Yeah, all commercial outfits need revenue, and if they don't have ad-based revenue they need their users to be customers paying for the service. Right.
This said, I see three more ways for free (like gratis) services (at least free for users):
1. Government-funded services. If some online services are deemed to be very important for public wellbeing, the government might decide to pay for a service or to run it themselves. One example is public databases like a list of medication covered by health insurance.
2. Non-profits. They can live off voluntary donations from users, governments, and companies.
3. Hobbyist-supported services. People work pro bono to support a service and some hobbyists even pay for third-party services (like hosting).
These are not sharply discerned categories. A service might nominally be run by a non-profit, but the non-profit is staffed by hobbyists and the government might pay for hosting and other costs. Such a service would be a government-funded hobbyist service run by a non-profit.
If you're not trying to be global scale and/or the only site in your market segment, you can go pretty far off of voluntary donations. As far as I know, even the largest Mastodon sites are Patreon/Liberapay/etc funded.
This said, I see three more ways for free (like gratis) services (at least free for users):
1. Government-funded services. If some online services are deemed to be very important for public wellbeing, the government might decide to pay for a service or to run it themselves. One example is public databases like a list of medication covered by health insurance.
2. Non-profits. They can live off voluntary donations from users, governments, and companies.
3. Hobbyist-supported services. People work pro bono to support a service and some hobbyists even pay for third-party services (like hosting).
These are not sharply discerned categories. A service might nominally be run by a non-profit, but the non-profit is staffed by hobbyists and the government might pay for hosting and other costs. Such a service would be a government-funded hobbyist service run by a non-profit.