My rule is that if nobody would pay for your service, you probably don't have a worthwhile business. If Google instituted a $0.99 monthly fee to use Google search, people would line up to pay it. They don't have to, because their business model works differently, but they could do that, and it would work. I'd probably pay for an account. If Facebook instituted a $0.99 monthly fee to use that, a lot of people would do…
I see where you're going with your rule: services that provide True Value™ would likely survive if they suddenly started charging a nominal fee right now. However, as a game developer with Free-To-Play development PTSD, I think this rule rests on an implied-but-important condition: People are already using and loving the service. Imagine that some shiny new app called Spark launches tomorrow and vaguely promises to b…
No, that's exactly not what I'm saying. Uber did just fine starting as a pay service as do a great many games, Netflix, HBO, Amazon, etc.
> Imagine that some shiny new app called Spark launches tomorrow and vaguely promises to be Twitter 2.0, well no one would be willing to jump on unless it was free.
Right--that's because Twitter 2.0 is also fucked from the beginning: they don't have something users would pay for any more than Twitter 1.0 did.
> Even $1 a month is too much for us short-attention-spanned smartphone users, as the total shift to F2P games on mobile has shown us. Nothing outside of Minecraft is in the top 100 grossing apps on Android nor iOS.
F2P is basically just an advertising strategy; I'd count that as having something people are willing to pay for, because they're willing to pay for in-game purchases or premium experience subscriptions.
> Perhaps the answer lies in starting free, getting people hooked, and then easing in a subscription fee? This would also come across as a bait-and-switch, as you said, and some users would inevitably flock to the next free clone.
I guess I wasn't clear about this, but I think a bait-and-switch business strategy will work fine if you have something people value enough to pay for. It's kind of pointless, though, IMHO, because it doesn't fail fast: if it turns out you aren't providing people anything they value, then you won't find that out until you get to the "switch" part.
Ultimately, I think the bait-and-switch strategy is just a way to extract money from VCs and offload risk onto them without having to prove your value proposition, but that comes at some significant cost. If I were a VC I'd probably want to invest to build something and then release it for pay up front--that saves the cost of implementing the bait-and-switch strategy.
> Ultimately, and unfortunately, I don't think there's an easy answer to monetization anywhere...
The answer is "provide value that people are willing to pay for", but I agree that's not an easy answer. :)