Get it while it's cheap: Pinboard's revenue model

One of the wonderful things about being a small business on the Internet is that there are several favors (SEO considerations, viral marketing, word of mouth, network effects) which make double-digit YoY growth practically a given. (You are more or less incapable of saturating your market, something that larger businesses have to worry about -- what does Facebook do after signing up nearly every American who uses a computer regularly?)

If you keep at it, the miracle of compound interest will do all the rest.

Compare that to a more traditional day job, which typically gives you a higher starting salary and then increases at 2 to 4% a year, with SHARPLY limited options for ever getting out of that bracket no matter how good your performance is.

Well, if the price gets to $40, he would have roughly 40,000 users. That's roughly $800,000 in gross revenue. (20,000 * $40.)

Assuming the operating costs are low, this site could bring in a life changing amount of money for one person.

Edit: It's interesting to think about whether he'd make more money with the price going up logarithmically.

The practical effect of the money + cheap location is that it gives me a few months of development time that I can pour back into the site. It's more of a bootstrapping technique than a straight-up scam.

I have better idea.

You could lower the price day by day when nobody registered and raise again if there were registrations in last few days.

It helps to read the article and verbiage on the website. For one thing, this method has apparently raised money roughly comparable to what one would get from Y Combinator at no cost in equity - i.e. enough to bootstrap the development of the subscription features.

I'm considering it for a side-project I'm working on now -- but, man, it's so hard for a site to gain traction even with free accounts, I'm not sure I have the stones.