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.
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?
It's bad enough I spent $50 to read it. I'm not going to pay $50 more just to mess around with trying to create an app for it. It should be free with membership to create an app for it, and charge the $50 when the app has noticeable traffic.
I didn't realise they charged an extra $50 for developers. The original comment made it sound like he wanted it 100% free. I agree, they shouldn't be charging extra on top of the membership.
Where is the guarantee that developers will -never- get screwed by App.net? Especially since the barrier to entry is $100? The DIP is a nice addition that will help those with solid ideas out of the gate, but they are still greatly restricting the developer pool by a pay-to-play model. Along with that, I still have seen no compelling reason to pay $5/month to be a member of a social network where there are sub-20k users who (I assume?) barely use the service.
App.net is just capitalizing on those annoyed with Facebook/Twitter developer policies. Great for their bank account and a really smart idea, but I still don't see value for anyone else. As someone else once said, "App.net is a social network for people who have $50 to show-off that they have $50 to blow." That's not a party I feel compelled to attend.
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.
> 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?
I think it will be better simply because spammers can sign up for hundreds of Twitter accounts and spam like crazy. When they get booted they just re-sign up. Doing so at app.net means paying $36 bucks, far less likely.
That goes for normal people too, when they pay something they tend to respect it a bit more. Forums have been doing this for years.
Right, but none of that has any effect on your own tweet stream (unless you follow spammers).
If you are talking about searching, the only way search is valuable is if a service gains critical mass, and the only way that happens is if the barrier to entry is low enough that enough users join the service, which will include spammers.
Spammy @mentions is what blocking is for. Also, you don't get @mention notifications if you don't follow them (see settings. may or may not be enabled by default).
You can only DM people where you both follow each other.
I'm assuming that "spam" is largely either @spam or follow-spam. Also, I suspect that blocking @mention after @mention gets a little old after a while.
I get almost a dozen spam mentions or mentions directed at a misspelled username everyday. That adds a lot of overhead to my usage that get old to the point where I don't even want to read my mentions steam anymore. Certainly less frequently than I used to.
I'm @derek on Twitter, so I have the same issue. If App.net ever got popular, these names would have the exact same issue. So, that's not a compelling reason to switch.
Actually, I think the quality of your stream will improve. People value things more if they pay for it. In this case, you pay for being a part of a community. It is expected that people will try to keep/improve the quality of the community.
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?
Awesome, thanks. I feel more inclined to try it out if I know that I won't have to completely re-buy an account when I inevitably want to tinker around with the developer side of things.
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.
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 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.
Because this is the first year I've heard of App.net and so many things nowadays fail once its had a moment of popularity? Tent is an improvement on twitter, which we want. Jabber is an improvement on msn which noone is running away from.
Are you suggesting that Jabber is a failure? You're aware that it's the underlying protocol for the massively popular Facebook Chat, as well as GTalk, right?
People are wanting to run away from Twitter, with various options. People aren't running away from MSN, they are running to its replacements such as facebook messenger
Yeah, same here. Suddenly, two or three months ago, HN started talking about how revolutionary this "App.net" is and I still a) don't know what the hell is it (no, their webpage doesn't help either), and b) why did someone use the name "App.net" for social something instead of an app marketplace.
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 ??, 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.
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.
A less bold statement will be that they both fall flat on their asses.
The HN/Reddit crowd is still a fairly closed crowd and no one else I know has even really mentioned App.net. Any time I bring up App.net it's met with the same "Twitter clone" skeptics.
I think it's a decent idea, but it's not really solving a hard problem. It's not feeding off of demand for a problem, but off of popularity from the HN hivemind; a crowd known for following trends over execution. I'm just a developer so I don't know much about running a business, but I cannot see how this can be sustainable when tech crowds are prone to move onto the next thing so quickly.
I don't disagree. There are many factors that are outside anyone's control which will have an inordinate effect on the durability of the protocol.
My observation was that App.net has paid users, enough of them to sustain growth apparently. Fundamentally people being paid to provide something do a better job than people who aren't paid to provide something (helps with the inevitable haters) In my experience paid users are a stronger signal than 'vision' or 'reach' as predictors of success.
As I understand it (please correct me if I'm wrong), App.net users pay a yearly subscription to be a part of the service.
We'll get a far better reading of the service once that year is up. In my experience of using annual subscription services/products the hype tends to fizzle out when the core group decide whether their initial investment was worth it. Given its current state I doubt it'll topple its closed competitors in twelve months and I see a large section of its core users ditching it for the next flavour of the week.
It reminds me a lot of MyFootballClub, a website that bought a English football team in the lower leagues with the promise of the community being completely responsible for player contracts, transfers and day-to-day running of the football club. A lot of people coughed up the cash for the site to buy Ebbsfleet United, but after a year most of them realised that what they were sold wasn't necessarily what they got and most decided not to renew. It's not an exact comparison, but I'll give App.net at least another year before I decide whether it's worth my time any more than Twitter.
Well you weren't wrong, its the subject of this blog post that App.net has added a monthly model and they've adjusted prices. I agree with you that if the initial wave of folks jump ship it will have failed to reach critical mass.
I expect it will be all about the client capture, which is to say compelling client experiences based on App.net which will drive new development their way.
I don't argue that Tent will succeed. I'm saying that they think bigger and they are effectively laying the ground work for an open infrastructure, whereby App.net is caught in the moment and works on a product. Think in terms of ideas behind each project. Tent's idea is so damn viable, it will survive Tent's own failure if it comes to that.
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.
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.
If you want to interact with the community, it's an issue.
Post something on Twitter mentioning "IPad", you'll get a lot of spam accounts replying. It's hard to engage with other users if you have to comb through the spam.
The reason parts of the tech celebrity circle (like Gruber, Siracusa, and Arment) supported App.net was because of Twitter's new hostility to third-party developers, not because of spam.
It may not be, but the odds of building another free-to-use 500 Million+ social network without raising a $1B in the process are pretty slim. I think they are trying to prove that an alternative exists to ad-driven business models for growth (the people are the product, not the customers). In which case, they aren't going for size, but for value. That's why there must be a cost.
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.
Well said.
Its a wide-open place and welcomes engineering opinions ... the price (+/-) has been hotly debated inside App.net.
I admire Dalton for moving down ONLY slightly on price.
He actually raised it on the monthly, yet allowed people to test cheaply. It's worth the premium, Dalton is wise not to give it away.
PS - members are a dream demographic, and spend $5 on apps easily. Some developers have made $ thousands via app sales already. The developer revenue share model (just announced) accrues additionally on top of app sales each month.
Exactly. The real rub will be to manage the churn rate. If their LTV on monthlies is less than 12 months, then they lose the price premium on monthlies. At $5/mo, they would need their LTV to be at least 10 months to match the old subscription rate. But I have this feeling that social networks have stickiness, which would probably mean a low churn rate. Maybe.
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 actually think of search as a heavily branded product. Like sugary drinks. Sure there are people that try somerhing new sometimes but that doesnt hurt the behemoths. I wonder if it is even possible to make a searchengine so much better than the "googles" that people referring to it as such could notice.
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.
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.
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.
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)?
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.
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