The Limitations of Advertising as a Business Model

Only 3% of the top 100 YC companies rely on advertising for their main source of income. Advertising businesses need organic virality to succeed, like Google, Facebook, and Twitter. They become popular hubs where users gather, just like marketplaces. Reddit and Twitch, for example, have strong network effects. To build a massive company, it's crucial to remember that using ads as the primary business model is challenging unless aiming to be a top 10 internet site. Overall, the lesson is to find alternative monetization methods.