[xg15]

But this implies that "squeezing the customer" tactics - where you first focus on growth at all costs, then later find how far you can degrade the service before a critical number of customers quit - is the only way for a company to survive.

I don't see any evidence for that - and in fact, GP proposed/reminded of an alternative business model for WhatsApp.

[jf-]

Actually what I was getting at was pricing - customers who are used to getting something for free will always think that any charge is outrageous. In non-tech examples people think that what are reasonable prices are gouging etc. Not that gouging doesn’t happen, but the public is bad at judging what a reasonable price looks like.

In the specific case of whatsapp, it would be interesting to see what would happen if the service did offer a $1 a year subscription. I’d pay, assuming that data wouldn’t also be used or sold for advertising. But I have a gut feeling that most wouldn’t, they’d rather switch to something that cost nothing, even over something that was very cheap.

Psychologically the gap between free and any cost is large. Which means that for a business, people are either willing to jump that gap or not. The price itself isn’t really a huge factor, it’s free vs not free, so the price may as well be higher than $1, or whatever the minimum viable amount is.

Also the post above was making some wild comparisons that I wanted to point out are silly.