dontfiremepls

We want to build a new car. A fancy electric car. We raise money from investors, build plant, hire engineers, designers and workers, establish a supply chain and a distribution chain. How should we fairly price the product?

A. $0 for the next 10 years. We've got really rich investors.

B. $X0,000, in line with the fair market price for a new vehicle.

The role of capital money is to cover capital expenses (duh), especially in the early stages, not to subsidize selling the product at a dumping price for a prolonged time period.

We are going to lawyer this, aren't we? The service was promised for free, not per photo storage. The expectation is that the service will continue to be free. From what you're saying, (most of) the future use of the service, which consists of uploading and storing new photos, will be charged.

Velvet gloves dumping.

Because it's anti-competitive dumping. The dirty secret of SV is that it's an enormous dumping scheme: burn billions of dollars of money to offer 'free' or goods and services, gain a dominant position in the market by driving the honestly priced competition into the ground, then jack up the prices and fleece the customers. Uber is the poster boy of this strategy, but it's not the only one.

The honest approach would be to either grandfather existing customers at the promised price point ($0) possibly at a loss, or shut it down and offer a one-click migrate-my-data button and empower customers to shop around for the price / quality tradeoff they are willing to pay for. Of course, that will never happen, because antitrust in this country is toothless, paid for by the exact same corporations that engage in anti-competitive behavior.