Ad-Supported Business Models Are Unsuitable for Early-Stage Startups
Eric Feng · 20VC: Kleiner Perkins GP, Eric Feng on How The Best Funds Use Tech and Data To Find Companies, Why Entrepreneurs Start The Fire and VCs Add The Rocket Fuel & Why Consumer Is Harder Than Ever Today · Jul 3, 2017 · at 17:12
Eric Feng, General Partner at Kleiner Perkins, explains why early-stage consumer startups should avoid ad-based monetization and embrace transactional revenue models.
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“Advertising just takes an immense amount of scale, and you get incredibly low ARPUs because It just requires hundreds of millions of users to actually build a meaningful ad business these days. So that's really hard for a startup to have to rely on that as the only way to make money.”
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