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robertogreco : variablepricing   1

Ello | quinn
"Ello needs to make money, and that means Ello eventually needs to charge someone. So who can it charge? The only way to make the massive returns VCs like is to charge companies or governments. These are the only thing in our society rich enough to consistently feed the VC mouths. (this is why I strongly recommend against taking VC money -- it's much like adopting 15 children at once, it limits your options.) The only thing a social network can sell to companies are its users. It could work, to have Ello sponsored by X corporation for a given day or week or whatever, but in this business environment part of X corporation's demand for its money is going to be user data. So there you're back to tracking your users like everyone else. Ello could charge databrokers and governments for their user data too, but that also drives them towards being Facebook, Twitter, etc.

That leave Ello to charge their users. This is a fine business model and the one that has supported more things for most of human history. I like this model, I even pay for online services now, though not many -- not many are worth it, and they usually track me anyway. Asking users to pay allows Ello to do something no other online company is doing right now -- optimize Ello for users. This is a great advantage for Ello, because it would mean they could actually listen to users and give them an experience that would, given enough time, be so much better than the massive social networks that people would love joining Ello.

But of course this is a problem too... most users can't pay. Some people like to complain, say that we deserve to be surveiled because no one is willing to pay for anything. This is a ridiculous statement, people all over the world are paying for things every day of their lives. But until we do something about the distribution of the world's wealth, the vast majority of people, even those with internet access, will find that paying a high enough amount for it to be worthwhile for Ello to collect it will cause a real decline in their quality of life.

obligatory graph:

hmm, I can't get obligatory graph to load. I less than three you, betas. ;) Anyway.

The only people that can pay Ello right now are in that top wealth quintile, and then probably the top 2/3rds of it at best. But social networks are like languages -- they are only worthwhile when they are broadly adopted. This makes an incredibly compelling case for user tracking and adverts, since success as a broad network makes the most sense by giving network access away and then selling the people to companies. This is a hard model to escape, to be honest, and it always has been. Companies and governments are essentially colonizing the internet, extracting, monetizing, and controlling the humans therein just like they did during the colonial period, only with less physical violences. Facebook is essentially John Company.

There are only two ways I can see that Ello can escape getting crushed by the contemporary versions of John Company (which did a huge amount of crushing in its day). One is to beat them at their own game and become the next John Company/Facebook/etc, which means becoming better at colonial extraction on users -- most likely in the growth arena -- actual former colony nations. If they don't have the stomach for this kind of evil, and and I deeply hope they don't, the other way is to make far less money. To be, compared to the big VC funded players, a small business with hopeful growth over the course of decades, not quarters.

This is going to mean working out something no one has been able to yet -- differential pricing on the net. The best system of payment they could have, with a magic wand and a fairy godmother etc interceding would be to extract something like $.25 a day from users in the top billion, maybe $.05 a day from the next billion, and possibly nothing or money losing from users in the last 3 billion. The problem is that people hate differential pricing, see it as unfair, when they can see it. They can't see income inequality all the time in their houses and neighborhoods and work places, so that doesn't bother them. They can't see massive surveillance and manipulation, so that doesn't bother them. But dear god, when they see a price list with differential pricing, people go purple with rage. So that's a problem.

Nowadays there's a lot you can do with geolocating IPs, and showing people variable content based on where they are. This could mean that Ello could price based on that, and for now, I believe that's their best option. But no VC will ever accept that, and chances are if Ello has or ever will take VC, they are already dead and just don't know it yet. Their chances of beating Facebook are next to none, especially as they would have to betray everything they've said they were about, and there is no other model that could feed the VC mouth.

Introducing variable pricing, pricing on features, and multiple payment systems over time could let Ello developers make a comfortable living. But at no time in the near future would it make them .com millionaires. To make Ello compelling and free of surveillance and extraction means making a service many can use and doesn't cost too much. Eventually, wide enough adoption to be meaningful to the world means opening it up and making it a protocol other people can build businesses on that don't provide much or any revenue for Ello. It means striving to enter that most dreaded of economic states -- becoming a commodity.

Making social networking a common commodity could remake the world, like the world wide web, or vaccination did. But like the world wide web and vaccination, they aren't ever going to let Paul Budnitz become Cornelius Vanderbilt or Mark Zuckerberg. He'd have to settle for the hope that a lifetime of hard work and enough money to live could let him be Tim Berners-lee or Jonas Salk.

So, Ello, what do you want?"

[See also: http://text-patterns.thenewatlantis.com/2014/09/hello-ello.html ]
ello  quinnnorton  2014  jonassalk  markzuckerberg  corneliusvanderbilt  vc  venturecapital  business  monetization  funding  advertising  privacy  socialmedia  variablepricing  pricing 
september 2014 by robertogreco

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