Making money along the way: Did Dropbox and Evernote heed the lessons of Flip?
DHH
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I agree with your views on this post a 100%. It kinda reminds me of one of your talks were you posited that it makes more sense to grow slow but profitable with positive cash flow, as it helps focus on building truly amazing products not fluff.

America has a whole lot of money chasing tech companies and VC’s have habituated the idea of foregoing revenue and a business model for growth and vanity metrics. Not all businesses that are great with loads of vc money can ever turn a profit. Advertising for long has been the escape for some of these startups, however with the rise of adblocks we are going to see some hard times for services that are focused solely on advertising. Also not all business can get away with fremium or the subscription model.

Just because a service is $3.99, doesn’t mean it’s cheap. If I’m the customer and I have 3 other subscriptions that amount to $48, that extra $3.99 takes me above the $50 mark that I am mentally comfortable with paying every month. So I might stick on the free version for a longer time. The moment business that are not media businesses focus on creating real value that solves a great pain point and customers are willing to pay for, they would have a shot at having a higher staying power and the growth might be slow but the stress in the business will be minimal and manageable.