13 ms·

Don't Be A Free User

793 points by stilist 15y ago

deleted 15y ago
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kellysutton 15y ago
As someone that runs a paid service, I can tell you it's awesome to interact with customers. There's an air of respect that you don't get from completely open products.
- pavel_lishin 15y ago
  You haven't run into the ones that think that because they shelled out $15, you are their personal butler?
  - jamesaguilar 15y ago
    From what I've read, the effect is actually the opposite. If I remember correctly, patio11 had a post a while ago about how his free users consumed most of the support requests. The hypothesis is that giving users one entitlement (free use of the service) leads them to believe that they have access to others (your time).
  - kellysutton 15y ago
    Nope. I'm often surprised and thankful about how tolerant they are of bugs.
  - rgrieselhuber 15y ago
    To second this line of thought, I've noticed that the customers who pay $150 are less likely to think of you as their personal butler than the ones who paid $15. It's a weird thing.
thaumaturgy 15y ago
To partly rebut what maciej is saying here, I'd point out that Backblaze is a very successful not-free service which was also courting purchase offers; paying for a service is no guarantee that you'll get to rely on that service forever, which is a major failing of web-based services in general (and a frequently-mentioned point from my clients when I suggest using some web-based service or another). But I mostly agree with him anyway. I paid for and love pinboard. I will probably start paying for his page archival service within the next month. I'm more comfortable with it not only because of his track record so far, but because I know I am his customer. If it were a free service, I'd be far more concerned about how many concessions he'd be willing to make for his real customers -- advertisers or metrics companies or who-knows.
- chc 15y ago
  Even if that happened, wouldn't you think Backblaze is less likely to be dismantled by a potential purchaser than some free social doodad? (I'm not saying it's impossible; just that the incentive to kill a profitable product is less than the incentive to kill one that's still feeling around for a winning business model.)
- quanticle 15y ago
  I will probably start paying for his page archival service within the next month. I'm more comfortable with it not only because of his track record so far, but because I know I am his customer. If it were a free service, I'd be far more concerned about how many concessions he'd be willing to make for his real customers -- advertisers or metrics companies or who-knows. As the old saying goes, "If you're not paying, you're not the customer. You're the product." Kudos to Pinboard for asking you to become a customer, rather than settle in and be sold like a product.
  - joebadmo 15y ago
    Cash isn't the only way to pay for a product. Notice in TFA he mentions ads as a perfectly legitimate source of income.
  - canbeboth 15y ago
    If you aren't paying and the company is trying to make money, then yes, someone else is probably paying for it. However, the implication does not go the other way. If you buy a newspaper, go to a movie, or watch cable TV, you are both a customer and a product.
  - scq 15y ago
    The old saying is not very old. Here's the original: http://www.metafilter.com/95152/Userdriven-discontent#3256046 http://www.metafilter.com/95152/Userdriven-discontent#325604...
- ahoyhere 15y ago
  Is Backblaze profitable? A lot of services which charge money still don't charge enough to be self-sustaining. A self-sustaining product may still be sold. But if a product CAN'T sustain itself, it MUST either be sold, or shut down, eventually.
morisy 15y ago
Seeing Pinboard's success was really helpful in getting over the sick feeling of charging a sea of free, and I think we're finally seeing a non-trivial amount of web users understand that if you're not the customer, you're the product (after they've been burned a time or twelve). Great post, and glad to see a lot of other Hacker Newser following suit.
- maximusprime 15y ago
  That's a false choice. Using google to search doesn't make me a "product". They just happen to be able to make a ton of money showing adverts, which are useful for me also. Ignore advertising revenue at your own cost. But OTOH, this is hackernews, so continue hating advertising lead business models as usual...
  - nik_0_0 15y ago
    It does make you a product. Google can take the millions of you searching for that term and say "hey you people related to that term", and sell them based on the fact that you searched for it an a small percentage of you will click that advertisments. I almost feel that we are lucky that advertisements are more profitable when they are more useful to us, god forbid if A/B testing showed that FULL PAGE FLASHING BANNERS somehow brought in more revenue. No one is ignoring advertising revenue, harvesting millions of users in order to bring in said advertising revenue is the problem.
