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“The easiest way to make $1,000,000 is to convince 1 million people to give you $1.”

This was long before $0.99 apps on the App Store, but Dad was right. He also knew that it was easy to prove $1 of value and there was a low threshold to purchase. Brilliant. Our subscription platforms work like this too.

Source: Quora

I didn’t understand the meaning of “it is easy to prove 1 dollar of value and there was a low threshold to purchase”

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It's not a very clear sentence, but it means two things:

  1. $1 is so little money that it's easy to show that amount of value. This is directly referencing the million people donating $1 each-- it was so little money to each of them that someone (presumably Dad) could easily provide something that they would each pay $1 for, and it wouldn't need to be much.

  2. "low threshold to purchase" is less clear. My read of this section is that it didn't require a lot of effort, thought, or convincing to get each of those million people to give a dollar. For example, I have am pretty likely to buy a candy bar I see in a checkout lane at a store for $1-2 (often referred to as an "impulse item" when sold this way). However, I am less likely to buy a car, even if I can easily afford it. So I would say I have a higher threshold for purchasing a car than I do for a candy bar.

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Let's say I want to sell you something for $100, like a front-row ticket to a baseball game or concert.

In order for this transaction to happen, we would need two things – otherwise, you'd opt to pass up the offer:

1) You would have to be convinced that the ticket (or, perhaps another way to say it, the experience of going to see the event) was worth $100 to you.

2) You would need to have the funds available. In other words, you might be willing to pay $200 to go to the event, but, if you only have $50 left in your bank account, you might have to pass up the offer, even if you were convinced it was a great deal.

Near as I can tell, the sentence:

It was easy to prove $1 of value and there was a low threshold to purchase.

is touching on both of these economic ideas, saying that they are both easy to achieve because the amount is so low:

  • Easy to prove $1 of value means it won't take a lot of persuasion to convince you that whatever is being sold is indeed worth the token amount you are paying for it.

  • a low threshold to purchase means you don't need to have a lot of money in the bank in order to buy something at such a low price. Only the truly destitute and penniless would be prohibited by cost.

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