Allow me to make a bold predication - the App.net will be done in a matter of months. Even if it becomes absolutely free.
The reason is Tent. If Tent drops the ball and doesn't fully execute the idea, someone else will. Their idea is bigger, better and far better maps onto the interest of various 3rd parties (such as hosted service providers) that wouldn't hesitate to support it. Commoditizing the social services is a great idea with balls and vision. Creating a paid Twitter clone is not.
I'll make an equally bold prediction, Tent will fall on its face while App.net powers on into the future.
My reasoning is that it reaches too far without a safety net of a business model. Assuming Dalton is being truthful in his post, he's not cutting prices because he "didn't get traction" he's cutting prices because his business model is out performing his expectations, and rather than go for a higher net early on he's re-investing that margin into growing the user base.
Tent is going 'old school' like the old IETF protocols, that means waiting for adoption, having a variety of implementations, establishing a consensus, moving forward. That works great in a green field situation, but this isn't it. Look at the OpenMoko effort, free Phone OS, build it and they will come? No. Reaching too far without a model to nourish early adoption and growth. Influential? Sure but killer? Not so much.
Dalton has something which Tent does not, people willing to spend money to use it. That is why I think Tent will be a memory long before we see the end of App.net.
I thought that the whole point of App.net wasn't to build just a Twitter clone, but something that you could build any sort of social service on top of.
Tent is great. Love it.
5-6 loosely integrated infrastructures will replace Facebook, Twitter, G+ (ad model) over time.
App.net is one of those infrastructures.
Please get off the "twitter clone" smackdown ... it's lame.
App.net is a trustworthy "blackbox" which allows ANY social construct. It dovetails with Tent.
People are building Tor concepts, non-Zynga collaborative games, new messaging protocols, etc in App.net ... beyond twitter is easy. Indeed, it's hard to keep up with all the API enhancements, and the new developer ideas. My personal goal inside App.net is a construct which brings down the GFW (firewall) of China. (Im fluent in 中文, 25+ years).
No advertisements, paying developers well.
Integrity about the future ecosystem.
With a $1 million in the bank, one of the best geek hangouts on earth, and world-class integrity ... it ain't going away in months.
You'd be better off predicting that it's a heady time for new social protocols.
> we are dropping the Member price from $50/year to $36/year.
I think this is a great move.
We see a lot of posts on HN about raising the price to increase your userbase, but $50 was too high for a product in such an early release stage. Great for those die-hard early adopters (probably the people after whom Dalton was chasing), but terrible for the everyday Twitter user who is tired of the horrific signal-to-noise ratio on that service.
That said, my opinion would be that $24/year would be even better for an annual subscription. $2/mo is a lot of money for a "Twitter clone," but is cheap enough that it would be easy to convince your friends or colleagues to sign up. $36 might have hit the price point that I'll give it a shot as a (relatively) early adopter, but I'm not sure. $5/month, almost double the annual subscription fee, is too much for a thirty day trial run.
I'm one of the (few?) believers that app.net can really take off. I've tried Twitter, and while I'm relatively active, I can't help but feel that I'm lost in the oft-cited "echo chamber." I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.
Congrats to Dalton for lowering the price in what must lead to hugely increased participation.
> I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.
I'm curious... Considering your version of Twitter only consists of who you follow, why do you believe it would be better if those same people were elsewhere?
Call me crazy but a lot off people on app.net sound like they are participating in some kind of pyramid scheme. "Just invest some money and your time and app.net will be awesome. I'm having a great time, you'll have to believe".
Lowering the price to $36 after the initial "kickstarter" doesn't scream success to me. If it is that good people would have joined en masse for $50, no?. Will the price be discounted again in two months after everybody who's willing to pay $36 has joined?
I never really understood this, it seems more logical to me to give all members the developer perks. Most of the users won't use them, and those that do are helping to promote the app.net service and get new subscribers.
The bar is set somewhat high to limit the proliferation of poor and mediocre apps, rather than to encourage that. They want "serious" developers (at least for now...) and the price point is set to weed out lower quality apps that can hurt the nascent network.
So, growing 100% from 10,000 to 20,000 users allowed App.net to drop annual pricing from $50 to $36, which implies their expenses grew by only 44% (from around $500,000 to around $720,000). If expenses continue to grow at similar fractions of the rate of user growth, App.net should be able to price the service for around $5 per year with just over a million users. At that pricing point, App.net would become a compelling economic proposition for many consumers.