    - maximusprime 15y ago
      > No one is ignoring advertising revenue, harvesting millions of users in order to bring in said advertising revenue is the problem. Why is it a problem? So they show me a few adverts... big whoop. I can just ignore them. The issue is, the vast majority of people will never pay for access to online websites/apps (Me included). If you restrict yourself to the business model "charge users", then you've just got rid of 99% of the online population. Advertising means that everyone gets what they want (Apart from the very very small but overly vocal minority that don't like adverts or have privacy concerns).
dotBen 15y ago
The issue of BigCo's closing useful small services just to harvest the developers post acquisition is certainly a valid one that's worthy of debate. However, the premise that this only happens because the startup in question was "free" doesn't hold weight. Call me a cynic but the recommendation to use "paid-for" services only to avoid this outcome just seems a little too self-serving to paid-for-only service PinBoard (as excellent as it is). I don't have an exhaustive list of startup acquisitions that were then shut down, but here's a few just from a Google acquisition list I found: * PostRank was a paid-for blog data service Google acquired, shut down * Jambool was a virtual gold payment processing system Google acquired, shut down * Gizmo5 was a VOIP service Google acquired and shut down. In some cases even if a company is taking money that alone still doesn't make it viable. In other cases, like PostRank and Jambool where the $$$ being paid by customers was probably significant, acquirers like Google have other circumstances where they'll shut a profitable businesses for a 'higher goal' in a bigger project.
- garrettdimon 15y ago
  I believe the point is less about revenue being a guarantee that it won't happen and more about the fact that a lack of profit makes it increasingly likely that the product will eventually be shuttered because free isn't a sustainable model.
  - dotBen 15y ago
    But that also doesn't really ring true either because a "lack of profit" doesn't necessarily mean that an acquiring party will shut said service down either. I doubt Friendfeed makes Facebook any money, and was clearly a talent acquisition (Bret is their CTO now) but they still keep it running. You're right that anyone using any tool/service with an unsustainable model needs to be cautious. But there's a lot more to it then is being proposed by the OP.
    - adambyrtek 15y ago
      They keep the lights on, but Friendfeed might be as well dead. The impression of activity is maintained by posts imported automatically from connected accounts, and the list of supported sites haven't been updated in years. For example, neither Rdio, Spotify, nor Grooveshark are available in the music section, same with Instagram and picplz in the photos section.
todd3834 15y ago
Based on their signup help page (https://pinboard.in/help/fee/ https://pinboard.in/help/fee/) the price is "number of users * $0.001". Now there is no telling when they started with that pricing but assuming it was from the beginning they have made around $50k. Since it was created 3 years ago that is an average of around $17k/year. I realize the archival accounts are $25/year and I have no way of knowing how many they have but assuming it doubles their profits which I doubt they are still making less than $40k/year minus expenses. I'm not huge on selling out but I would rather build a large app and flip it vs run a company that profits less than $40k/yr (I did not double check my math so please forgive me if I rushed through this too fast)
- tnorthcutt 15y ago
  I think he started off with the pricing at something greater than the multiplier... $4 comes to mind.
  - flixic 15y ago
    No, it was like that for as long as I can remember. I signed up for $0.17.
- adambyrtek 15y ago
  As far as I remember, this multiplier is not valid anymore. When it comes to estimating the number of users, another post[1] on a Pinboard blog sheds some light on that. [1] http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_claw/ http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_cl...
- adambyrtek 15y ago
  As far as I remember, this multiplier is not valid anymore. When it comes to estimating the number of users, another post[1] on the Pinboard blog sheds some light on that. [1] http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_claw/ http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_cl...
  - adambyrtek 15y ago
mcherm 15y ago
Oh yeah, thanks for the reminder. I just switched to being a paid user of pinboard (which I had always intended to do but hadn't gotten around to yet).
diamondhead 15y ago
let me summarize the main idea for you: A bunch of people pay me because I store their a few hundreds lines of text, save their ass from the sites full of annoying ads like cjb.net or freeservers.com. no need for the user friendly, smart business models. no need to develop a new vision. this is the hack.
jakubw 15y ago
While I agree with the reasoning, I don't like the point being made here. A better one would be to say: be prepared for a possible shutdown of the service you're using if it's free. That means, make sure you can easily take your data out and that you're not too much dependant on it.
nknight 15y ago
He keeps saying "free software", and also says "anti-free software movement". He means "free service", which is a radically different scenario from "free software" in either sense, and should be treated as such. Whether we're talking about Free software or just freeware, the user's use of a normal piece of software on their computer doesn't suddenly disappear when the developer goes away.
- nathanbarry 15y ago
  I think the spirit of what he is saying is pretty clear (free service), but sometimes he could use better terminology.
- teaspoon 15y ago
  From the article: But free web services are not like free software. If your free software project suddenly gets popular, you gain resources: testers, developers and people willing to pitch in. If your free website takes off, you lose resources.
  - cbs 15y ago
    Perhaps thats a sign the webapp-for-things-that-don't-need-to-be-webapps model has flaws. Nahhh. That can't be it.
