Comment by EmiDub
How is the number of users a moat when you are losing money on every user?
How is the number of users a moat when you are losing money on every user?
Not according to the FT and Ed Zitron:
https://www.ft.com/content/fce77ba4-6231-4920-9e99-693a6c38e...
A moat involves switching costs for users. It’s not related to profitability
The idea is war of attrition and then as your potential competitors run out of money and it costs too much for a new entrant, you raise your prices to be profitable and/or enshittify your product.
Inference is cash positive: it's research that takes up all the money. So, if you can get ahold of enough users, the volume eventually works in your favour.