As far as I know, we’re only the second people to even plan to try to make it profitable to run Lemmy for ourselves (as opposed to earning money from hosting instances for others) as one of multiple services because we certainly don’t think it’ll be enough to get people to pay by itself (I think it’s great, but on its own people would just pick a free instance) and we’ve not even launched yet (the only users of our services at the moment are friends of ours who have volunteered to test).
So it’s a bit ludicrous to call it a commercial failure at a point where nobody has given it an actual try yet. Maybe nobody will find a way to make it work. It’s quite possible. Most new ventures fail, after all.
I do agree that commercial backing is at least a big factor in making success more likely, though, which is one of the reasons we’ll be trying a somewhat commercial angle. I say somewhat because having taken venture capital in the past, we have no interest in doing that this time - we’re not interested in millions of users; we’d like it to be profitable and self-sustaining and a full-time job, and we can do that with “just” thousands of users, and make it sustainable to run indefinitely with hundreds. But I don’t think commercial backing is the only path that works.
If anything I see it as usually being a case of a symbiotic evolution: Successful open communities bring commercial backing, and sure, commercial backing increases the chance of ongoing success. But without having a seed of something successful odds are you wouldn’t get that commercial backing to start with.
And the best commercial backers are the ones who figure out how to be good and helpful parts of the community rather than try to dominate them. It’s far easier to deal with backers who grow with the community than people who come in with lots of capital and want to try to set direction. This is another reason why we don’t want to go talk to VCs, even though I know exactly what they’ll look for as I was involved in vetting hundreds of potential investments. It might make money, but that’s not the only measure of success.
The reason we’re looking at providing a paid Fediverse service is exactly that I looked at X and thought “I don’t mind paying, but not to you”. I’d spent thousands on ads for another business on Twitter in the past, so paying for verification would’ve been peanuts, but can’t bring myself to do it. The beauty of an open network is that people can try many different approaches, and several might work (and many will fail), so I agree it’ll be a long game.