A technology startup achieved rapid growth by offering its service for free to individual users while charging businesses for premium features. Critics warned that without paying customers, the company was building on an unstable foundation. The company eventually became profitable after amassing 500 million users—its massive user base became valuable for advertising and data analytics, creating revenue streams the critics hadn't anticipated.
The passage suggests that
all free services are financially unsustainable
the company never achieved profitability
critics always accurately predict business outcomes
business models may generate value through indirect channels that aren't immediately apparent
Correct Answer: D
Choice D is the best answer. The company found revenue in ways critics didn't anticipate.
- Context clues: Critics expected failure; company profited through advertising and data—"revenue streams the critics hadn't anticipated."
- Meaning: Value can be created through less obvious paths than direct sales.
- Verify: The massive user base became an asset in unexpected ways.
💡 Strategy: When predictions fail because of overlooked factors, infer that value can be indirect.
Choice A is incorrect because this free service became profitable. Choice B is incorrect because the company "eventually became profitable." Choice C is incorrect because critics "hadn't anticipated" the actual revenue streams.