[morgante]

In theory, you can charge your average lifetime value upfront.

In practice, for a good app the lifetime benefit to users vastly exceeds what anyone would reasonably pay upfront. For example, I've paid hundreds of dollars to Dropbox over the years (and feel like I've gotten well over $1,000 of value)—but I would have totally balked at paying even $200 on signup.

[jakejake]

That is true, and to make matters worse it's probably near impossible to figure the right amount out when you've just started the company. You don't always know how people will wind up using your app.