Ello, goodbye (aralbalkan.com)

almost 3 years ago from , Frontend UI Developer and Designer @mobileaction

57 comments

  • Tyler HowarthTyler Howarth, almost 3 years ago

    STICK IT TO THE MAN DONT TAKE INVESTMENT MONEY! FUCK THE VCS

    INDIE 4 LIFE

    FUCK THE INTERNET!

    43 points
  • Benjamin RogersBenjamin Rogers, almost 3 years ago

    I clicked on this reluctantly, expecting another hipster whining about the aesthetic or typography, but was really pleasantly surprised at how well this article was written. His tone is never too animated or whiney. Well done.

    31 points
  • Pierre de MillyPierre de Milly, almost 3 years ago

    This guy really doesn't like VCs :p

    The point I don't agree with is: "if a company has taken venture capital, you have already been sold".

    There are profitable business models out there for free services that don't include selling the free users. I think Ello mentioned that they're going to sell some extra features for power users.

    I doubt it'll be relevant to anything but businesses trying to promote themselves (a la facebook promoted posts) though...

    3 points
    • Jeff EscalanteJeff Escalante, almost 3 years ago

      The problem here is that selling features to power users is likely not going to fuel a multi-billion dollar company, which is the goal of venture capital investment. Most VCs do not want to fund a lifestyle company, they want to fund juggernauts that they get huge returns from like facebook, twitter, instagram, etc. They will be pushed to grow more aggressively, and that means making more money.

      2 points
      • Bart ClaeysBart Claeys, almost 3 years ago

        500k is not VC money... it's seed money. It's insignificantly low. You're running ahead with your assumptions.

        0 points
  • Andrew SapiensAndrew Sapiens, almost 3 years ago

    A very well-written and informative article.

    I was skeptical of Ello at first considering that it seemed like they had no viable income. I do believe that there is a need for an ad-free and privacy-respecting alternative to Facebook. Ello is just not the answer; they already decided to sell their users before they even started.

    3 points
  • Tanel STanel S, almost 3 years ago

    Nicely written but I don't see any point why I shouldn't try ello

    3 points
    • Jeff EscalanteJeff Escalante, almost 3 years ago

      You may have missed the entire point of the article and of ello. The reason behind why you should use ello is that it's private and they won't sell your data like facebook does, or serve ads.

      The problem here is that they have taken venture capital money, which means they have already formed and pitched a plan to make money off the users, or to sell to another company which will do so, once it grows enough.

      In addition, once you have taken venture capital money, they push you very hard to not be a "lifestyle company", which is a term meaning a solid and successful company but not a company that is the next big thing or has a bajillion users and tons of money and employees. VCs are generally not fans of these types of companies, for reasons that I won't detail in this response because that would make it way too long. Since ello's revenue model is "if you like ello please support us by paying for some features", as described on their about page, this is likely not going to be enough of a revenue flow to make this company the "next big thing" pulling in billion dollar valuations, so VCs will likely push them to sell to another company who will then sell user data slash ads, or they will do it themselves.

      So in summary, their taking on VC money (especially without disclosure anywhere) is entirely at odds with their mission statement and purpose, which is a very solid reason not to get involved with it. If you want a social network that sells your data and serves ads, we already have facebook.

      11 points
      • Bart ClaeysBart Claeys, almost 3 years ago (edited almost 3 years ago )

        The article and this response is based on the assumption that Ello would be selling users' information and that there is no other way to make money. Well, again, these are assumptions and they could prove to be very wrong.

        It's sad to see that a new initiative does not get the chance to prove itself and that people feel betrayed that they accepted some small amount of investment. Nobody knows the terms of the investment and nobody knows the long term vision and plans of Ello, so please cut them some slack.

        There are tons of models to make money without selling users' data. Just to give an example: Firefox has been surviving for years by getting funds from Google by selecting them as the default search engine. Sometimes, it's that simple!

        4 points
        • Jeff EscalanteJeff Escalante, almost 3 years ago

          That example is nice but irrelevant. This is a web browser, we're talking about a social network. Can you think of a single social network that exists and does not sell user data as a way to make money?

