Profit fuels progress. And profit is an indicator that what you are charging clients is the right price for building a service/product. You have something to show for your efforts without needing any investors to foot the bill in the hope of sharing in the future riches that may or may not come.
No one will miss Cred when it eventually dies. Except the fools who pump money into building it thinking everyone will capitulate to Cred’s service. Which to be honest, I still don’t understand. There will always be a way to pay my bills without Cred. And it will be free. I still use HDFC’s perma-cluttered and dated interface to pay my credit card bill. My bills are puny enough that i get like 600 bucks off once a year in some cash back. So maybe i am not Cred’s target audience.
The silly rational behind the billions pumped into building Byjus, Cred, Educomp, Flipkart, Cult and every other silly, dispensable service is straightforward: they believe that they are building something exceptional that clients will eventually pay a premium for after the funded company manages to kill every other service or product with their subsidised pricing that does not factor for the actual cost of building the product.
They really believe they have a moat. But if history has taught us anything it is that once you get a customer, especially Indian, used to paying next to nothing for a service, they will be unwilling to suddenly pay for that service.
They will uninstall the app and move on to the next best thing in a heartbeat. This is true for profitable businesses too. If I jack my fee up by two-fold, my clients will bail on me. They will find the next best thing for a reasonable price.
And it’s delusional to think that q-comm, e-comm and payment apps have irreversibly changed our behaviour. If those companies charge us a silly enough premium for their service, there will be more local grocery stores to compete for your wallet. And if the UPI chaps suddenly charge us a whopping convienience fee, it’s a sure thing that we will flee to cash again.
Cred might be the most efficient way to manage your payments.
But the question remains if you as a consumer had to pay for it, how much is it worth to you?
As Steve Jobs asked of Dropbox, is it a feature or is it a product?
Or is it something built with the sole intent of having a HDFC acquire it at some point when the latter realised they will never be able to build such a widget in-house?
Or is it something where the tap is suddenly turned off when the people (investors) paying for the effort to keep the app or service running turn off the spigot.
I can’t make a economic case against Cred. And nor should anyone ever. People should be allowed to burn, snort or piss away their cash any way they desire.
But I have a personal moral and ethical qualm against businesses that have no viable game that allows them remain afloat solely through revenue from users.
Products and services are built for the users that pay for them. When the users don’t pay for it, someone else does. And they are the masters.
We’ve seen this bite us in the ass with Google and Meta. They really don’t care about social cohesion or how your brain develops.
Indian corruption is another example where the lack of transparent pricing and rules winds up creating many a master except the actual citizen who the government serves.
Clarity on who is paying to to create something gives us the focus to best serve that person’s interest. And when profit exists, it allows us to serve clients without interrruption or distraction as long as the passion, drive and talent exists.
