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Are these two ways really that different?

Essentially all the article states is that a profitable business needs to have profits per user that scale according the cost per user acquisition. Viral is cheap acquisition, so profits can be less. Non-viral costs more per user and typically has a smaller market, so profits per user need to scale accordingly.




Completely different.

To put the article another way, there are two ways to make big money:

* Make lots of money per user

* Have lots of users and have low expenses.

No-man's land is having a £1 app that you will never realistically get more than 5,000 users on.


Does method 1 even exist for consumers? Small businesses, sure. But apart from a few gold mines like TurboTax its hard to get consumers to spend any money on SaaS.


Dropbox, Flickr, Apple, etc-- all sell to consumers with a high ARPU. Also, cell providers, insurance companies, car companies, etc.

Good rule of thumb-- anyone who advertises heavily to consumers has a high ARPU.


Dropbox is probably the best example for an app that scaled charging consumers


Sure it exists. Have a services that is free to use but includes charges for one particular highly desirable function. One example is a game with in-app purchasing of new levels, character wardrobe, etc.


evernote, dropbox, rescuetime, pandora, spotify all beg to differ


yes, you find this quite a bit in e-commerce but agree on SaaS




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