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Money

July 5, 2021

Placemark will be a product that costs money, sold by a business, when I eventually merge that PR and swap those DNS records. To make that work, I’ve been thinking about how pricing, what to sell, and how many people would need to sign up for it to be viable.

It’s important to think about this kind of thing, just enough. I won’t regurgitate the theses in full, but startup land has validated a few forking paths of making money. You can go upmarket with enterprise deals worth $10k+ carefully sold to clients. You can do this before even building the product, to validate the idea. Going way downmarket and working out a ratio of advertising spend to total lifetime value and hoping that scales with an injection of investor cash. Or you can take a long-shot view and work in a problem area so fresh and unexplored that it might be worth billions, and raise a large round of funding based on that small chance of winning a big prize.

It’s gauche to talk about these things in public. So many times I’ve seen a company, read the marketing, seen the pricing, and had absolutely no idea how it remained solvent. Usually a two-sided market, some huge customer, or a big round of funding.

Anyway, I’m not a business genius (investors reading this: I am a business genius).

But first, what I’m starting to think is that a lot of the business strategies are maximalist. Optimizing purely for known results produces boring results. If we wanted a medium time commitment and steady cashflow, why not buy a chain of car dealerships? Aiming purely for a moonshot opportunity gives you stuff like SonicEnergy, which is a literally impossible idea that nevertheless raised $53 million dollars in funding.

What these models are maximizing and minimizing is certainty. You can have high certainty of success (usually with muted rewards) or low certainty of success (with a massive payout if you nail it). This drives toward irrational moonshots and hyper-rational lifestyle businesses.

Let alone how these models are purely financial. And of course they’re purely financial, these are financial models, business models. But if you think about them too long, if you make the mistake that I do and drown yourself in reading about them, then you start to forget that you’re making a thing.

It’s almost shameful to think about making a thing as the purpose, about caring about pushing a space forward and improving technology. Innovation is an output of finance, not an input, maybe. Innovation isn’t doing very well, but the economy’s still doing great.

I want to build a thing and build a business around it. So the question becomes whether one can consider non-economic factors, like liking a problem area or wanting to create something great, in that process. The answer might be no. Or the answer is that the non-economic is reflected in the economic - someone’s like of a thing motivates and informs them on that topic, and makes them more likely to succeed.

I’m not sure which it is. I’m figuring this stuff out.

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