          0 points
  • Alexander PierceAlexander Pierce, almost 3 years ago

    I was pretty skeptical of their business strategy, even before reading this article. Interesting, just joined the beta yesterday too.

    2 points
  • Joel CalifaJoel Califa, almost 3 years ago

    Andy Baio's post is mentioned in the article, but it's also worth a read

    2 points
  • Asher SimondsAsher Simonds, almost 3 years ago

    It sounds like this guy really wants Ello to be another Diaspora. Just from reading their About materials it doesn't seem like they want to be at that level of user security.

    2 points
  • Juliano DasilvaJuliano Dasilva, almost 3 years ago (edited almost 3 years ago )

    I understand his point of view and, yes, taking VC money means exit strategy (revenue). But, the question is: how else would you build such community/site? It takes money to build and maintain anything.

    1 point
    • Jeff EscalanteJeff Escalante, almost 3 years ago

      To answer your question: http://en.wikipedia.org/wiki/Bootstrapping

      Many successful companies have been started this way. It's not the way to fuel an aggressively growing profit monster, but at the same time, that doesn't align with the site's goals.

      0 points
      • Juliano DasilvaJuliano Dasilva, almost 3 years ago (edited almost 3 years ago )

        I understand the concept of bootstrap and while sounds amazing is not as easy as one thinks, specially if you've got momentum with your app/site. You can only bootstrap for so long specially for a site such as Ello, or Facebook, or Pinterest, or Twitter. The guys over at Mint, they bootstrapped but took VC money eventually. It costs a lot of money to run a site such as Facebook. Also, I don't know if the founder has enough money to build such thing. More often, we have an idea and no money, or money and no feasible idea. Ello would have to have a very good ($$$$) model in order for it to sustain itself and to be honest, i don't think charging money for access is the right approach. I'd like to see a facebook-like, twitter-like, pinterest-like startup that didn't raise money.

        I'm not disagreeing that VC money means exit, but I also don't know if such business model, charging customers for a social network site while there's hundreds of social networks for free, is a sustainable business model.

        I personally would never pay for a social network, unless, it was like water; I needed to survive.

        It'll be interesting to see how Ello exits.

        0 points
        • Jeff EscalanteJeff Escalante, almost 3 years ago

          Anything that you are not paying for is making money off you somehow, whether it's selling your data, actively trying to figure out what the maximum number of ads they can stuff onto each page is before you use the service less, etc. The difference here is between a company that works to make a better experience for users, and a company that works to figure out how to extract money from non-paying users. If a service is useful to me at all, I'd much rather pay the people to work on it and make it better.

          I just don't understand the attitude of "I would never pay for this thing that is really useful to my life and I know costs money to upkeep!" It seems to be the way everyone thinks about any sort of social network or app. I really hope it stops though, because it leads to companies monetizing by taking advantage of psychology and addiction tactics to gouge you for huge amounts of money (mobile apps and games) and/or essentially being evil and selling your shit and restricting the service more and more slowly until you pay them (social networks, facebook). Are these really the kinds of products you want to use? Everywhere else in my life I'm happy to pay more for a higher quality thing that is useful to me.

          0 points
          • Juliano DasilvaJuliano Dasilva, almost 3 years ago

            I agree with you. I'd definitely pay for something that is useful and helpful to me and I have. I just don't believe you can build such thing without taking money. Facebook had this strategy of not selling ads at the inset but at some point had to give in. Like I said, I would pay for something that is useful to me, adds values to me, and while I'd pay for something, the majority of people (great scale) in the world wouldn't, I don't think.

            I don't think that any social network is in a position to charge money because it's helpful to me. Nobody has done that though because it's a business model, specially at the inset, that doesn't work for growth. Good discussion!

            0 points
            • Jeff EscalanteJeff Escalante, almost 3 years ago (edited almost 3 years ago )

              Yeah, this is the issue with social networks exactly. Nobody will use it in the early stages if it's paid, since a social network's value is that everyone is using it, and if nobody is using it, there's no value so nobody wants to pay, and since nobody wants to pay nobody can use it, and circular continue. App.net was a great real life experiment that proved this. So the alternate is to call it free so people use it, then try to make money in any way possible, whether it's evil or spammy or not, once it has users/value.

