Microbes commonly deploy a risky strategy to acquire nutrients from their environment, involving the production of costly public goods that can be exploited by neighbouring individuals. Why engage in such a strategy when an exploitation-free alternative is readily available whereby public goods are kept private? We address this by examining metabolism of Saccharomyces cerevisiae in its native form and by creating a new three-strain synthetic community deploying different strategies of sucrose metabolism. Public-metabolizers digest resources externally, private-metabolizers internalize resources before digestion, and cheats avoid the metabolic costs of digestion but exploit external products generated by competitors. A combination of mathematical modelling and ecological experiments reveal that private-metabolizers invade and take over an otherwise stable community of public-metabolizers and cheats. However, owing to the reduced growth rate of private-metabolizers and population bottlenecks that are frequently associated with microbial communities, privatizing public goods can become unsustainable, leading to population decline.