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Comment by dkrich | Hacker News Reader

Serious question as someone who has never used Telegram and don't know anyone who uses it: what's the plan for sustainability from a financial perspective?

Running the infrastructure for a scalable secure and reliable service like this for hundreds of millions of users has to be extremely expensive. Yet on Telegram's website it says that it will be free forever and will never sell advertisements or charge subscription fees. So is it donations?

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Yes, it is a donation from a rich founder. It says clearly on their website:

>Q: How are you going to make money out of this?

>We believe in fast and secure messaging that is also 100% free.

>Pavel Durov, who shares our vision, supplied Telegram with a generous donation, so we have quite enough money for the time being. If Telegram runs out, we will introduce non-essential paid options to support the infrastructure and finance developer salaries. But making profits will never be an end-goal for Telegram.

Ah, thanks. So the answer is that it's not sustainable. Got it.

Not necessarily. Would you say that a museum or university isn't sustainable because its revenue from goods and services is less money than it spends? If they have an endowment or similar vehicle set up, they can use interest to pay salaries, and other expenses. That's the kind of thing that could be enabled by a single large donation and should be considered sustainable despite a lack of other recurring revenue.

> Would you say that a museum or university isn't sustainable because its revenue from goods and services is less money than it spends?

Yes?

That's why it's being usually run by tax money. A regular flow of funds. Something you can plan and work with.

If they had a lump sum donation of $100M, they could probably safely expect a return of 5% per year on average (many years could be worse).

As long as their costs are less than $5M per year, they can effectively run forever, barring any long-lasting financial depressions (the likes of which we've never seen), or severe financial mismanagement.

This is how many museums and universities operate, and what the above commenter was referring to. :)

Okay but museums and universities also rely heavily on ongoing donations. A 5% annual yield is far from a guarantee. Not to mention that running a tech company is very different than running a museum or local symphony. A tech company has to attract and retain top talent that is very expensive and costs scale with adoption.

Ok, then I'll speak specifically about my local institution. My local art museum gets zero funding from taxes, but runs on its endowment and whatever revenue it brings in from admission, membership, events, food and beverage sales, and merchandise sales. Are they unsustainable because of that?

How is this applicable to what I wrote?

Here is the relevant part again:

> because its revenue from goods and services is less money than it spends

You're saying that a company can't be sustainable if its spending exceeds revenue, but there are plenty of institutions that do exactly that and are based on the same premise as what we know about Telegram's funding. A single (or multiple) large donor(s) can potentially donate enough money to make a thing sustainable without relying on much if any revenue. There are examples of that in the real world.

How many of them did you gave your private secrets?

Not only is Durov's net worth $2.7B, but Telegram just raised $1.7B in an ICO for their cryptocurrency they're launching off of Telegram.

That's the issue.

Frankly, if I could donate or pay to use Telegram and in exchange, it was open-sourced so I could be sure I wasn't the product, I'd have my wallet out in a heartbeat.

The somewhat cynical answer is that it will be around just fine as long as FSB pays for it.

Durov has been singing praises of Putin and Mother Russia right up to the moment he suddenly up and left to supposedly do a "banned in Russia" communication system. It's possible, of course, that he had a change of heart. It's just as possible that these are just theatrics.

Is this not a concern for those trying to sell mass adoption to people currently on other platforms that make enough money to fund maintenance and enhancements forever?

I'd think so.

I think that the spectacle of Russian regulators banning almost all of the Internet but NOT the Telegram a while ago is even more concerning. Or entertaining, if you aren't using Telegram.

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