    - bengl3rt 15y ago
      Maybe nothing should be web apps... maybe the pipe is for content and services, and native code is for layout and interaction...
      - DannoHung 15y ago
        So are you willing to have native code pushed to you with no control over it? Because that's the major logistical advantage of webapps that has Enterprises trying to use them. Maybe when NaCL gets better...
maximusprime 15y ago
Doesn't really mention the fact you can make far more from showing your users a few adverts. (Disclaimer: I do).
gkoberger 15y ago
This article operates under the very incorrect assumption that paid services never shut down and free services are never carried on by their purchasers. See Flickr or YouTube or PayPal or Skype or Picnik or Grand Central or Picasa or Siri or mySpace or FriendFeed or FeedBurner or even pinboard's biggest competitor Delicious for examples of the latter. As for the former, there's an unlimited number of examples (for a few, try http://techcrunch.com/tag/deadpool/ http://techcrunch.com/tag/deadpool/) Unfortunately, $7/month from a few people can't keep things afloat.
- SomeCallMeTim 15y ago
  Delicious, for all intents and purposes, WAS shut down, and a new, barely related site was put up in its place. I was a Delicious user for years, with thousands of links tagged, and I continued using it for as long as I could stand under Avos, but the features that they cut and/or broke in the transition finally made me throw up my hands, give up, and switch...first to Trunk.ly, which Avos then bought and shut down (oops), and then to Pinboard. I for one welcome my new Pinboard masters, especially if they're willing to fight to keep the service alive. :)
  - hyyypr 15y ago
    What exactly do you have against delicious' new interface ? I continue using it as I always did, and except for the design I barely see any difference. Maybe I'm missing some key feature here ?
    - joshu 15y ago
      I'm struggling with it. Commas instead of spaces for tags breaks my muscle memory. It often saves my bookmarks with no tags at all because of it. I am continually tempted to rewrite it (or, more likely, its predecessor, which did more for fewer users.)
      - gruseom 15y ago
        I wish you would. Yahoo's one was slow and a dead-end but enough good remained that I could get by. This one is incoherent and sloppy. It doesn't feel like the people developing it have much understanding of (or passion for) the space.
kiba 15y ago
Anti-free software? I don't think free software is antithetical to the movement for charging a leg and an arm. The hard part is figuring out how to charge an arm and a leg for open source software. However, everyone take the easy way out by closing down on mission critical and open source the rest. I thought of a possible solution that allow everyone to charge an arm and leg while still being open source, or even public domain. Mainly, I am inspired by the kickstarter idea, but I am less interested in curating projects for one time event and more interested in business model automation. Here how it would works: You have a webcomic and you have an ever expanding archive of past comic strips. However, the next comic strip, already finished, is not available. To make the comic strip available, you ask for a collective donation of 100 dollars. Some donate 1 dollars, others 20 dollars, until the money is raised. This ensure that you will get paid every step of the way while your comic archive acts as advertising. The value for my users is the automation of numerous drudgery involved with the business model. That included tracking who donate what, tracking the deadline, the release, and so on. With an API for the service, people can get especially creative with how they release, or how they incentivize their customers. Another twist to this idea is sponsorship by advertisers and allowing advertisers getting involved with the fundraising process. They can aid the fundraising in either matching user donations or offering discounts. Of course, this will be just another idea if nobody took any effort in building the service and nobody will attempt this business model, easily. I am working on it, but it's more of a half-baked project on some private repos somewhere rather than a serious startup.
- quanticle 15y ago
  So... er how exactly would you bootstrap this business model? Yeah, this might (with a very small probability) work if you're already an established, successful webcomics author. If you're starting out, though, you have no chances of success. Who's going to chip in for a comic that may or may not be good when it is finished?
  - kiba 15y ago
    In my experience with this business model, I started with a free archive of the magazine with previous essays for people to look at. Then I use a formula to determine the ransom price. All my ransom are met, because I didn't have an extreme expectation that I was going to raise hundred of dollars at the beginning of the publication. Compared to advertising, it performs far better in term of revenues. More importantly, it doesn't uglify your site or make your site worse unlike what advertising usually does. How much better? I would need to perform manual collection to get these figures. With automation, I would be able to tell you, right down to 8 digit place. The problem with this business model is that people doesn't do the work that allows them to reach their goal, or they have an extreme expectation of how much money they are going to raise. If you don't have the fanbase, you ain't going to raise much money. It's not that it might work with a very small probability. It will works, to varying degree of success, depending on the popularity, how loyal your fans are, and so on. I seen a writer who done the exact same thing, but I don't have the link handy. So, I know it works. The more interesting question is how it will perform compared to other business models such as advertising, selling in dead tree format, merchandising, live performance, and so on, depending on the relevancy of each business model for particular industries. Like I said, advertising earn me money, but it perform terribly to how much money I can get by ransoming contents.
