Comment by pan69
7 days ago
> It turns out the people creating the front end pocket most of the money.
Would you be able to elaborate on this? I don't fully understand this statement.
7 days ago
> It turns out the people creating the front end pocket most of the money.
Would you be able to elaborate on this? I don't fully understand this statement.
You create hotdog / not-hotdog API. It reads an image and returns hotdog or not-hotdog.
You set API pricing at 1.5 cents per image analysis.
Another company creates an Android hotdog/not-hotdog app. They price it at $5/month. Each app user does an average of 60 food queries per month.
You get 60 API calls = $0.9 revenue. Let's say half of that gets used for compute costs. You're left with $0.45/month profit per user.
The company that made the frontend around your API gets ($5 - 30% app store cut - $0.9 your API cut) = $2.6/month profit per user.
Exactly this, thank you!
>> It turns out the people creating the front end pocket most of the money.
> Would you be able to elaborate on this? I don't fully understand this statement.
the economic player with direct contact to the customer "owns" the customer and has a lot of power in negotiation with suppliers. the customer-facing players have the most information about their customers, and can offer adjacent products (want fries with that?)
Uber and Lyft make big money, not their drivers. Amazon and Ebay make big money, not their sellers. McDonalds makes more money than their food suppliers, and franchisees.
The exception is with something like intellectual property, let's use movies as an example. The owners of the content want to sell it widely and will do a variety of distribution deals for different distribution channels. However, if any distribution channel starts taking a big slice of the money pie, the terms of the contract renewal will be changed because without the content they are dead.