Comment by pclark | Hacker News Reader

Comment by pclark | Hacker News Reader

This post seems to conflate two issues:

* Churn is high, optimising user flow is mediocre at best, and iteration speed is slow, on mobile.

and

* Free is bad because of privacy blah blah blah.

I personally view the first issue as kind of un-solveable. Life is hard, etc. What are you going to do, make a HTML5 mobile application? good one.

The second, ehhhhh. Users don't give a shit about privacy. Really. Really. Like, really. Hell: I'd rather use Facebook for free and let them "sell my data" versus pay $50 a year.

Anyway, I'll reiterate my #1 learning of how startups grow into businesses. There are two ways to build a $100M company:

#1 Your users have a high LTV (=$5k+) and you can afford to spend significant (=$100+) capital on acquiring the user.

#2 Your business is massively (=10) viral, allowing you to acquire users insanely cheaply.

The reason why it is – always – very questionable to charge for a B2C user is that it's generally rather difficult to have a story that makes individual people = high LTV, ironically, without having millions of them.

You need to wrap your legs around one of these two approaches and never ever stray from it.

I am making two points, the first that we are web-first, and the second that we are revenue-first. I'm not conflating them; that's the point of the article.

In any case, they are related in my mind. In order to justify why we are switching to a paid model, I bring up privacy because I think you are trading the loss of privacy for that of cash when you choose between ad-supported and a paid model on a consumer app. As for going web-first, I think I made the reason clear.

I agree with most of what you said. Sharing needs to be #1 to have viral growth. Large audiences are required for IAP and Advertising to make sense (I'd also add freemium to that list). An intrinsically leaky funnel needs even heavier viral growth to get to those large audiences. Heavy viral growth is probably going to be at odds with privacy.

But I think you need to pay attention to what others are saying. If you can't get users to complete a series of tasks to get to your value proposition, either the (expected) value you're offering is too low, or the expected probability of getting that value is too low.

In other words, with a high enough value proposition, you should theoretically be able to get someone to do something EXTREMELY difficult.

I agree with your points, however, you don't need anywhere near $5k LTV to be able to spend $100 to acquire a customer. Also, I'm unsure what "10" viral means, but with k>1 virality your business will grow exponentially by definition.

ironically i chose very high example numbers to avoid a bicycle shed debate as to what required numbers are.

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