angryasian 15y ago
its a big cycle, the service will sell everyone cashes out, some other team picks up where the last service left off. Delicious -> pinboard anyone ? I think theres a pattern of products deteriorating after purchase for one reason or another, either not enough attention or founders leave or consumers find another product from a hot startup thats in the same space. While having a paid option should be encouraged, no service yet is something that I can't absolutely live without where theres a free alternative, and if theres something worth paying for, someone will build a free service. I'd rather encourage users to turn off ad block on sites they like, and click on links that are relevant.
dman 15y ago
Google and Facebook are counter examples of how free can be resilient. I guess it depends on the vertical. If you are aiming to scale up to world scale being free is almost essential.
- gacba 15y ago
  Google and Facebook are free because you are the product. They make craptons of money off of you using their service, selling your usage data, showing ads. That's completely different than Pinboard.
phillmv 15y ago
I love Pinboard, but it's a one man operation. Maciej is extremely susceptible to get hit by a bus tomorrow, leaving me without my $9.23 and all of my bookmarks. You're telling me that if someone offered you $1-5 mil to lead a team at insert huge tech company here you'd turn it down? Bitch, please. That chart is overall correct, but it's not like paying is suddenly going to be a panacea. I give flickr $25 a year, but I'm actively looking for replacements because it's obvious Yahoo!'s not gonna keep running it forever. Do you get what I'm trying to say?
- Sukotto 15y ago
  I suggest you backup your bookmarks on a regular basis using the handy export page http://pinboard.in/export/ http://pinboard.in/export/ You might also want to tone down the snark.
  - phillmv 15y ago
    What snark? I'm being totally straight here. I love Maciej and all of his body of work and I aim to give him many of my dollars in the future - but this is something I'm going to nitpick on. The reason why I feel comfortable using Pinboard on a day to day has nothing to do with the fact that I've paid for it because it's just as fragile and likely to suddenly disappear. It has a high "hit-by-a-bus" factor. It's because Maciej loudly proclaims his love for letting people export their data. That's it.
    - dasil003 15y ago
      Startups disappearing one way or another is orders of magnitude more common per capita than bus pancakings.
    - jarek 15y ago
      This actually occurred to me and kinda bothered me as well. I saw an example during the FBI raid outage when the site was down in the morning on the east coast and there were no updates because he was still asleep on the west coast. I just saw a post on Twitter from him about this: http://twitter.com/Pinboard/status/144174085629427714 http://twitter.com/Pinboard/status/144174085629427714: "pals of mine have agreed to wind down the site in an orderly way and open-source the code if something happens to me" That being said, I would still keep fairly regularly back-ups. With export this great, there's no excuse (short of maybe getting monthly back-up dumps delivered by email).
RexRollman 15y ago
No, the way it's done is that you offer everything for free and get a large userbase. Once you have the userbase, then you start ruining it with advertising or sell it to a company to will slowly kill it, like Yahoo or AOL.
Tcepsa 15y ago
Clearly Google is going to get bought out by somebody any day now and we can kiss those searching, mapping, and mail services goodbye. As are Facebook and Twitter--better find someone that you can pay for your social networking, stat! And obviously Hacker News isn't going to be around for long...
- jarek 15y ago
  Hacker News isn't exactly ran off VC money and in need of an exit.
  - Tcepsa 15y ago
    I think that's an important distinction. I'd have been much less grumpy about the article if he'd said "avoid using services that someone is providing for free off of investor capital with no plan for monetization."
gbelote 15y ago
I don't disagree with OP's point, but I don't think he does a good job at making it. He name-drops several popular startups that were bought out then implies they wouldn't be bought if they were making more money. Etherpad, for example, charged for it's product. You could use it for free, but if you wanted private pads and custom domains/urls you could upgrade to Pro. I don't see how "doesn't have a business model" applies to that.
deleted 15y ago
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drhayes9 15y ago
The reactions I'm seeing are mostly people zeroing in on the "paid services sometimes shut down" counterargument. And, yeah, that's true. But I don't think charging your customers for your service means that you will never consider being acquired; I think it means that your exit strategy is to serve your customers with this great service you've built. It's the difference between a long-term strategy of "God I hope we get acquired" versus one of sustainability. Sites that don't charge are floating on investor money, and investor money would really like to get oodles of money back eventually, instead of slowly growing a modest business that comfortably supports one or two people. I don't have the link anymore, but there's an excellent essay that says exactly this using a metaphor about strip mining versus farming.
