't exchange some for of payment for your product, it has no value. You need to create real value in the mind of the customer.

If you don't to that, no matter how much VC you have, you will die.




>> "if you can't exchange some for of payment for your product, it has no value"

If you're ad supported, that money comes from advertisers. I don't see why that's any less valuable than it coming from the customer.

You're valuable to the customer, and valuable to the advertisers.


It's not less valuable, it's just that in that situation the "product" is not your product...the user base is your product. There is a fundamental difference between improving a product for customer.paying-user and improving the user base for your customer.paying-advertiser.


It is less valuable imho. The public has a bit of a history with falling in love with the latest 'free' craze, then quickly abandoning it for the next flavor of the week. Look at the whole concept of 'social networking', first you had BBSs, then that went away in lieu of mainstream chatrooms, they then lost mainstream popularity to MySpace, and as we speak, MySpace is being overwhelmed by Facebook. Tomorrow, no one will care about Facebook for something new and shiny and Web 3.whatever.

When you spend money on something, most people invest more thought into it. You have to make an actual value judgement, rather than saying, well why wouldn't I have a Twitter account, everyone else does.

It's not your user base that is the product, it's what you do with your user base. One word, case in point, Yahoo.


I know this is a weasel thing to say, and I apologize in advance for that, but I don't see where we actually disagree.

Maintaining the size, quality, and ad conversion rate of your user base in a free/ad-funded business is where that business adds value, as opposed to fixing and improving a consumer-funded product. It's probably a lot more work than a consumer-funded product because, as you said, people are distracted by shiny new things and free sites have no "buyer's willful blindness to quality" so you must constantly manage your 'shininess' so they come back.

As for consumers making a value judgment, that does happen with ad-funded businesses; but the advertisers are your consumers and it's the advertisers making the value judgment about whether serving ads to your user base is a good way to spend their money.


Yes, I'm not discounting where the money can come from.

Getting big off VC without a viable profit stream is what I have an issue with.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: