A cash flow problem in the cloud..

About technology, business & management issues..

Following the  very first companies offering services such as web apps or e-business through the cloud, the first problems of the business model began to emerge to the surface.

As a fact the American market has a strong stock market and vast amounts of venture capital. Many investors eager to invest in technology companies began to dictate the rules of business model: the first rule was to have money hand over fist.

With the promise of capturing major market segments, venture capitalists gave large amounts of money to companies for marketing spending and its market positioning. In many cases the product or service was not yet finished, much less proven. The latter caused a significant resource investment in the first months of lifeblood of the business thereby sought to profit long term.

Many argue that this only caused a distortion in the market that eventually provoked the downfall of many companies that had no solid foundation to succeed in the market.
In either case, these guidelines prompted one of the very first premises in technology industries which has cast strong roots in the subconscious of the leaders of the tech industry: give away the product or service initially and then cash for it.

The latter created the concept of the free trials and freemium services within any tech company, mainly driven by Web 2.0. current trend. While the main idea was to get a significant number of users and then make them fall in love with your product and keep them indefinitely and then convince them they now had to pay for what they had been receiving it for free. Now it was a financial problem.

While it makes sense that many companies invest massive amounts of money on advertising and then offer their services free for a while in fact this model does not make sense for other companies.

Like any other business, the business should focus primarily on generating revenue and become profitable in the shortest time possible. Any other statement would only be playing a fools´game and basically only cause a distortion of the market that does not help the industry or  customers who expect a solid product and a sustained customer service.

Is taken into account to understand the concepts and develop business models that other companies in other cultures and contexts have previously incurred. However, should always be a framework to adjust in order to suit the reality in which one develops.

Regardless of this globalized world, it is difficult to get by the dogmas created in another situation, in another context.

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