- mdaines 15y ago
  http://blog.wilshipley.com/2011/04/success-and-farming-vs-mining.html http://blog.wilshipley.com/2011/04/success-and-farming-vs-mi...
robryan 15y ago
What I dislike are companies that don't start with a business model and still don't have one after some time of operation. Makes it feel like hey are being built to flip or are trying to be the next Twitter and not many have been able to pull that off. Sure ads don't always look the best but put say one small one and get some revenue started. Offer a premium account, even if the value proposition isn't great, even if it's just a cool badge for your use to say they are supporting the product, the users who love your product will probably take it up.
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tomkarlo 15y ago
I'd suggest the nature of free and paid services biases how many of each we think gets "shut down" post-acquisition. Free / freemium services will tend to have tens or hundreds of times as many "users" versus a paid service of the same value. So when one gets shut down, we all notice because so many of us had an account (even if we weren't using it.) Whereas when a paid service closes, it impacts only a tiny fraction of us in comparison, so we don't hear the same hue and cry. The fact is that for a large company like Google or Amazon, the $$$ income from most small startup acquisitions (ads or paid) isn't large enough to be a factor in the decision to continue running that product. Either they believe that it's going to turn into a business that does tens to hundreds of millions of dollars in sales a year, or they don't and it's better to move those developers and resources off to a project that might. I've seen this firsthand - I've had to fight to maintain services that were making lots of money with a few staffers, because a large company just didn't think they were worth the hassle of supporting from a legal and administrative perspective. And I understood that point of view from a management perspective, in many cases.
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icebraining 15y ago
I prefer an alternative: use a free service, but assume it'll close next week; the key is to make them as close to a commodity as possible. All services eventually close, free and paid, but as long as you control your data, you can move when it happens. Knowing how to script something up to push the data to the new service is important too. For example, I use Google Apps for my email. I'm not worry that it'll be closed tomorrow, but for all I know, some glitch might kill my account and Google's support isn't. So I got my own domain, I use an email client and keep very regular backups on everything. If it closed, my only loss would be the couple of hours while the MX records update.
DanielBMarkham 15y ago
This article brings up a good point: if you just found some super-cool free web application that you love? Odds are the only thing you're doing when you use it and recommend it to your friends is creating a nice resume for some large company to do a "talent acquisition" Large companies love this -- they find a couple of guys who are able to identify and engage audiences and then they kill their product and stick them on some other product that the company wants pumped. Web apps are about eyeballs, right? Start-ups are about teams, right? Well what's the logical conclusion then? Startups that gain eyeballs with income-free business models only have themselves -- the team -- to sell. And from some of these sales, it looks like there's serious money in "pump and dump" entrepreneurialism. This also suggests that there is a pecking order. At the bottom we have start-ups that don't have traction. Then we have start-ups with traction but no income. Then start-ups who can mostly break even. Finally start-ups that have momentum (extra super bonus points for big momentum in a huge market) The more I look at this model, the better bootstrapping looks.
- drhayes9 15y ago
  Amy Hoy is a big proponent of bootstrapping. Her 30x500 class seems to rock (according to the sample materials she has out there), and she has some choice words on the subject: http://unicornfree.com/2011/fuck-glory-startups-are-one-long-con/ http://unicornfree.com/2011/fuck-glory-startups-are-one-long...
  - joelhooks 15y ago
    I'm currently enjoying the 30x500 class. It certainly isn't free, but it is excellent.
  - run4yourlives 15y ago
    Amy Hoy is a kick-ass writer.
  - davidw 15y ago
    Rob Walling's "Start Small, Stay Small" is pretty good too, and has less gratuitous profanity.
jalada 15y ago
Upvoted purely for the laughs I got when I read "Every morning I wake up and dive into my vault of golden coins."
jsilence 15y ago
Put a Flattr button on your free cool website. (https://flattr.com/ https://flattr.com/) Problem solved.
- jsilence 15y ago
  Ok, maybe I should have worded it: Another alternative in between paysite and freesite would be to give the user the opportunity to pay whatever they want. With Flattr or Kachingle.
