Millions of users without making a buck – Should it really be that way?

Disclaimer: I'm the CEO of Licensario, a company who targets to build the ultimate solution for monetizing your application. The following cases are examples to where there is a need of finding a source of revenue. I wrote this post after attending a great meetup in order to start a discussion which companies in the same situation could learn from. This is not by any chance an attempt to market Licensario.

A few days ago I heard the CEOs of Viber and Soluto – 2 of the most promising Israeli startups – speak about their companies and how they got from 0 to millions of users. I put millions of users in bold in purpose. Not because it's surprising that such products are used by millions. That's not surprising at all. I think they got excellent products and great people are working on those products. It gets just one glance at Soluto's UX to understand that you want their creative department to work for you. The thing that amazes me the most is what these 2 companies share. Them and many other companies. Millions of users and no income. Zero. None. How can it be? How can such successful companies with brilliant people, millions of users (active users), VCs backing them are not making any money? Can we even call them successful if they're not making any money? Can a company with no clear notion on how it's going to make money should even exist? Should a company exist if the only revenue they can see in the future is an exit?

I know that some readers might raise an eyebrow at this point. They will definitely start quoting all the experts they read that said that in the beginning you shouldn't worry too much about how your product will make money. I partially agree. I won't get into why I don't totally agree. This deserves a whole post. I'll just say that businesses purpose is making money. More raised eyebrows here for sure. Let's just say I'm in the entrepreneurship business in order to change the world like any other entrepreneur but a business, as an entity, should make money. Anyway, I'm not talking about starting companies. I'm talking about established companies. With millions of users.

When these companies were asked the difficult question "how on earth are you going to make money?" the audience got answers like "sell extra features, charge enterprises for our service etc.". What can I say, I wasn't too pleased with the answers. I don't know if I could give better answers but I do have some suggestions.

Let's take Viber for a second. Viber offers free calls and text messaging. From what their CEO Talmon Marco told the audience they have 45M active users. Amazing number. I think that Viber exists 2 years. So, 45M active users after 2 years. Clearly a number every entrepreneur will love to see after 2 years of operation. It means they have a great product. A lot of people love it and remember to use it every month. I've got a revolutionary suggestion. Start taking money for your app. I know it's a big risk but let's imagine for a second. Let's say Viber will charge 10 cents for their app. Even for their existing users. No doubt, some people will stop using their app. Let's say they'll lose half of their users. this leaves them with 22.5M users which turns out to be $2.5M coming into the company. It sounds better than $0 but there is still a problem with that model. Viber wants a monthly revenue stream. What if Viber charged their users 10 cents per month? The immediate conclusion one makes out of this kind of decision is that they will lose a lot of users. How many? 80% of their users? 90% of their users? All of them? Viber was able to engage millions of users to use the app every month so it's reasonable to assume  they will stay with at least 10% of their users. This means 4.5M active users, $450K per month, $5.4M per year. I think that's better than not making money at all. Another thing that might be reasonable to consider is that for a user to use Viber depends on if her friends are using it. So, if most of her friends were willing to give it a try the first month (it's only 10 cents per month!) she will also give it a try. And if her friends are using it, their friends' friends are using it and so on.

Surprisingly, my suggestion for Soluto is the same. Charge for your service. Why charge only enterprises? Soluto got a great product with an amazing user experience. With Soluto it's easy for you to be the only geek around (or virtually around) that knows about computers and how to fix them. Soluto's CEO Tomer Dvir's answer to how are they going to make money is that if you have up to 5 computers you help to in your network it's free because it means you are a personal user. If you have more than 5 then it's a company and they will charge for it. Why not charge personal users as well? What if Soluto decided that if someone wants remote access to her computer for fixing purposes she needs to pay 1$? I bet that most of the people will pay. Why not, it's much cheaper than calling a technician. They can even start a network of Soluto technicians that people will give access in order to fix their computers. Some of the money that the ones getting the help payed will go to the Soluto technician that helped and some to Soluto (30%, 70% is popular these days…).

Why do companies are so afraid charging for their products? Is it technological difficulties with dealing with charging users and offering them flexible pricing? Is it because people got used to free stuff when it comes to software? Is it piracy that became easier to people than paying? Are they afraid all their users will stop using their product? Maybe it's because the paying process really pisses users off (Apple did a great job easing this issue)?
I don't have a clear answer for this question yet and I'll be happy to hear what you think. Maybe the poll below will help…

Update (October 13th, 2013): I closed the poll. Following are the results. You can also view them in the following link as a chart: I'll write a blog post about the results and about the funny answers I got as 'other'…

The music that made my week – January 18th

Yo yo, how are you people?  It's been a stormy week out here and thus this week playlist will be adjusted accordingly.

Here's this week's playlist for a rainy day link – music for a rainy day

Pearl Jam – Just Breath

Just finished watching the movie Pearl Jam Twenty. As you already guessed I'm a big Pearl Jam fan. You can hate their music, tell they gone too mainstream or you can go Kurt Cobain on them but there is one thing that I think most people will agree on. Pearl Jam is one of the most respectable bands ever. Their pursuit after their fans benefit, the way they always stood up for what they believed in and the way they survived the shitty times they've been through overwhelms me. In the era of instant, where stars are made out of crappy reality TV shows, the era of the Coldplays and Britney Spearses, Pearl Jam is truly a pearl and one can just hope that they will be celebrating 40 so our kids will know how it was in the old world – where music was art.

