But each added user should not only cover the marginal cost but alt least the average cost. If we disregard that there can be several tiers of users and price models, it might stand to reason that each user at the least on average have to bring in as much money as they cost the service to serve. Many customers brought this up when Maciej Cegłowski had a fixed price model for perpetual Pinboard, he just bushed this off but has since come begging oldtimers for more money. Nothing wrong with that, but it’s tiresome to have the same journey with every service you want to depend on. This is a trait of the VC world of “we figure out profitability after we have all the customers”.

Respectfully disagree. An obligation to maintain a service in perpetuity for no revenue becomes a huge unfunded liability.

What if the app falls out of favor and new marginal revenue can’t cover fixed costs?

What if the business wants to innovate in a way that dramatically changes its cost structure (maybe introduce a feature that requires a usage based license)? Sure you can gate older users but how long do you have to maintain a separate set of features for them?

Obviously it’s the apps responsibility to make a fair deal with users and stick to terms offered. Sure some companies can make a model that amortizes an upfront payment effectively over decades. In reality though, all that really matters to a company is new cash that pays expenses. If you’re not contributing to that at some point you are no longer the customer.