# Monetising the Rabbit R1

> How the talking orange box might make a profit before Siri kills it.

> Last updated: 2024-02-02

This has been on my mind all week, so getting these thoughts into a note will get them out of my brain. It’s a product fiction to play with monetisation strategies that Rabbit might adopt in future for its R1.

The original thought was: What’s the arc of enshittification for the Rabbit R1? But after coming across [an interview with its inventor, Jesse Lyu](https://www.fastcompany.com/91013196/how-design-drove-10m-in-pre-orders-for-rabbit-r1-ai-hardware), that [Tobias shared](https://blog.tobiasrevell.com/2024/01/31/box108-the-old-web-is-dying-and-we-keep-making-this-sort-of-annoying-kind-of-art/#:~:text=An%20interview%20with%20Jesse%20Lyu%2C%20the%20inventor%20of%20the%20Rabbit%20R1.%20He%20is%20very%20conscious%20of%20the%20fact%20that%20it%20doesn’t%20do%20anything%20that%20a%20phone%20can’t%20do%20and%20yet%20you%20have%20to%20carry%20an%20extra%20object.%20But%20that’s%20the%20only%20way%20he%20can%20make%20money!%20How%20long%20will%20that%20money%20last%3F%20Well%20it%20costs%20%24200%2C%20the%20company%20cover%20the%20%2415%20a%20month%20you%20spend%20using%20GPT%20turbo%20so%20you%20do%20the%20maths%20until%20it’s%20either%20dead%20and%20unsupported%20or%20switched%20to%20a%20pricey%20subscription.%20And%2C%20as%20above%2C%20expect%20Siri%20to%20be%20able%20to%20do%20all%20this%20by%20the%20middle%20of%20the%20year.), I had more context to work with.

Lyu says that the products margins are good but people could spend $15 a month on processing intent via ChatGPT, so with 50,000 users that’s $750,000 a month in costs right away. Add in all your other operational costs and its [$30 million in funding](https://finance.yahoo.com/news/rabbit-inc-raises-additional-10m-140000578.html) makes for, what, a two- or three-year runway? They need revenue.

## Options

- **Transaction fees**: Every time you ask a rabbit to do something, maybe Rabbit claims a fee. 79 cents.

- **Subscription model**: So users can avoid transaction fees. Probably just pass the ChatGPT costs on to users, so $15 a month.

- **Tip your rabbit**: If you tip your rabbit, it’ll do a better, more accurate job. Hilariously this is a [real thing](https://blog.finxter.com/impact-of-monetary-incentives-on-the-performance-of-gpt-4-turbo-an-experimental-analysis/)! Just like in [*Ubik*](https://www.goodreads.com/quotes/7444685-the-door-refused-to-open-it-said-five-cents-please).

- **Adverts on the free tier**: ‘And now a word from our sponsors’ but coming out of an orange box in your pocket. Again, *Ubik*.

- **Biz dev**: Special offers from other brands. Or access to unique products from luxury brands, considering this may be adopted mostly by rich folk. For the aspirational middle-earners, Bloomberg will describe this as ‘democratising luxury’ or something similarly saccharine.

- **Rabbit store**: Taking a percentage of revenue from user-built rabbits, like Apple’s App Store. [According to Lyu](https://www.fastcompany.com/91013196/how-design-drove-10m-in-pre-orders-for-rabbit-r1-ai-hardware#:~:text=As%20users%20sell%20their%20own%20rabbits%2C%20Rabbit%20OS%20will%20take%20a%20cut%2C%20just%20like%20Apple%20does%20with%20its%20App%20Store.%20“We’re%20not%20reinventing%20any%20business%20models%2C”%20says%20Lyu.), this is one business model they will actually pursue. (Although they’ll need a name that doesn’t sound like a dildo shop.)