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Originally Posted by $5 submissions
Marc De's dead on. It's all about execution. One key factor is having tours that convert well enough to make the recruitment model work and member sections with enough interactivity/novelty to make the retention model work.
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The more successful the conversion is on signups means the greater the number necessary to finance those signups. With enough of a member base recurring this can be carried since the cash flow is there, but if that is not there or some other way to pay for the signups then you are going to have a tough time getting out of the hole high converting traffic would create. Admittedly that is a kind of a "good" problem to have but mismanage it and you are going to tank quickly.
To echo a common theme here... strong forecasting and financial management is critical.