  - vetler 15y ago
    But still, is it really as easy as that? Problem solved? I'm sure some can survive on donations alone, but how would you know?
kd1220 15y ago
If you replaced "free software/service" with "person" then a sensible title could be "Don't Have No-Strings-Attached Relationships." I think the author is giving bad advice. If you're using a free service that doesn't appear to have any revenue stream, then just assume it won't be around when you need it. There's nothing bad about using a free service. You don't have to bug the owners to monetize. It's a technological fling. Just like with interpersonal relationships, a company isn't going to tell its users "Hey, we're not going to be around in 2 years. This is just a temporary thing." Maybe Gowalla just wasn't that into its users.
tlots 15y ago
"You might call this the anti-free-software movement." While I agree with his argument (and I'm a pinboard customer), I am not for mixing the term 'free software' with 'free, unmodifiable, supported, centrally hosted web service'. To me, free software means code sharing and the ability to modify software and run it personally as I choose. The difference boils down to resources. With free software I do get the source; however, I need to provide the environment, time, and self reliance support-wise (or a decent community).
- ahoyhere 15y ago
  It was clearly a joke. Laugh a little. :)
  - tlots 15y ago
    oh! lal
wavephorm 15y ago
The users have spoken. They want free software products. Open source, piracy, and free websites, together have burned into people's heads that software is worthless regardless of the platform (windows, ios, web, server-side). Unless this mentality changes, expect all software to continue this cycle of froth and recycling.
charlieok 15y ago
I'll put in a good word for a return to the days of actually running an online service yourself, instead of just using remote services. If you are the one running the software, you have control.
blackdivine 15y ago
Loved the article. It was exactly to the point, precise. No more reading first paragraph and ok.. gah... Also the Disclaimer is a pure win "DISCLAIMER: I run a paid bookmarking site. Every morning I wake up and dive into my vault of golden coins."
zdw 15y ago
So, where do I go to pay for Twitter?
diamondhead 15y ago
See the irony: pinboard is a clone of delicious' initial version. it copied the idea, the visual design and started selling it. In every success story of pinboard, I'm very surprised to see how people are impressed from a carbon copy. Let me introduce myself: I'm a guy who bookmarks everyday for 5 years, on delicious. After the Yahoo acquire, it was redesigned. And I was annoyed. I started looking at the alternatives. Most of them were crappy except Pinboard. It was a good copy of old Delicious. And I decided to use it just because it was a good copy of Delicious! Then, I noticed that Pinboard is not free. And what it provides is nothing but keeping some text on a database. Same idea, almost same design but it's not free. Let the owner explain why it's not free: it's unsocial. and it'll be online unless a 90% percent of users keep paying it. It's not ethical, Pinboard. If I think that it's not a waste of time, I'll code some scripts to store bookmarks in Dropbox for your users. It'll be under WTF PL license so that you can sell it.
diamondhead 15y ago
Question: what happens when a guy copies pinboard (in other words, the old delicious) and open sources it? A community evolves. And some of paid pinboard users switch to the free one because it's open source, some people implement some cool stuff periodically, it'll be maintained forever. Another question: What happens when pinboard makes less money? These questions were answered 30 years ago by OSS community.
- jarek 15y ago
  Sure, the code will be open source. It will still have to be hosted somewhere. Who'll pay the bills? Pinboard's long-term income is primarily from the archiving users. The storage and full-text search index would be even more expensive to host for free.
  - diamondhead 15y ago
    I search my bookmarks with grep thanks to a local, plain text copy of them. It's so fast and can be programmed in a way that I can search I bookmarks before I open my browser. There are way better architectures to have an unsocial bookmarking service. Pinboard has the worst one and because its focus is to copy Delicious and make money. In other words, it creates the problem first, and gives users an expensive solution. An open source solution that can kill Pinboard may be based on even DropBox. OSS community is good at solving real problems.
    - jarek 15y ago
      Sounds like Pinboard isn't the solution for you. However, it evidently appeals to many, myself included. I don't think I ever have my browser not open. I use something like four different computers, not including mobile devices, and appreciate the central copy without having to think about syncing it. I don't worry about setting up scripts on my local machine or updating my local plain text copy so that it can be searched. For the archiving users, they don't have to manually save the files of each website they'd like to search later. If you believe you can do bookmarking better and free, then do it. If it matches what I'm using Pinboard for, and is better (and doesn't use Dropbox), I'll switch.
einhverfr 15y ago
There are a bunch of ways of monetizing free use though. I work with Free/Open Source accounting/ERP software and I estimate that less than 1% of our users put money back in our pockets.... But at the same time a lot put money in somebody's pockets, and this grows the community which makes us all more successful and prosperous.
gcr 15y ago
At risk of squabbling over semantics, "Free software", as used in the article, is orthoganal to open-source software. If the source code for these websites were released, even at the end, there would be no issue. Case in point: Etherpad released their source code just before taking their wave dive, starting Piratepad et al.
