
Maximizing Profits Doesn't Mean Screwing Your Customers - nreece
http://techdirt.com/articles/20080904/0248552163.shtml
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BrandonM
This submission kind of reaffirms the idea (from a slightly different angle)
that it is good to start with a good, free service and monetize it later. In
the provided example, an online world purposely capped spending in hopes of
getting a better public perception. Consider also that simply in doing so,
they have generated some positive awareness of their company.

It's nice to see "Do good" being exercised in business and being successful; I
think that's the approach that leads to the most happiness for everyone.

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jacobscott
Disagree. More likely they realized that sustainable revenues from teenagers
was a better bet than being the online equivalent of a 1-900 number, then
having parents pull the plug and dispute charges.

Save the general concept of a long-term play, I see very little here that
implies anything about the free service -> monetize later path.

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BrandonM
The free -> monetize angle I was referring to was their reference to
craigslist. I agree with you on the sustainable revenues part, that's
basically what I was trying to get at.

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jacobscott
With regards to craigslist -- I don't think that they ran with a high burn
rate or took much (if any) VC money. Today, they are certainly profitable,
although probably not making as much money as they could be. I think the key
is to make sure you know how you will be making your long-term money before
ofering stuff for free.

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known
RoI = Revenue - Expenditure / Investment

