The dotcom did get some things right. The internet is a big deal. There are land grab markets. They got timing and lots of other details wrong.
Maybe they will need to have a freemium offering long term to avoid too balance this if they start hitting millions of active users. It should be easy enough to get $5 pm from big users.
They are playing for a big market(s) here. Very big. If bthey are paying to build their name and userbase, it could make good business sense.
We know a lot more hese days. Our instincts are better. We are not cming up with a valuation based on a multiplier of hits. A user of a financial service has a realistically high value.
I didn't say dot com got anything wrong. I'm saying raising hundreds of millions of VC dollars and practically giving it away is a dot com era strategy.
Remember when PayPal paid out a $20 referral bonus for each new customer? Yeah, those days.
No, I'm really not. All I'm saying is it's a similarly audacious, capital-intensive strategy that can only happen in very favorable capital markets.
It's worth looking at how PayPal tried to steer towards profitability in later days, though. They basically became more evil. When paying merchants, they try to trick you into preferring ACH transfers direct from your checking account over using your credit/debit card. The former has weaker consumer protections, no rewards and risks overdraft fees, but lets PayPal keep almost all of their 2.9% + $0.30 fee, since ACH costs just pennies.
Not saying Square is going to become evil. Just saying they'll have to figure out how to break even with it eventually, because right now there's a built-in operational loss that scales with usage.
It's called solving the chicken-and-egg problem by funding one of them. There was an Elon Musk interview about that stage - IIRC they invested/gifted ~100 million (!) in such activities; but this marketing paid back afterwards in billions.
If you say dotcom, the association is over-investing, ridiculously irrational valuation of companies/users/hits, pets.com, bankruptcy, find-the-bigger-fool, etc.
Dotcom days also implies flawed business models that are unlikely to ever be profitable for the company, nevermind investors. I think it was a relevant use of the word considering the point of abalone's argument.
The dotcom did get some things right. The internet is a big deal. There are land grab markets. They got timing and lots of other details wrong. Maybe they will need to have a freemium offering long term to avoid too balance this if they start hitting millions of active users. It should be easy enough to get $5 pm from big users.
They are playing for a big market(s) here. Very big. If bthey are paying to build their name and userbase, it could make good business sense.
We know a lot more hese days. Our instincts are better. We are not cming up with a valuation based on a multiplier of hits. A user of a financial service has a realistically high value.