If he's using PayPal's micropayments pricing (Fees = $0.05 + 5%), he's made just shy of $12,000 on the site so far.

I can't decide what I think about that number, except that I expect it goes farther in Romania.

One of the wonderful things about being a small business on the Internet is that there are several favors (SEO considerations, viral marketing, word of mouth, network effects) which make double-digit YoY growth practically a given. (You are more or less incapable of saturating your market, something that larger businesses have to worry about -- what does Facebook do after signing up nearly every American who uses a computer regularly?)

If you keep at it, the miracle of compound interest will do all the rest.

Compare that to a more traditional day job, which typically gives you a higher starting salary and then increases at 2 to 4% a year, with SHARPLY limited options for ever getting out of that bracket no matter how good your performance is.

Well, if the price gets to $40, he would have roughly 40,000 users. That's roughly $800,000 in gross revenue. (20,000 * $40.)

Assuming the operating costs are low, this site could bring in a life changing amount of money for one person.

Edit: It's interesting to think about whether he'd make more money with the price going up logarithmically.

The practical effect of the money + cheap location is that it gives me a few months of development time that I can pour back into the site. It's more of a bootstrapping technique than a straight-up scam.

This payment method is doomed to fail.

Once it goes over $10, maybe $20, it's dead. No growth. This is NOT one of those "everyone is doing it" kinds of services.

After this, their only hope is to turn to the current active user base and start all over at $0.05 and make it a mandatory subscription payment instead.

Reason being: once it reaches the "it's not worth it" threshold, a new clone will pop up and there just won't be any reason to use pinboard. At all.

I have better idea.

You could lower the price day by day when nobody registered and raise again if there were registrations in last few days.

It helps to read the article and verbiage on the website. For one thing, this method has apparently raised money roughly comparable to what one would get from Y Combinator at no cost in equity - i.e. enough to bootstrap the development of the subscription features.

I would love to give this as a try as an experiment for a social news site for technology. "Digg without the 17 year olds in mom's basement"

I'm considering it for a side-project I'm working on now -- but, man, it's so hard for a site to gain traction even with free accounts, I'm not sure I have the stones.

There were people who joined Pinboard who told me they never would have considered using the site had it been free.

The fact that there was an actual funding model (however offbeat) helped convince them that the site was a serious effort.

Try building something which provides value even if you're the only person using it. (I have always admired Delicious for this. If every other person on it died tomorrow it would still be an excellent bookmark manager.) Then you don't need "traction", you just need more customers tomorrow than you have today. Repeat times a few hundred.

Agreed. Plus, if you build something that you would still use even if no one else did, you're guaranteeing that at least one person wants to use what you're making. Doing otherwise is surprisingly common, judging by some of the products out there.

The reality, of course, is that you aren't a unique snowflake; lots of other people are like you, and if you really like a product, chances are someone else will too.

It wouldn't be the easiest thing in the world, but like anything, you start with a niche userbase.

Please do.

create a paid social news site like described above?

Yes, I'd sign up almost immediately.

Try MetaFilter

I was considering doing something like this for a site I made one weekend for myself and my friends: limited spots. 5$ a spot per year, 1000 spots only. In the end I couldn't be bothered setting up the payments because it was not really worth it for small change, so now I just host it on our internal network.

Pinboards pricing strategy might have worked better - great idea!

This is something like we did with 200nipples.com (t-shirts that start at $1 - my buddy build an amazing shopping cart for it). It's always fun to watch the mad dash for the first few shirts