I don't think this has anything to do with cost-based pricing. In a non-commodity market, you don't charge based on how much it costs... you charge based on how much the market will bear. I don't think the choice of $36 vs. $50 has anything to do with a 44% expense rate. It's simple. It's hard to charge $50 a year ($4.17/mo) when you also have a $5/mo plan ($60/year). It's all driven by the $5/mo plan. Simply put, compared to $5/mo, $50 a year is not compelling enough to motivate annual subscriptions. This makes their $36/year ($3/mo) a compelling purchase to motivate annual subscriptions.
Likewise, they actually make more money with people on a monthly plan, assuming they have a customer LTV > 12 months. So, they're making $60/yr on monthly subscribers (20% more +$10), and their annual plan, while a 23% reduction from previous pricing (-$14), which means only a $4 discount on an average customer basis assuming they have an even mix of monthlies who stick around at least 12 months and their annuals. So, they would just need to grow their market such that they only need to have more monthlies than annuals, and they're making MORE money in the aggregate. (Do the math -- you'll see a mix of 58.33% monthlies and 41.67% annuals on the new plan is roughly break even with 100% annuals on the old plan).
Or even more starkly to show how this works -- if they didn't grow their annual base AT ALL, and dropped the price, they would only need 23.4% as many monthlies as annuals to break even to cover the difference. So, if they had 10,000 annuals, even if they didn't grow that at all and gave them all a price break, they would only need 2,334 monthlies to make up the difference (just under 19% of the total combined audience). And odds are high that monthlies will be a lot more than 19% of their total base. Oh, and they'll probably grow their annual subscriptions anyways.
They can see that their rate of growth for monthlies, combined with a more compelling discount for an annual program will actually increase the bottom line. Solid pricing strategy.
That would be true if App.net pays out $20,000 a month to developers, for forever. App.net promises to pay $20,000 to developers, but is that a fixed cost? If it is a fixed cost, then you are right, the more people who sign up, the lower the subscription price can be. A million users could fund $20,000 a month very easily. But is $20,000 a month fair to the developers? By the time App.net has a million users, we can assume there will be a lot of apps competing for a slice of that $20,000. What happens when there are 1,000 apps in the eco-system. Do they all get $20 a month? If yes, then hasn't App.net failed at its primary stated mission, of helping fund app development?
If App.net is to remain true to its mission, then that $20,000 should go up over time. And if it goes up over time, it is no longer so clear that subscription levels can remain as low as they are now.
We should ask how much money App.net is making. Similar services are upfront about what percentage they take from the subscriber's money. App.net needs to offer at least that level of transparency.
Two points.
1) App.net expenses are quite low.
Nowhere near your $500K-$720K range.
Since it's not "free", it's going to be quite profitable.
2) App.net is NOT shooting for 1 million users. Not yet.
Paul Graham challenged people in his PyCon keynote address to "build a Google Search for the top 10,000 geeks on earth". Dalton is responding to that in "social". He's not trying to scale quickly to 1 million users ... rather, he's wisely getting 10,000 top geeks involved, by sharing revenue and building a blackbox with integrity long term.
Rather than falling for a "must scale like Twitter" mindset ... ponder why Paul Graham himself suggested a smaller, ultra-geek laser focus.
Dalton is executing beautifully.
Paying developers well is smart, and it's profitable.
Economically when it does scale, this model has the potential to be off the charts. Patience.
I still don't know why anyone outside the techospher will ever pay to use app.net. Does a material number of users outside the techosphere even care that some apps are having their access restricted? Does anyone outsidethe techosphere even know app.net exists?
More importantly, App.net is still a closed box, just like Twitter. App.net still has to pay the bills, just like Twitter. When faced with the same decisions in the future, what prevent app.net from making similar decisions as Twitter?
Will $5 a user per month really cover their costs if they hit scale (I know they have other revenue streams, but I'm guessing they will have more users than anything else)?
I've never thought app.net was a good idea for many reasons but I think this is a good move. Introducing a monthly plan is the smartest thing they could have done. With so many yearly plans starting at the same time (when it launched) they could have seen a big drop in users as people reevaluated their decision to purchase in a years time.
With the $5 monthly fee I think people are more likely to continue paying for it - there is no time where they will be forced to reevaluate the value the service provides.
Does anyone know whether or not App.net has plans to release an official app for iOS and Android? One of my major apprehensions (besides what I believe to be a still unjustifiable price) is the fact that most of the current apps available appear to be shit and cost a non-trivial amount of money.
The vast majority of people (at this moment in time right now) would never, ever think of paying for a social network. That would be akin to asking them to pay for their Gmail account. It's just not going to happen.
