Andreesson and other Silicon Valley VCs have chimed in warning on the growth of vacuumous business models built on hype and hope.
My own lesson from surviving the GFC in Silicon Valley was the sooner you work on the hardest issue of all, what it takes to get a customer to pull out their credit card, the better off you and your investors will be. The day investment sentiment turns is the day you need to be viable. For most SMB entrepreneurs revenue is fundamental but Startup entrepreneurs think they can out smart that fundamental. Some do but for every one that does thousands vaporize. A proportion of those could have done it better and become viable businesses.
GoPC moved away from a Freemium model straight after the GFC. I remember meeting the CEO of Gh.o.st in 2009 when they had some 700,000 subscribers. I asked him how they were monetizing and he told me they had ideas but being funded by Sequoia Capital this wasn’t urgent. The following year they ran out of funds and were shutdown.
We actually tried a Freemium model again in 2013 with Rainmaker. Consumers were able to get a complete virtual machine free and simply pay for add-on applications and storage. We finally accepted that Rainmaker should just target SMEs, not consumers. They have much deeper pockets and real IT problems that need to be solved. I’m happy to say its working.
And this month we just starting trialing another consumer play with a new technology product called Raindrop, but it’s monetizing from day one. http://raindrop.gopc.net.