Restating
A lot of people mistook my last post to mean nothing on the internet will ever be free anymore. Despite the “High volume, ad-supported web businesses will always exist, because in certain areas (search for instance) they just make sense” disclaimer at the end, I think I did a poor job setting the tone. My assertion wasn’t that they are or will soon be dead, just that they’re going to be a lot less common.
Paul Graham said:
There are some startups where you want to charge users, and some that you want to be free and just go for growth, and which strategy you use depends on the nature of the startup, not the state of the economy.
Thinking that every startup has to start charging its users now because the economy is bad is just as mistaken as thinking a few years ago that no startup had to charge its users because the economy was good.
I don’t disagree with that at all. I just think that for a long time most startups that should have been charging at least some of their users were afraid to. They’ve been erring on the side of free in very large numbers. They’ve been erring in that direction because it worked, and it worked because of a good economy, or at least it will cease to work for a time because of a bad one.
And just as it maybe was too far to one extreme in a good economy, it will probably shift too far to the other in the bad one. It will be mistaken in many cases perhaps, but on the balance it will be closer to correct because most startups now don’t charge anyone for anything, when in reality most startups (but not all) probably should.
Moreover, at least based on my own experience, founders choose their startup from a pool of ideas. I realize that probably not everyone is as creative as me, but I come up with at least one new product idea every day. I consign most of them to the scrapheap immediately because I just don’t think many people would use them. Some I think would be popular but well outside of our startup’s purview (hell, a couple were restaurants and one was a snow plowing business) and those I file away in case I need startup ideas years from now. Some I think would work and fit well with what we’re doing but my team doesn’t for whatever reason. And once in a blue moon one of those ideas makes it through all the filters and becomes a new Blue Frog Gaming product, like Football Tycoon.
I think most startup founders are at least somewhat similar in that they have a lot of ideas from which they choose one. They don’t just see one thing somewhere that needs improving and go for it. They see lots of things everywhere that need improving and they choose the one that passes through their filters.
мебели стара загораAnd for the last 5 or so years, startup founders haven’t really used “is this monetizeable?” as one of those filters. Why would they? Acquirers didn’t, so nobody on down the chain did. I think that’s going to change with the new economy, perhaps even more so than it really should.
March 12, 2009 at 11:27 am
I didn't perceive your original entry on this topic the way some people evidently did, for what it's worth. Your forecast of an upcoming trend toward charging users rings true to me, as does your contention that some startups will follow that trend to their detriment. Alas, many people follow trends at their own peril in all facets of life, and in all economic conditions. On the whole, though, I would consider more startups charging users as a “correction.”