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"So, while many applications might have very high fixed costs (like paying people to create wonderful applications like those in 37signals portfolio)"

This isn't a fixed cost. Consider apps A and B. Both are exactly the same featurewise. A has 100k users and B has 100 million. B costs a hell of a lot more to create and maintain.



Does it cost less than 1000x more? Because if it does, it's worth it.


I believe the point was simply that the cost isn't fixed. It rises in hardware costs, storage, bandwidth, labor, etc. with a user base. It would most likely be very much worth it to have the increased user base. But the profit/cost isn't a fixed ratio.




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