On the one hand, the introduction of payment scares away part of the audience and reduces coverage. But on the other hand, it is commercialization that allows services to stay afloat in the long term, develop and provide users with better services.
Vladimir Okhotnikov in his article provides many convincing arguments in favor of stage-by-stage monetization and refutes the widespread stereotype that this supposedly “betrays the user’s interests”. Moreover, the author proves with specific examples that the vast majority of successful projects were initially launched as free, and only then introduced paid functions.
This research will be an important starting point for both large investors and ordinary users. Through in-depth analysis, they will be able to gain a realistic understanding of the new industry and determine future strategy.
There is a fine line between greed and monetization – Vladimir Okhotnikov
As a clear example, the article cites the fate of the once popular search engine AltaVista. Despite the impressive technical characteristics, the company was unable to monetize its product and eventually went bankrupt.
“In the 90s, AltaVista was considered one of the fastest and most efficient on the Internet. The system was based on a powerful computing infrastructure: dozens of 64-bit DEC Alpha servers capable of processing millions of requests every day. The total RAM capacity of these machines was 130 gigabytes, and the hard drive capacity reached 500 GB. Such characteristics made it possible to store several billion text files, which was beyond the realm of possibility at that time,” recalls Vladimir. “These are truly fantastic numbers. However, the lack of a commercial component did not save the company from bankruptcy.”
The author puts successful projects of the past and modern metaverses on a par. He argues that lessons need to be learned from this. According to Vladimir, even the most promising product has no chance if it does not make a profit. When users pay, companies have an incentive to improve service and provide customers with the highest quality product.
According to Vladimir Okhotnikov, monetization makes it possible to support free versions of products, making them more accessible to a mass audience. However, the author insists on maintaining an optimal balance between commercialization and altruism.
How Instagram was born from a whiskey lovers app
Vladimir Okhotnikov’s research will push many to take decisive action. In his article, he shares the history of the creation of one of the most popular social networks in the world.
Initially, the founders of Instagram developed an application called Burbn, aimed at whiskey connoisseurs. It allowed you to share the location of bars and restaurants, as well as post photos from there. However, over time, the developers discovered that the check-in option is practically not used, while the photo section is very popular.
Vladimir witnessed the birth of a photo application without unnecessary bells and whistles. This is how Instagram appeared in 2010, which attracted 25,000 users on the first day. Two years later, Instagram acquired Facebook (now Meta) for $1 billion. Well, today almost 900 million people visit this social network every month.
As expert Vladimir Okhotnikov notes in his article, the reorientation of the Burbn application to Instagram was not an accident, but a brilliant marketing decision. The developers were able to read the mood of the audience in time and adjust the product concept in accordance with real demand.
According to the author, if this had not happened, then most likely we would never have seen Instagram in the form in which we know it now. Perhaps another photo sharing application would be born, but certainly not as large-scale or popular.
Finally, Vladimir Okhotnikov in his article cites a couple more cases as examples. You will learn how the unknown streaming platform Justin.tv grew in value to $1 billion in just a few years. Or how a simple student Alan Shaw, without any special programming knowledge, managed to create a service that was later bought by Reddit for $40 million.
Vladimir Okhotnikov
Vladimir Okhotnikov is an analyst, author of journalistic articles, with a deep understanding of the mechanisms of economics and trade. His skills allow him to successfully identify trends. He shares his experiences with others to help them make informed decisions in the world of investing, business, and cryptocurrencies.