App.net is an experimental competitor to Twitter that users actually have to pay for. This has apparently ruffled a lot of feathers.
In You Can’t Start the Revolution from the Country Club, Anil Dash notes…
In today’s world, where the social web is mainstream, innovating on the core values of tools and technology while ignoring the value of inclusiveness is tantamount to building a gated community. Even with the promise that the less privileged might get a chance to show up later, you’re making a fundamentally unfair system.
On one hand, yes, the beauty of the web is that it’s open and inclusive. But I’m actually more intrigued by it’s ability to connect people who otherwise would not have met - which is something a bit different from being open.
Sometimes a gated community is nice. It keeps the signal high and the noise low, which actually allows for better, more meaningful connections.
The Beauty of Paid Services
Twitter today is filled with sponsored tweets, countless spammers, and people who shout loudly but never listen. That’s the downside of free and open. Your party inevitably has a lot of crashers.
A paid service creates a barrier to entry that keeps a lot of that garbage out. It also helps ensure a more stable long-term business.
Dalton Caldwell, who’s the guy behind App.net, writing about what Twitter could have been, said…
When Twitter started to get traction, a year or two into their existence, I decided that Twitter was the Best Thing Ever. I realized that Twitter, because of their API, actually was a real-time protocol to connect various services in a novel way. I had debates with my other tech-nerd friends about whether Twitter could be one of the fundamental building blocks of the Internet via their powerful API. When reporters or investors asked me what I thought the most exciting company in the valley was, I would invariably answer “Twitter”. As I understand, a hugely divisive internal debate occurred among Twitter employees around this time. One camp wanted to build the entire business around their realtime API. In this scenario, Twitter would have turned into something like a realtime cloud API company. The other camp looked at Google’s advertising model for inspiration, and decided that building their own version of AdWords would be the right way to go.
And you know who won: The ads people.
If your business depends on advertising, your business model is all about growth of your own network. You need people to spend increasingly larger amounts of time on your app sharing increasingly large quantities of information.
Quantity. Not quality.
An Alternative to Ads
But there’s another way.
In a follow-up post, Dalton describes the success of GitHub…
Years later a site called Github came out. It was good. They had no advertising, but charged money for certain features. They quickly became profitable because the service was so good and so important, people were willing to pay. Github has become a much-loved brand and service, and many would agree that it is a key piece of infrastructure in the technical renaissance we are currently experiencing. Github is apparently profitable, and it sounds like the people that work there spend their time trying to make the best service possible, as opposed to spending their time trying to extract additional pennies out of their users.
This model frees you up to make far better decisions about things. You don’t need to make decisions solely on driving users to consume more. They can consume better.
Is Paid Exclusionary?
Some folks, like Anil Dash or Tess Rinearson, see this as a exclusionary and elitist. Tess wonders if App.net is the country club of the internet…
[I]t’s not yet clear exactly what App.net’s subscription fee will be. But even a very low fee could prove prohibitive for a large segment of the web. And even if it doesn’t, the appeal of this new network seems limited to a specific demographic, at least for now: All of my friends who have backed the site are both white and male. Of course, pockets and bubbles have existed and will always exist on the internet. But it scares me when people start imagining a site like App.net asThe Future of Social Networks, and herald it for its ability to keep “unwanted” people out.
So yea, that’s one way to think about it. But another is that being user funded from day one gives you the freedom to make far better decisions about your business.
Jason Fried of 37Signals talks about this all the time. In an article for Inc. Magazine, he wrote…
When you put a price on something, you get really honest feedback from customers. When entrepreneurs ask me how to get customers to tell us what they really think, I respond with two words: Charge them. They'll tell you what they think, demand excellence, and take the product seriously in a way they never would if they were just using it for free.
The Echo Chamber
Tess may be on to something when she writes…
Hacker News is filled with people who are startup literate and technically competent. People write grammatical arguments and share deep knowledge. Hacker News is The Place where “startup people” congregate. It’s also boring as hell. It’s an echo chamber, a bubble. Everyone has the same interests, and many people come from similar backgrounds. It’s hive-mind-y. I post there, and I contribute, but it’s not as interesting as a discussion on, say, Twitter. Twitter has a diverse user base and generally welcoming approach, and it shows.
But the echo chamber exists on open and free sites like Twitter, too. People tend to follow people who think and act like they do.
There's a duality to the internet
It’s open and free and connects people around the world. But it also costs money. Computers cost money. Servers cost money. Infrastructure costs money. Apps may only cost time to build, but they cost money to run.
I believe in an open and egalitarian web, but I don’t believe that means there’s not room for paid and exclusive products.
To use hardware as an analogy: You can buy an inexpensive mobile phone, a cheap netbook, a mid-range Dell, or a high-end MacBook Pro. The experience of using the web on each of those will vary differently.
The web is not short of social networks. You have free options, and you have paid options. Most of the information on paid sites can be found elsewhere, too. But you have to sort through a lot more noise to find that signal.
And that’s the power of paid services. They cut the noise.
Referenced Articles & Further Reading
- You Can't Start the Revolution from the Country Club by Anil Dash
- What Twitter Could Have Been by Dalton Caldwell
- An Audacious Proposal by Dalton Caldwell
- App.net: The Country Club of the Internet by Tess Rinearson
- How to Get Good at Making Money by Jason Fried
- App.net is not about exclusion, it's about innovation by Rian van der Merwe (not referenced above)