It's motivated by the desire to sell a $5/mo plan. Simply put, $50 a year is not compelling enough for annual subscriptions when you have a monthly plan that ends up at $60 a year. If they had decided not to offer a monthly plan (or set the price higher), they would have kept their annual plan at $50.
They see monthly plans as a way to get to a larger market, which explains why that drove pricing decisions.
Funnily enough I'm of the opposite mind: users free and developers paying something like $50/month. I'd imagine placing such a price barrier there would vastly cut down on the abuse that twitter, for example, has to put up with.
Why? Developers will make money off it, the whole idea is that developers will never get screwed by app.net, and they introduced a developer incentive program to help compensate developers. If you're interested in the platform how is that not worth $5 per month?
[+] [-] eps|13 years ago|reply
The reason is Tent. If Tent drops the ball and doesn't fully execute the idea, someone else will. Their idea is bigger, better and far better maps onto the interest of various 3rd parties (such as hosted service providers) that wouldn't hesitate to support it. Commoditizing the social services is a great idea with balls and vision. Creating a paid Twitter clone is not.
[+] [-] ChuckMcM|13 years ago|reply
My reasoning is that it reaches too far without a safety net of a business model. Assuming Dalton is being truthful in his post, he's not cutting prices because he "didn't get traction" he's cutting prices because his business model is out performing his expectations, and rather than go for a higher net early on he's re-investing that margin into growing the user base.
Tent is going 'old school' like the old IETF protocols, that means waiting for adoption, having a variety of implementations, establishing a consensus, moving forward. That works great in a green field situation, but this isn't it. Look at the OpenMoko effort, free Phone OS, build it and they will come? No. Reaching too far without a model to nourish early adoption and growth. Influential? Sure but killer? Not so much.
Dalton has something which Tent does not, people willing to spend money to use it. That is why I think Tent will be a memory long before we see the end of App.net.
[+] [-] wmf|13 years ago|reply
2009: App.net will be done in a matter of months; the reason is OneSocialWeb
2005: App.net will be done in a matter of months; the reason is Appleseed
Why is this time different?
[+] [-] jonursenbach|13 years ago|reply
[+] [-] mtgx|13 years ago|reply
http://www.informationweek.com/development/open-source/tent-...
[+] [-] jasondavisfl|13 years ago|reply
[+] [-] teawithcarl|13 years ago|reply
Please get off the "twitter clone" smackdown ... it's lame. App.net is a trustworthy "blackbox" which allows ANY social construct. It dovetails with Tent.
People are building Tor concepts, non-Zynga collaborative games, new messaging protocols, etc in App.net ... beyond twitter is easy. Indeed, it's hard to keep up with all the API enhancements, and the new developer ideas. My personal goal inside App.net is a construct which brings down the GFW (firewall) of China. (Im fluent in 中文, 25+ years).
No advertisements, paying developers well. Integrity about the future ecosystem. With a $1 million in the bank, one of the best geek hangouts on earth, and world-class integrity ... it ain't going away in months.
You'd be better off predicting that it's a heady time for new social protocols.
[+] [-] david_shaw|13 years ago|reply
I think this is a great move.
We see a lot of posts on HN about raising the price to increase your userbase, but $50 was too high for a product in such an early release stage. Great for those die-hard early adopters (probably the people after whom Dalton was chasing), but terrible for the everyday Twitter user who is tired of the horrific signal-to-noise ratio on that service.
That said, my opinion would be that $24/year would be even better for an annual subscription. $2/mo is a lot of money for a "Twitter clone," but is cheap enough that it would be easy to convince your friends or colleagues to sign up. $36 might have hit the price point that I'll give it a shot as a (relatively) early adopter, but I'm not sure. $5/month, almost double the annual subscription fee, is too much for a thirty day trial run.
I'm one of the (few?) believers that app.net can really take off. I've tried Twitter, and while I'm relatively active, I can't help but feel that I'm lost in the oft-cited "echo chamber." I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.
Congrats to Dalton for lowering the price in what must lead to hugely increased participation.
[+] [-] drgath|13 years ago|reply
I'm curious... Considering your version of Twitter only consists of who you follow, why do you believe it would be better if those same people were elsewhere?
[+] [-] ErikHuisman|13 years ago|reply
Lowering the price to $36 after the initial "kickstarter" doesn't scream success to me. If it is that good people would have joined en masse for $50, no?. Will the price be discounted again in two months after everybody who's willing to pay $36 has joined?
[+] [-] epscylonb|13 years ago|reply
I never really understood this, it seems more logical to me to give all members the developer perks. Most of the users won't use them, and those that do are helping to promote the app.net service and get new subscribers.
