I once decided to deny new customers in order to be able to service current demand at the quality we wanted. It backfired and made people want our product even more. Our phones were blowing up. That approach can have unintended consequences!

You unintentionally used a common sales tactic; by decreasing supply you increase demand.

Another knob you could have turned is: raise prices. Did you try this?

Anthropic is already doing this.

Signup prices seem higher now than three months ago.

This is actually the least frustrating method because people who can't afford to pay are not as angry as people who paid and aren't getting served (like when sign-in emails don't arrive for hours or days), or people who have paid for a long time to suddenly see quality decrease.

But it might not be best for business: Having more users than you can handle might suck, but if you're popular enough, people are still gonna put up with it.

Bad for business and probably unwise for the type of product people will pop their head in to check on, then stop paying and return much later to see whether it's still not much more than a parlor trick for them.

For my part, I've tried to help reduce their demand by cancelling my subscription.