>Maybe it’s the amount of customers a company has, or the speed at which that customer base is growing. Business dudes like to call it traction, but I’m not sure whether they know what they’re really talking about. I’m not even sure if they know what they’re talking about. Regardless, whatever traction may be, the minor problem is that, well, having traction doesn’t magically make your company profitable.
People wondered how Google and Facebook will going to be profitable with billions of users and gaining no money from those users. There's always going to be a way to convert users into money.
Many companies are trying to grow at first and then find a way to monetize the user base.
There's however not always going to be a way to convert users into enough money. During the dot-com boom, the VC's who invested in the company I co-founded around that time pushed us to switch from planning to charge for our service (vanity e-mail accounts) to offering them for free to attract users, driven by the greed of seeing pre-revenue companies in some instances acquired at a valuation of up to $4,000 per user before the bubble burst.
We stupidly agreed (everyone understood the $4k per user was a crazy aberration, but it triggered thoughts of "but even if we get to just $400 per user fast enough to get acquired...), and ended up selling off that service a year and and a half or so later for a pittance after pivoting (we did the ".name" top level domain, which was not a great money maker either - was eventually sold to Verisign and I got a little unexpected cheque years after I'd left, but nowhere close to f-you money), but the point being that there were a whole lot of companies spending far more on acquiring users at that point on the basis of crazy per-user valuations than there was any realistic way of earning back.
So, yeah, you can always convert users into money, but that doesn't necessarily mean you'll be able to convert them into profit.
People wondered how Google and Facebook will going to be profitable with billions of users and gaining no money from those users. There's always going to be a way to convert users into money.
Many companies are trying to grow at first and then find a way to monetize the user base.