from the sounds of it - the marketing wasn't paying off, at least not in their opinion.
They probably looking at the conversion rate from free to paying customer.
If 99% of all free users are happy with the free version then they need to remove features from the free version or remove it altogether. Or adjust their business model.
The marketing is of no value if it's successful, but only ever generates "customers" using the free version.
A lot of SaaS companies are run on venture capitalist money though and generates no profit, only losses. But that can never go on forever. But some have deep pockets. I think it took Spotify 10 years to have their first quarter that was not in the red. On a yearly basis they still never have been profitable.
Yeah that kind of crap is some thing I simply do not understand why the investors continue to pour more money on that fire. Just see that money burn
Spotify has nothing on Uber. Uber looses money on every ride still. The business model was setup to take advantage of driverless vehicles, and that's taking longer than they expected to happen. In the meantime, they keep getting the funding to continue operating.
Now this is somethign I also don't understand... Are we assuming the cost of the drivers AND administrator/IT staff for the company cost more than the app brings in? that just seems like a crazy idea.. but yet I know it must be true... I wonder what make their costs SOOOO expensive? is there that much need to continue updating the app, are the servers needed to keep the platform running THAT expensive?
For Uber, the app cost is trivial. Even if it is $50m USD a year, that's nothing in their revenue. Their costs are around payroll, payment processing, legal teams, marketing, market creation, insurance, etc.
Think about trying to make Uber... it might cost you $100m USD just to convince a single city to let you use your product there. The BIG money is in getting the laws and regulations changed to let you exist. The actual app and driving of the cars is background noise to them.
oh yeah - I keep forgetting about the requirement to buy off cities, etc to allow the thing to happen... good point.
And they keep having to enter and leave markets. All that startup cost and advertising and loss leaders, then they limp along for a year or two, then the city decides to make a competing service and kick them out once Uber paid to develop the market. It's rough.
I don't feel this is something cities should be able to do... if you can legally have the business - they they shouldn't be able to stop you....
the whole taxi aspect - selling medallions, - what a raquet!
That's the thing, they stop you by changing if it is legal for you to have a business. That's the problem with government, they change "what is legal" whenever they want.
I want to down vote this because of the gov't, not because of your post 😞