Isn't this the classic pattern followed by almost all startups? Create a product that loses money and attracts users. Sustain it with VC money until you have a large number of users who are highly dependent on the product. Then switch to profitability, knowing you can do so because you've already hit critical mass and users aren't easily able to switch away.

You don't have to like it, but it is legal and it is how many of the most celebrated startups got to where they are today.