I don't understand why this is supposed to be a bad time to monetize through the customer. Maybe it's bad if you are relying on getting advertising revenue from indiscriminate advertisers in the mass market, but....
We're doing something consumer focused and are close to breaking even on content costs after about a month in beta with less than 500 users. We're planning to increase our ad spending significantly, and I couldn't care less if our customers spend less money overall as long as we are their best option for the product we sell them.
I could see this being a problem if you have to position yourself as a cheaper, better alternative to established competitors to survive, but the issue there is more about branding than business model; can you move from being a low-cost play into being a premium brand if you need to cut revenues to compete in a crowded market?
Just build your product into the best product it can be and you'll change the market. Let others worry about competing with you and focus on giving people tons of value for the money they give you. As long as the market exists, you'll do ok.
Our problem was really that we were a "vitamin": something that was kinda-sorta-tangentially-useful, but didn't solve a clearly-defined, pressing pain point. Which is really my screw up and not the economy's fault, but the point is that a strong economy can mask these problems ($500M valuation for Slide?) and let entrepreneurs get away with startups that really shouldn't exist.
I suspect that there are still many entrepreneurs in a similar boat - as recently as a month ago, there were "Critique my startup" posts that presented startups that really weren't all that useful, and YC has funded a couple that in their present form are pretty weak.
We're doing something consumer focused and are close to breaking even on content costs after about a month in beta with less than 500 users. We're planning to increase our ad spending significantly, and I couldn't care less if our customers spend less money overall as long as we are their best option for the product we sell them.
I could see this being a problem if you have to position yourself as a cheaper, better alternative to established competitors to survive, but the issue there is more about branding than business model; can you move from being a low-cost play into being a premium brand if you need to cut revenues to compete in a crowded market?
Just build your product into the best product it can be and you'll change the market. Let others worry about competing with you and focus on giving people tons of value for the money they give you. As long as the market exists, you'll do ok.