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Chris Hopf

Appreciate the post Tom, well done.

Startups need to be completely honest with themselves about the realistic potential for their solution to generate a profitable return that is sustainable.

Is it a business or a hobby/charity ?

Sure, there may be "customers" out there who like your solution . . . but will they actually pay for it? If yes, will they pay enough to sustain a profitable business.

Even in beta, and even if taking the freemium approach, you must communicate the value and benefits (not just features) from the very beginning.

Examples: Twitter has created value but no reference pricing (they should have launched with at least three offerings, even if one was free and two were just there for future reference), while Producteev has reference pricing (nicely done) but questionable value.

We'll see how both play out. :)

Tom Karlo

Well, although I agree that it's problematic that Twitter hasn't found a monetization model, I also think it's a red-herring to use a service like that because its popularity is so freakishly large. Any site that gets that kind of traffic can probably muddle its way to an after-the-fact monetization scheme (see: Facebook.) But for more normal sites (of the size that would represent the other 99.9% of successful outcomes) that don't have remotely as much traffic, not having a well-defined monetization scheme is a disaster at more common "successful" traffic levels.

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