Absolutely this. If you set up a social media service and it costs you $650/year for every active user (TS supposedly has 2M active users), then you’re technically incompetent, and if you do so without a plan to make a significant fraction of those costs back in revenue, then you’re financially incompetent. While incompetence is a good baseline assumption when considering the people around Trump, this is extreme even for them. (For comparison, in 2022 mastodon.social’s running costs were around EUR150K, for 117,000 active users, so say $2/user).
The explanation, as @GagHalfrunt says, is that interested parties – including but not limited to Trump – are sucking money out of it by creative accounting and self-dealing. I would not be in the least surprised if there’s some actual bonafide money-laundering going on too.
Of course, the point of Truth Social was never to be a successful business. The goal was to create a vehicle that would take in money from investors and transfer it to Trump and the founders of the service, via the SPAC mechanism. At this it seems to have been fairly successful. And that also explains why they don’t need to try too hard to make any revenue. Making money from the business isn’t the point; bilking the investors is.
