[dperfect]

I'm not faulting consumers for wanting free stuff. If anything, it's a symptom of companies (and investors) putting too much value in vanity metrics and expecting that it will be easy to transition to revenue.

I've seen it first-hand: startups intentionally forgoing revenue so they can be measured by the stick of imaginary future profits correlated with their free product's success. Then when investors finally do start asking to see real returns, it's a scramble to find something that doesn't involve charging their current user base (because of course no one wants to pay for something that has been free previously). That's when the "creative" money-making ideas start getting real consideration.

In effect, those actions end up communicating to the public that software is free when it really isn't. It gives the impression that there isn't a cost associated with developing and maintaining software, when really it might just be funded temporarily by investors with deep pockets and high expectations, or supported by other revenue sources that the end user would not agree to in full transparency.

[laurex]

My understanding is that VCs actively encourage the behavior of “grow then figure out the business model.” Of course, if you are a free product at scale, the most simple solution is to start selling data, since it avoids the challenge of trying to get consumers to pay for something they “believe” is free. This obviously leads to free products that are less and less in the interest of the user, but it’s very very difficult to convince someone who got a thing for free that it can’t continue forever that way, even if there are obvious costs that must be converted to supply the free good. This is especially true if the competitors are offering free based on selling data. There’s definitely an interesting and challenging future in finding ways to scale in spaces that are currently dominated by “free” in exchange for data and privacy.