              I feel like there's one option that has not yet happened that I'd be curious to see the results of. A social network that started out free, and if/once it gained popularity, it sent out a message to all users that read something like this:

              Hello users! Thanks for supporting X. Your support has made this platform the success it is today, and we hope that X is making your life better, happier, and more connected. While we started as a tiny side project, we now have N million users, and in order to continue supporting and improving X, we need money. This means hiring more employees as well as paying for the bandwidth our N million users take up.

              We didn't charge users money originally since we had very few users and honestly X wasn't worth money in the beginning since a social network's value is determined by how many of your friends are here, and a paywall would just keep people out. But now your friends and communities are here, we are convinced that it has value, and since is costs money to upkeep, we need to either make money somehow or shut down.

              To keep the options flexible, we will offer you two choices. First, you can pay us $Y per month for the service. This will all go towards paying for the platform and the salaries of our employees who work hard to make X better for you. Alternately, you can not pay us anything, and we will still try to make $Y per month from you, because we have to in order to not go out of business. We will do this through various methods such as serving advertisements, selling your public data, etc. All of the ways we do this will be detailed in our "free account" terms of service and privacy policy. There is also a "paid account" set of these documents with different terms. With a free account, the experience of using X will become a bit worse for you, but in exchange, you will get to use it without paying a dime.

              This type of model is surely familiar to you if you have ever downloaded the "free version" of any mobile app. The free one probably is plastered with ads and may not include every level, but is good if you use it infrequently or are just trying it. The paid one makes a little more sense for heavy use, usually. The road you choose is up to you entirely, and should be based on how much you value X and your experience while using X. Starting next month, all accounts will be transitioned to "free". At any time from now on, you may choose to go "paid". You can change your plan at any time with no extra charges or commitments.

              Wow that ended up as a crazily long speculation. But also makes it more interesting to me. Maybe someday something like this will happen. It would be awesome to see the response, and how it panned out for the company.

              But for example I would have a paid account for twitter and probably a free one for facebook based on my usage. And would be totally fine with that, honestly.

              0 points
    • Ryan DRyan D, almost 3 years ago (edited almost 3 years ago )

      What Aral and Co. care about is independence - they aren't trying to do away with money.

      Obviously a social network without ads will charge users, and that's a model I think the world is ready for.

      As for getting started, there are so many ways to raise money without offering equity these days I'm not going to list them ;)

      1 point
      • Kyle ConradKyle Conrad, almost 3 years ago

        that's a model I think the world is ready for.

        I think App.net would disagree with you.

        1 point
        • Ryan DRyan D, almost 3 years ago (edited almost 3 years ago )

          Forget App.net (value proposition: none) - the in-app purchases economy is at somewhere north of $20 billion dollars.

          People already understand how valuable a Facebook-like network is. Give them a Facebook-like network that doesn't suck (<-- hard part!) and enough of them will pay for photo storage, etc. to keep the lights on.

          0 points
        • Marc EdwardsMarc Edwards, almost 3 years ago

          I think App.net would disagree with you.

          One failure (or lack of success, if we’re being more accurate) doesn’t mean the ideal can’t work.

          App.net still has a great infrastructure, and still has the lights on. I hope it gets a rebirth one day soon.

          0 points
          • Juliano DasilvaJuliano Dasilva, almost 3 years ago

            "One failure doesn't mean the ideal can't work." I agree with you. The problem is if you want to be a social network at grand scale, you can't simply have your lights on. But, if you just want to be another social network, then yes, bootstrap and don't take VC money.

            0 points
      • Juliano DasilvaJuliano Dasilva, almost 3 years ago

        I understand Aral's point of view but unfortunately, that's not the world we live in, specially in America. The world is ready to be charged for a social network? I don't think so. It better make my life (family, and friends) soo much better. I'd love to see a social network that didn't raise money at all, is sustainable, and its founders are very happy.

