Essay · About a 12 minute read

Outgrowing Advertising: Multimodal Business Models as a Product Strategy

Connie Chan · Andreessen Horowitz (a16z) Free Intermediate

Chan's piece is the honest version of the ads question: advertising is a real model, but it degrades the product once you are stacking thousands of impressions on people, and it only pays off at genuine scale. She walks through how Chinese platforms layered in subscriptions, tips, and purchases instead of leaning on ads alone. Read it as a starting point for deciding whether ads should be your first model or a later, secondary one.

• Ads get less effective and more annoying as volume climbs, so a single ad based model can quietly work against the product you are building.
• A mix of revenue streams (subscriptions, tips, in-app purchases) often serves users better and gives flexibility a pure ad model cannot.
• Reaching for ads first usually assumes a scale you do not have yet, so charging users directly can be the more honest early fit.