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And yet, $300M is only 1.25M subscribers at the current $20/mo rate. If we say that they need a $1B / year to be comfortably profitable, that's ~4.2M subscribers. A good rule of thumb is that you can hope to convert about 10% of your free user base to paid; one random source says they have 100M monthly active users - which at 10% conversion, is $2.4B / year. I think they'll be fine.

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10% is insanely high conversion for B2C freemium. It’s closer to 1% for most products.

Does GPT-4 look like 'most products'?

You are talking about a revolutionary product that literally dominates mindshare from consumers to students to CEOs to governments. Its a pure monopoly that has insanely wide utility and instantly obvious value proposition.

Do you know anything about B2C freemium products? 10% conversion over 10s-100s of millions of users is literally insane.

It doesn't matter how revolutionary GPT-4 is, people's willingness to pay for anything is generally very low. ChatGPT premium is also a very expensive subscription for a consumer product!

People are willing to pay $10k a year for college, very high conversion rate. People are willing to pay for tutoring, at rate that's probably about 10% of student base, despite its very high costs ($50/h, not $20/m)

At the very minimum, I can already see every university and high school student paying for GPT-4. Its a way way way more powerful essay writer and personal tutor than GPT3.5, that alone is incentive to upgrade. For only $20 a month.

Know what GPT-4 currently is insanely capacity limited. So far, the limitation is not on the demand side, but the supply side.

Getting 100 million users in 3 months with 0 marketing or network effects already annihilates existing records, getting 10% conversion is nothing special.

The cheating sites I see on the first page of Google seem to charge around $10-$30/page. GPT is cheaper, but lower quality. I don't think the market for tens of dollars cheaper but shittier quality than buyessayfriend.com is anywhere near every highschool and college student.

You could have saved yourself and everyone else the time by instead writing “I have no idea what I’m talking about and I don’t understand constraints”.

https://twitter.com/visakanv/status/1113154447050334208

Look what happened to image generators, no one talks about Dall-e or whatever that was.

How much money will they spend servicing requests for those 4.2M subscribers?

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