What’s the best way to monetize?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The First Law Of Internet Physics – AVC

You can extract a higher average revenue per user (ARPU) from a paid model, but you get so many fewer users that it’s better to extract a lower ARPU with a free model and get many more users. The rule: many users * low arpu >>>> few users * high arpu. I guess a corollary is that you can implement a freemium model on top of a free model and turn some of your users into high ARPU customers, but they will always be a small portion of the total numbe… (read more)