Summary
In this episode, Sean dives into the difficulties of monetizing a B2B SaaS product or free software based on Reddit’s struggle. The social media giant is attempting to improve their economic and financial performance, which includes charging for third party access to their data. However, this has sparked controversy and backlash, with the popular mobile app Apollo protesting due to their inability to afford the proposed charges. The situation has led to temporary subreddit strikes, locking out access, and creating a potential loss in revenue. The lesson learned here is to establish proper fundamental economics and profitability early on in building a software business.
In this episode, Sean dives into the difficulties of monetizing a B2B SaaS product or free software based on Reddit’s struggle. The social media giant is attempting to improve their economic and financial performance, which includes charging for third party access to their data. However, this has sparked controversy and backlash, with the popular mobile app Apollo protesting due to their inability to afford the proposed charges. The situation has led to temporary subreddit strikes, locking out access, and creating a potential loss in revenue. The lesson learned here is to establish proper fundamental economics and profitability early on in building a software business.
Key Points
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- Reddit is struggling to become profitable despite generating decent revenue.
- The company is proposing charging for third party access to their data to improve their financial performance.
- The popular Reddit mobile app Apollo is protesting the proposed charges due to affordability.
- The situation has resulted in temporary subreddit strikes and a potential loss in revenue.
- Establishing proper fundamental economics and profitability is crucial in building a software business.
- Companies like MailChimp have never raised VC funding and are still highly profitable.
- Monetizing a B2B SaaS product or free software can be difficult without proper economics.
Quotes
- “They’re trying to figure out how to improve the economic and financial performance of the underlying business.”
- “If they can’t afford it, then that functionality may go away.”
- “Be careful what business model you are leveraging, especially when you’re getting started.”
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