Comment by sjducb

Imagine it costs $3/month to provide the service to a customer and the customer is paying $3/month.

You can make a good case that most of your costs are fixed. So that if you have 100x as many customers it’ll cost you $0.03/month to provide the same service to the customers, but they still pay $3/month.

You need VC money to acquire customers and grow. Then your business will become profitable because of the economics of scale that are inherent to software.