[+] [-] rexreed|13 years ago|reply
[+] [-] cs702|13 years ago|reply
[+] [-] rexreed|13 years ago|reply
Likewise, they actually make more money with people on a monthly plan, assuming they have a customer LTV > 12 months. So, they're making $60/yr on monthly subscribers (20% more +$10), and their annual plan, while a 23% reduction from previous pricing (-$14), which means only a $4 discount on an average customer basis assuming they have an even mix of monthlies who stick around at least 12 months and their annuals. So, they would just need to grow their market such that they only need to have more monthlies than annuals, and they're making MORE money in the aggregate. (Do the math -- you'll see a mix of 58.33% monthlies and 41.67% annuals on the new plan is roughly break even with 100% annuals on the old plan).
Or even more starkly to show how this works -- if they didn't grow their annual base AT ALL, and dropped the price, they would only need 23.4% as many monthlies as annuals to break even to cover the difference. So, if they had 10,000 annuals, even if they didn't grow that at all and gave them all a price break, they would only need 2,334 monthlies to make up the difference (just under 19% of the total combined audience). And odds are high that monthlies will be a lot more than 19% of their total base. Oh, and they'll probably grow their annual subscriptions anyways.
They can see that their rate of growth for monthlies, combined with a more compelling discount for an annual program will actually increase the bottom line. Solid pricing strategy.
[+] [-] jmduke|13 years ago|reply
[+] [-] lkrubner|13 years ago|reply
If App.net is to remain true to its mission, then that $20,000 should go up over time. And if it goes up over time, it is no longer so clear that subscription levels can remain as low as they are now.
We should ask how much money App.net is making. Similar services are upfront about what percentage they take from the subscriber's money. App.net needs to offer at least that level of transparency.
[+] [-] teawithcarl|13 years ago|reply
2) App.net is NOT shooting for 1 million users. Not yet. Paul Graham challenged people in his PyCon keynote address to "build a Google Search for the top 10,000 geeks on earth". Dalton is responding to that in "social". He's not trying to scale quickly to 1 million users ... rather, he's wisely getting 10,000 top geeks involved, by sharing revenue and building a blackbox with integrity long term.
Rather than falling for a "must scale like Twitter" mindset ... ponder why Paul Graham himself suggested a smaller, ultra-geek laser focus.
Dalton is executing beautifully. Paying developers well is smart, and it's profitable. Economically when it does scale, this model has the potential to be off the charts. Patience.
[+] [-] __abc|13 years ago|reply
More importantly, App.net is still a closed box, just like Twitter. App.net still has to pay the bills, just like Twitter. When faced with the same decisions in the future, what prevent app.net from making similar decisions as Twitter?
Will $5 a user per month really cover their costs if they hit scale (I know they have other revenue streams, but I'm guessing they will have more users than anything else)?
[+] [-] k-mcgrady|13 years ago|reply
With the $5 monthly fee I think people are more likely to continue paying for it - there is no time where they will be forced to reevaluate the value the service provides.
[+] [-] samspot|13 years ago|reply
[+] [-] ruswick|13 years ago|reply
[+] [-] rcknight|13 years ago|reply
The other popular option is rivr, which has a slightly different take on things, and maybe not as pretty as others, but is free.
[+] [-] johns|13 years ago|reply
[+] [-] SubFuze|13 years ago|reply
[+] [-] untog|13 years ago|reply
[+] [-] snilan|13 years ago|reply
[+] [-] ben1040|13 years ago|reply
[+] [-] brianwillis|13 years ago|reply
[+] [-] quartus|13 years ago|reply
[+] [-] iamdann|13 years ago|reply
Did anyone else not receive this (yet?)?
[+] [-] eik3_de|13 years ago|reply
[+] [-] tolmasky|13 years ago|reply
[+] [-] eik3_de|13 years ago|reply
Homework for the bored hacker: create a graph with user-ID and days. The IDs are sequential integers. See https://github.com/appdotnet/api-spec/blob/master/resources/...
[+] [-] redguava|13 years ago|reply
Why give up so much revenue when it seems like price isn't holding them back?
[+] [-] rexreed|13 years ago|reply
They see monthly plans as a way to get to a larger market, which explains why that drove pricing decisions.
[+] [-] rbreve|13 years ago|reply
[+] [-] mootothemax|13 years ago|reply
[+] [-] k-mcgrady|13 years ago|reply
[+] [-] kmfrk|13 years ago|reply
[+] [-] brianwillis|13 years ago|reply
[+] [-] tisme|13 years ago|reply
[+] [-] unknown|13 years ago|reply
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[+] [-] kmfrk|13 years ago|reply
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[+] [-] wilfra|13 years ago|reply