That critical mass was likely there from Instapaper the web app. I went straight to paid since I was a fan of the service. I suspect there were many others
First, "I did X, then Y increased, then I did X again right before Z, which clearly increases Y, happened, and Y increased again!" is not empirical evidence, and many of Marco's conclusions were very dependent on (I think unreasonable) assumptions that were based on his gut feelings.
More importantly, the argument of "he'd lose customers if he removed the free app" is about long-term, future effects. I perceive that Matt is trying to say that, say 1 year from now, the paid Instapaper app will have fewer customers if there is no free app in that interval than it would have if the free app had existed in that interval. Of course, this is fundamentally impossible to test, and is based on gut feelings, but it was not disproven by any "empirical evidence" presented by Marco. But it's no more unreasonable for any of us to have a gut feeling in this respect. Personally, I believe a lot of Marco's rationale, and do think that he's better off now without a free app, but he certainly did not prove this conclusion.
I agree that I've not presented the best argument. And to be honest that was not my intention. I was just stating what I felt (as you acknowledge).
But I stand by what I said earlier: he will lose some very good customers. I didn't mean he will lose all, but some. He knows that, and is willing to accept it and is betting on the fact that the number is very low.
From the article:
"If I don’t have a free app for a long time, I’m certainly going to miss out on some potential long-term conversions. But how many, really, and what would it cost to chase them?"
He's presented empirical evidence that he's not losing any, the exact opposite happens, he gains customers by not having a free app.
You've presented your gut feeling.
There might be something behind the 'critical mass' argument that some are saying, but that's impossible to test. Yours seems very wooly though.