- jarek 15y ago
  While you are correct that the article takes some liberties with its use of "free software", having the source code won't help you much with applications that need beefier hosting to truly be useful.
nhangen 15y ago
Finding out that Trunk.ly, which I've grown to love, is shutting down...well it flat out pisses me off. Great post. Thanks for having the courage to state the truth, that most startup founders don't give a about users.
- ramblerman 15y ago
  > Thanks for having the courage to state the truth, that most startup founders don't give a about users. Is this a public secret. Do you think Steve Jobs was so obsessed with user experience because he cared about you personally?
  - nhangen 15y ago
    No, I don't think he cared about me personally, but I believe he knew where his bread was buttered.
r0s 15y ago
I'm all for it, transparent business models! Also, I will no longer tolerate advertizing in my paid content. Seems great, when do we start?
pbreit 15y ago
The reason not as many paid services are acquired is because they don't get enough traction to entice a buyer.
patio11 15y ago
I think geeks have severely irrational expectations as to what they are "owed" by someone just because that someone has created something which they used or enjoyed.
- phil 15y ago
  If you don't think this is a major problem with web services, you must have either not been around long, or don't use many of them.
  - patio11 15y ago
    "We can observe that many online services close" does not imply "People who make online services have a moral obligation not to close."
    - phil 15y ago
      It's not a moral obligation. It's that there are structural reasons why most web services have a short lifespan. That's a problem because it makes it hard to rely on any new service, and that's eroding user trust. At least among people I talk to, there's a lot more skepticism about new stuff than there was a few years ago.
- jcr 15y ago
  I hate to seem so pessimistic, but it's more than just "geeks," instead, most people suffer from a sense of entitlement.
- fauigerzigerk 15y ago
  I couldn't disagree more. Startups just going away over night is _the_ major objection I hear from business users (small and large) against using any of these products. Purely consumer oriented entertainment kind of apps may be a different matter, but for anything else consumers are very apprehensive when there is any talk of losing access to an app they rely on. Unlike geeks, they can't just take some CSV dump and move their data elsewhere. For them, the UI is the data. You may be annoyed about the tone in which some geeks complain about free apps going away, but don't let that mislead you into thinking geeks are the issue here. There is a huge issue and it's not opinionated geeks.
j_baker 15y ago
Like a service? Make them charge you or show you ads. If they won't do it, clone them and do it yourself. Soon you'll be the only game in town! "We're just like service x, but we charge you money!" There is no way this business model isn't a good idea.
smashing 15y ago
Can I still use this news.ycombinator site for free or should I stop until I can be charged for its usage?
neuromancer2600 15y ago
Maciej Ceglowski provided more insights into his views about pricing and free services in this podcast interview from January this year (just ff to 24:19): http://5by5.tv/founderstalk/9 http://5by5.tv/founderstalk/9 His major point is that users regard bookmarking sites as a bank where they want their bookmarks safe and secure. I find that a pretty compelling difference. So the statement still holds that if you don't pay for a product, you are the product.
rradu 15y ago
Do people just like paying for things? If a company can find a way to make money off ads and keep the product free, I'll gladly take that over paying a subscription fee.
- mcantor 15y ago
  I like paying for things. I'd rather pay $5 - $50 for a mobile app than see ads.
gregw100 15y ago
I'm a free user
epaga 15y ago
"DISCLAIMER: I run a paid bookmarking site. Every morning I wake up and dive into my vault of golden coins." Best. Disclaimer. Ever.
orijing 15y ago
The author didn't bring up the point that many of those services became successful (not yet profitable) because they were free. The years when they had no ads and charged nothing are considered loss-leaders in order to build a large network, because their services typically benefit strongly from first order network effects. Google didn't always have such an indisputable business model. Who knew search was so profitable? Would it have been as successful if it started charging users right off the bat, or covering the results pages with (irrelevant) ads before contextual ads were developed?
ssgrfk 15y ago
I Agree. -> http://www.gigatools.com http://www.gigatools.com
Havoc 15y ago
Both paid & free have their place in the world. Not quite sure why the one is being portrayed as evil? I also don't think its the responsibility/right of the user to fix the business model of the company ("Make them charge you or show you ads."). To me the "pump and dump" approach is perfectly legit. Just make sure nobody gets hurt. e.g. Allow customer to export their data. Companies aim to make money, not win a papal election.