        Bill Gates, yes, could build such social network.

        0 points
    • Marc EdwardsMarc Edwards, almost 3 years ago

      But, the question is: how else would you build such community/site?

      Start small.

      It takes money to build and maintain anything.

      Many worthy projects have started on nights and weekends.

      1 point
      • Juliano DasilvaJuliano Dasilva, almost 3 years ago

        True. And I've done that myself. Bootstrapped and raised money. And if they grow significantly (hockey stick) then eventually they'll take VC money. I don't see any other around. I haven't seen, yet, social networks that didn't raise money.

        0 points
    • Lucian MarinLucian Marin, almost 3 years ago

      I built Sublevel.net with no VC money.

      1 point
      • Juliano DasilvaJuliano Dasilva, almost 3 years ago (edited almost 3 years ago )

        That's great and props to you. I also know very successful entrepreneurs that bootstrapped and are doing really well with no VC money, but they're not a social network. They charge for stuff people want to pay for, and I highly doubt people will pay for a social network. I'd love to see a highly globally successful social network that charged for access and is still breathing.

        I'm talking about achieving global scale. There's tons of social network nowadays but only a handful achieved global market, and none of them didn't take VC money.

        1 point
  • Matthew HaeckMatthew Haeck, almost 3 years ago

    Very interesting take on dealing w/ VCs. Most folks see the money as a means of sustaining, but it really is a takeover when you take a step back and see the big picture.

    1 point
  • Nik RajpalNik Rajpal, almost 3 years ago

    Is anyone still giving out invites for Ello? I'd like to try it out. Thanks!

    0 points
  • Jffry VskJffry Vsk, almost 3 years ago (edited almost 3 years ago )

    I think people need to give ello a little bit of time to get their stuff together.

    Disclosure: I don't even have an ello account... ;)

    0 points
  • Eric StevensEric Stevens, almost 3 years ago

    Key point: It is easy to sell users. VC backed ventures grow that venture to monetize it. Return on investment by scaling to a point of profit.

    Key takeaway: Ello doesn't have to sell users to make money. Stop thinking in the box that all other media functions in.

    "If it acts like a duck, and looks like a duck.. then it must be a duck."

    0 points
  • Tommy SadlerTommy Sadler, almost 3 years ago

    Do we need an ad-free social network? We already have Path, which is great. The only issue here is that it's strictly a mobile social network.

    0 points
  • Antoine LordAntoine Lord, almost 3 years ago

    What am I supposed to do ?

    I already have an account on Ello, i'm already using it and I like it. I like the way it works and the content that is posted on it. And honestly, i'm in love this monospaced fonts (sorry bout that).

    I'm tired of Fb and Twitter, and I really want a social network that respect me. I need something new, something fresh, something that will redefine what we know about a social network.

    I don't know ANYTHING about the VC stuff but I think I understand this article and what it means.

    If I want something like Ello to work and be successful, should I continue to use it? Should I make my own Ello and find another alternative to fund it ? Should I just stop using all social networks ? I don't know what to do.

    0 points
    • Mr Kyle MacMr Kyle Mac, almost 3 years ago

      Slam that lid on your lappy and go deep, deep into mother nature... breathe that fresh air, maybe even stare at some mountains and realise everything, is, going, to, be, O.K.

      Or, resort to your real life social network - joy to be had!

      0 points
  • Luke JonesLuke Jones, almost 3 years ago

    Does anyone else just stop and think... “Why the fuck does this matter?”

    I am the product. So what. I’m having fun here. I’m talking to people. Oh look, an advert! Wow, I can ignore it. My data is being sold? That’s fine. There’s a limit to how much I’d pay for a social network to not sell my data, and it’s this: £0.

    I’d rather use a product where my data isn’t private for free than to pay some fundamentalist scaremonger £10 a month to keep my data safe.

    I could rant and rant and rant for hours, but man... Sometimes people just need to shut up and find something more important to worry about. I’ll be dead pretty sharpish, and I don’t think people should spend their time worrying about this shit.

    0 points