Originally Posted by
pdlamb
Reminds me of kindergarten Econ, where the professor asked the class to bid on apples. Most of us bid 10-25 cents per apple (yes, that was a long time ago), but one guy bid $20 for an apple, which would have maximized the professor's profit.
So maybe the answer is to raise the price to $175 million per year, and make all their money off Mr. Musk's subscription until he loses a lawsuit and cancels his subscription, too.
That concept is
price elasticity of demand, and it's taught in college level economics because it is key to understanding how firms can maximize revenue; and if the marginal cost (cost per additional user) is nearly zero (as it is for Strava), maximizing revenue is almost identical to maximizing profit. As long as the % of lost customers is smaller than the % price increase, they will do better financially. I'll bet that a company like Strava has done enough market research to predict, with a high level of certainty, that this will be the outcome.
Originally Posted by
base2
The real question is: "What does Strava offer that is worth paying for?" Camaraderie? You can get a more meaningful version of that in real life from the people you rode with.
I spent five years living in a small city with NO other cyclists, and so that virtual camaraderie was nice. I've also lived in three different states in the past twenty years, and Strava allows me to keep in contact with some old riding friends. Sure, there are other platforms for this -- but Strava is the one that my friends and I are all using.