Thread by @paraschopra

Consumers want stuff for free, companies want to pay.

a 🧵

1/ Mark Zuckerberg famously said that there’s no point in monetizing a consumer product unless you have a billion users.

Consumers are habituated to getting digital services for free.

This makes monetization for consumer products very tricky.

2/ Try recalling all the digital products or services you pay for as a consumer.

In all likelihood, there won’t be too many as increasingly music, news, movies, productivity apps, and games are all free.

3/ Businesses, on the other hand, prefer paying.

For consumers, their salary is a cap on how much they can earn, so they can’t increase their monthly costs indefinitely.

4/ However, for a business, if an additional cost helps them grow their revenue and profits, they will happily pay for it.

So, businesses are used to buying expensive stuff if they see returns from it.

5/ In fact, enterprises won’t buy your product if they think it’s too cheap.

The reason behind this is that when a business buys a product, they want it to last for a long time.

6/ Nobody inside an org wants to put her job in line by designing a critical business need around a product that might not exist in a year.

So, if a product is too cheap, businesses will actually be reluctant to purchase it as they fear it might not be able to sustain itself.

7/ Remember 🧠

never make your product too cheap for a business and too expensive for a consumer.

8/ That's it!

I'm posting ~1 new mental model for entrepreneurs every week.

Here's the entire list of 60+ mental models that I'll cover: invertedpassion.com/free-book-ment…

Make sure you sign up for email updates on the book page.