On the other hand, I regularly send text messages on my phone without much though given to the crazy $0.15 per-message fee.
I created Stuff To Do (stufftodo.dedasys.com) as something we needed for work, but on my own time, so I decided to experiment with it a bit. I came up with what I thought was a pretty good separation of pay/free versions: the group-enabled version costs money because if you're working in a group, you're probably in a company, and companies have money...
However, it is also a space that's got a lot of people in it, and while I think I have a few compelling features (the time tracker is the easiest out there) free is tough to beat.
Not sure what I'll do with it, because it's not really the sort of application that lends itself well to advertising (I'd find it pretty annoying to have ads on my todo list).
Multiply the increase by the amount of users that receive it and the number doesn't seem so small - and can never be considered 'no cost'. The trade off is that with the more mail they can index per user, the more relevant advertisements they can display and the more people they can lure with their gimmick. Of course, they're also taking advantage of the 10% rule when it comes to offering that large amount of storage.
The fact that it saved me time and thought thinking through healthy meals was what got me to pay. And it made me realize also how few web apps actually end up saving me time in the end (which is the make-it or break-it factor for me, but I realize probably not for others).
So here's my question- what web apps have you other news.YC'ers ever actually paid money for? Any?
I think we're on the verge of a new form of web advertising. One that works, actually makes money, and isn't annoying (like flashing banners). Google's way is a good start, but we need something revolutionary, and once it happens I think the question of whether or not users pay becomes futile.
The one issue with this is that it smacks of dot-bomb "Build it and they will come" thinking.
Although a few leaders will emerge, I don't think it's a viable theory for most start-ups. You're better off lowering your expectations and sharing a piece of a smaller pie.
Of course, VC's don't like that thinking too much.
Sobering quote: "The biggest gap in any venture is that between a service that is free and one that costs a penny."
