[moises_silva]

> For an adjacent example, LastPass never took a dime of VC money (afaict), but their structure as a for-profit company pushed them to lock down their product and charge rents, where they had not previously. If they had taken VC money or went public instead, it may have delayed the inevitable, but it only would have been a delay, not a solution.

I do not understand. It's a business. Why would anyone expect important services to be free? during ramp up there's a benefit of providing free or discounted services while you grow, learn what users want, estimate your own costs, etc; It was a free ride and you can enjoy it while it lasts. Why would anyone expect a free ride to also last forever?

In my opinion great products need a strong balance of capital and ideals. Capital incentives unchecked by a counter balance of leadership actually believing in the mission of the company can lead to bad outcomes. Pure idealism without adequate funding has another set of problems though.

[gen220]

> Why would anyone expect important services to be free?

I think the "common person" does not see these as growth hacks. The internet is full of things that "appear" free, and have "appeared" free forever.

You have x-ray vision for how these businesses work internally, and you describe the playbook very accurately, but most people do not have this kind of context.

Which makes it hard for those people to distinguish "good people doing good work for the good of all" from the playbook you describe. It's especially hard when the company describes itself as the former externally.

> Capital incentives unchecked by a counter balance of leadership actually believing in the mission of the company can lead to bad outcomes.

This is true. As a customer, depending on the good-will of leadership to counterbalance the influence of capital is depending on humans, and even really good ones are fallible and temporal.

A for-profit company blessed with good leadership today does not guarantee a for-profit company with good leadership tomorrow, a year from now, and so-on. Eventually, within the constructs of a for-profit company, capital always wins.

> In my opinion great products need a strong balance of capital and ideals.

Yep yep, value creation and openness are not mutually exclusive, and one does not have a monopoly on the other.

However, I'd argue that value capture and openness are mutually destructive: only one wins in the end, and the total victory of either marks the death of a business (i.e. something that generates profits for shareholders).

From a consumer's point of view, once an organization gets in the mindset of optimizing for value capture over value creation and openness, it's time to consider moving on.

The paradigm-shift of software is that the victory of openness no longer means the destruction of customer value, because OSI-licensed software can outlive the business.

[moises_silva]

> This is true. As a customer, depending on the good-will of leadership to counterbalance the influence of capital is depending on humans, and even really good ones are fallible and temporal.

Well, I dunno, you always are depending on the "good will" of leadership. They could decide to squeeze every cent and provide as little value as possible at any time, whether they have venture funding or not. If your alternative is a "non profit", look at Mozilla, plenty of people unhappy with a lot of their decisions and users feeling "betrayed". I don't think we can expect most services to run as non-profits regardless. It's an imperfect system, but is the best we've got so far.

> From a consumer's point of view, once an organization gets in the mindset of optimizing for value capture over value creation and openness, it's time to consider moving on.

I'd argue this comes after the IPO. When you have millions in venture capital, is easy to keep running the business at a loss and keep growing. When it's time to make a profit is when things start getting hard.

I suppose this is what some people don't like. They'd like founders/businesses that stay small and focused on a niche, make money but not too much and keep a good value product running. Without looking at 1Password finances though, even when it was a paid service, we don't know how profitable it was, if at all, and may be going after enterprise customers with this new funding is the only way to not only 'break even' and start making some good profits.

[gen220]

> you always are depending on the "good will" of leadership

This isn't true if the product is FOSS. The Mozilla Company can be a disaster, but that's OK because Firefox is OSI-licensed. It will outlive Mozilla, and one or more community forks will appear to replace it, if needs be.

For example, observe how https://rockylinux.org/ rose from the ashes of RHEL/CentOS, after Red Hat were acquired by IBM.

The lesson is that as long as there's interest in an OSS product, there is money to be made servicing (hosting, bug-fixing, whatever) it. Where there is money to be made servicing it, a business will appear to soak up the demand.

> I'd argue this comes after the IPO.

I think it's purely a function of who your shareholders are, what your unit economics are, and how much money you have in the bank. It can happen to any stage of company. In general, contrary to popular HN belief (not saying it's yours), VCs prefer not to put good money after bad.

There are many public companies that are not relentlessly pursuing value optimization, because they have good unit economics, and have invested in attracting shareholders that are aligned with this idea. They are not starved for cash, and can raise money with low-interest loans when a growth opportunity presents itself.

> Without looking at 1Password finances though, even when it was a paid service, we don't know how profitable it was, if at all, and may be going after enterprise customers with this new funding is the only way to not only 'break even' and start making some good profits.

Like you say, we can't comment on 1P directly without knowing access to their Stripe account.

One might charitably say, their business hitherto was an experiment to see if one could build a VC-scale business around the problem of personal password management. The answer is no, but they can leverage their experience gaining that knowledge into solving a similar problem at an enterprise scale. That's probably how the execs & employees think, and it's a very reasonable take.

Unfortunately, while it's optimal for long-term viability of their business, it's not optimal for the consumer world writ large. While 1P has bootstrapped at the consumer's expense and benefit, building a consumer-facing brand for themselves along the way, it is now all downhill for the consumer from here, because they are no longer the focus of the company.

One can imagine a counterfactual, where they had developed their core applications as FOSS. 1P the business could continue to make money as 1P-enterprise, and "the people" could take over maintenance of 1P-consumer, if there was sufficient interest. The valuable experience they've accrued in building their product would continue to spin off value, instead of slowly grinding to a halt.

---

Don't get me wrong, if you put me in the shoes of some exec at 1P with a fiduciary responsibility, I would do the same thing they're doing. It's the only rational direction. Their decision space is/has been heavily constrained by their initial conditions (accepting VC money, not starting with a FOSS product, etc.). If they hit `git push` to some public remote today, they risk losing the entire network they've been investing the last N years in building. It's not reasonable to expect people to make that trade.

I guess I'm hopeful that people will observe these outcomes, that it may influence their own decisions in choosing the initial conditions of their own projects. Sometimes fiduciary responsibilities contravene social responsibilities, and the superior cure for that circumstance, like with so many others, is prevention.

[neon_electro]

1Password has been a paid product since its inception.

[moises_silva]

Yeah I get this, I'm a paying customer. Not overly worried, as long as I can export and move on to another service. I used to be a LastPass user until 2yrs ago. I was replying to the comment about LastPass starting to monetize users (e.g limiting the free tier functionality even more).