Sun Kil Moon – Blue Orchids

Sun Kil Moon is another project of the great Mark Kozelek. I just love the harmony of Mark's voice and his guitar playing. Perfect for stormy weather. You can find a great cover of this song here.

Mojave 3 – Bluebird of Happiness

I think I'll start a new section in the posts of the music that made my week. The section will be called: "Put your earphones on, turn the volume to max and float away". It will probably last a week :). Anyway, this is this week's float away song. I've been to a concert of Mojave 3 about a year go and for some reason they performed strange versions for most of the songs. I didn't like it. I like they're album versions much more.

Sigur Ros – Untitled 4

This is taken from the Vanilla Sky soundtrack. Great movie in my opinion.

every passing minute is another chance to turn it all around.

David Bowie – Wild Is The Wind

King David celebrated 65 last week. Where are you David???

That's all for this week. Thanks for reading and like always, let me know what music made your week.

The music that made my week – January 7th, 2012

First of all I want to start by saying thanks for reading my previous post. I got a lot of feedback about my first post ever. One of the things people said was that it's better if I'll give a link to a YouTube playlist at the beginning of the post and not at the end as it will be great to hear the music while reading.

I'm a thoughtful person… This is this week's playlist link –

And now let's go straight to the music that made my week and hopefully will make yours. This week's music is dedicated to some artists I'm going to see this summer.

Pearl Jam – Crazy Mary

This song was originally performed by a singer named Victoria Williams. Victoria is an American singer-songwriter. In the middle of her music career Victoria learned she is suffering from multiple sclerosis. Pearl Jam's cover was part of a tribute to Victoria in order to raise money for her medical care as she didn't have health insurance. This tribute included covers for Victoria's songs from artists like Lou Reed, Soul Asylum and of course the great Pearl Jam.
Stay tuned for a nasty Guitar/Keyboards solo battle at the end of the song.



Radiohead – Where I end you begin

I just love how Thom Yorke move in this video. Just can't wait to see them live. In my opinion, one of the best bands ever.



Red Hot Chili Peppers – I Could Have Lied

Taken from their best album in my opinion "Blood Sugar Sex Magic". The guitarist John Frusciante joined the band in this album after replacing Hilel Slovak that died from (how surprisingly) heroin overdose. John's guitar changed the sound of RHCP forever even though he left the band not so long after he joined because of – guess what? – a heroin addiction.
John won't be at the concert of RHCP that I'm going to see as he recently left the band which makes seeing them a much less exciting experience. Well, I guess it will be great nonetheless.



Eddie Vedder – Rise

Taken from Into the Wild soundtrack. If you haven't heard the soundtrack you should. Quick. Now. Eddie Vedder wrote all the music and it's awesome. By the way, the movie is really good too. The thing that stayed with me from the movie is this line "Happiness only real when shared". Mark Zuckerberg knew exactly what he was doing…



Thom Yorke & PJ Harvey – The mess we're in

I wish I could see PJ in concert this summer. She's one of the coolest women out there.



A few words on a website I like. A lot. thesixtyone is a great place for finding Indie artists and explore some amazing music. Recommended for open-minded people who want to discover music and are tired of the crap commercial TV&Radio sells. Just a taste here. I'll bring some more examples from time to time.


Thanks for listening and don't be shy sharing the music that made your week.

The music that made my week – January 1st, 2012

New week, new month, new year so seems like it's the best time for a new, first ever, blog post written by me. I wanted to do this for so long and I finally have my own blog. I guess it's a first timer excitement. With shortage of time as you grow up I'll probably find myself writing once a year…

In case this will not be an annual experience I'll try to write on the music that rocked my world on a weekly basis. So, without further a due, the music that made my week:

Archive – Again

This 16 minutes mind-blowing song will definitely make you think about relationships with people you love. "You're tearing me apart…", "You're killing me again…" and this kind of suicidal shit and in the end, eventually, can't live without your love "Without your love, You're crushing me inside", "Without your love, I'm dowsed in madness, Can't lose this sadness…". Typical relationship… Just put your earphones on and turn the volume to maximum.


Led Zeppelin – No Quarter

In my opinion one of Led Zepplin's most underrated songs. I'm an old fashioned guy. I still buy, trade, prey CDs. I got Houses of the Holey last week and it just reminded me how much I love this song.


Jackson C. Frank – Blues run the game

Jackson's life story is one of the saddest ever. The man just didn't manage staying out of bad luck. This is his most memorable song. It was covered by many: Simon and Garfunkel, Nick Drake, Sandy Denny and others.


Neil Young – Cortez the killer

Yo kids, studying history in high school can lead to great things :). Some general knowledge: Cortez was Spanish conquistador who conquered Mexico for Spain. Such a powerful song with one of the best guitar solos ever.


Greg Dulli – The killer

I just noticed that 2 songs involved with killers. I promise it's not intentional.
Everything Greg Dulli touches turns into gold. The twilight singers, the afghan wigs, the gutter twins, Mark Lanegan (I'm just kidding on this one, Mark is great). More to come from Greg.


If you want to hear all the songs in this post as a playlist you can check it out here.

Thanks for reading and let me know about the music that made your week.