- Havoc 15y ago
  Almost forgot: Dear HN. Please charge me money or show ads. /s
fuckmoney 15y ago
Wikipedia? "Like a service? Make them charge you or show you ads. If they won't do it, clone them and do it yourself. Soon you'll be the only game in town! " If a free website service shuts down you can make your own. Being competitive and ruthless may work financially but it isn't right and unlike a corporation in constant pursuit of profit an owner of a free website is free to act morally and avoid monetary perversion. I'd prefer if websites were a little less stable than if the internet was exclusively for the rich by the rich.
drdaeman 15y ago
While he has a point, I feel somehow offensed^W trolled by such one-sided opinion. Should someone fork HN and make a paid/ad-filled version of it? Doubt so. It's probably because I totally don't get that "oh, their service is so good I want them charge more" mindset.

793 points by stilist 15y ago

deleted 15y ago

[deleted]

As someone that runs a paid service, I can tell you it's awesome to interact with customers. There's an air of respect that you don't get from completely open products.

pavel_lishin 15y ago
You haven't run into the ones that think that because they shelled out $15, you are their personal butler?
- jamesaguilar 15y ago
  From what I've read, the effect is actually the opposite. If I remember correctly, patio11 had a post a while ago about how his free users consumed most of the support requests. The hypothesis is that giving users one entitlement (free use of the service) leads them to believe that they have access to others (your time).
- kellysutton 15y ago
  Nope. I'm often surprised and thankful about how tolerant they are of bugs.
- rgrieselhuber 15y ago
  To second this line of thought, I've noticed that the customers who pay $150 are less likely to think of you as their personal butler than the ones who paid $15. It's a weird thing.

thaumaturgy 15y ago

To partly rebut what maciej is saying here, I'd point out that Backblaze is a very successful not-free service which was also courting purchase offers; paying for a service is no guarantee that you'll get to rely on that service forever, which is a major failing of web-based services in general (and a frequently-mentioned point from my clients when I suggest using some web-based service or another). But I mostly agree with him anyway. I paid for and love pinboard. I will probably start paying for his page archival service within the next month. I'm more comfortable with it not only because of his track record so far, but because I know I am his customer. If it were a free service, I'd be far more concerned about how many concessions he'd be willing to make for his real customers -- advertisers or metrics companies or who-knows.

chc 15y ago
Even if that happened, wouldn't you think Backblaze is less likely to be dismantled by a potential purchaser than some free social doodad? (I'm not saying it's impossible; just that the incentive to kill a profitable product is less than the incentive to kill one that's still feeling around for a winning business model.)
quanticle 15y ago
I will probably start paying for his page archival service within the next month. I'm more comfortable with it not only because of his track record so far, but because I know I am his customer. If it were a free service, I'd be far more concerned about how many concessions he'd be willing to make for his real customers -- advertisers or metrics companies or who-knows. As the old saying goes, "If you're not paying, you're not the customer. You're the product." Kudos to Pinboard for asking you to become a customer, rather than settle in and be sold like a product.
- joebadmo 15y ago
  Cash isn't the only way to pay for a product. Notice in TFA he mentions ads as a perfectly legitimate source of income.
- canbeboth 15y ago
  If you aren't paying and the company is trying to make money, then yes, someone else is probably paying for it. However, the implication does not go the other way. If you buy a newspaper, go to a movie, or watch cable TV, you are both a customer and a product.
- scq 15y ago
  The old saying is not very old. Here's the original: http://www.metafilter.com/95152/Userdriven-discontent#3256046 http://www.metafilter.com/95152/Userdriven-discontent#325604...
ahoyhere 15y ago
Is Backblaze profitable? A lot of services which charge money still don't charge enough to be self-sustaining. A self-sustaining product may still be sold. But if a product CAN'T sustain itself, it MUST either be sold, or shut down, eventually.

morisy 15y ago

Seeing Pinboard's success was really helpful in getting over the sick feeling of charging a sea of free, and I think we're finally seeing a non-trivial amount of web users understand that if you're not the customer, you're the product (after they've been burned a time or twelve). Great post, and glad to see a lot of other Hacker Newser following suit.

maximusprime 15y ago
That's a false choice. Using google to search doesn't make me a "product". They just happen to be able to make a ton of money showing adverts, which are useful for me also. Ignore advertising revenue at your own cost. But OTOH, this is hackernews, so continue hating advertising lead business models as usual...
- nik_0_0 15y ago
  It does make you a product. Google can take the millions of you searching for that term and say "hey you people related to that term", and sell them based on the fact that you searched for it an a small percentage of you will click that advertisments. I almost feel that we are lucky that advertisements are more profitable when they are more useful to us, god forbid if A/B testing showed that FULL PAGE FLASHING BANNERS somehow brought in more revenue. No one is ignoring advertising revenue, harvesting millions of users in order to bring in said advertising revenue is the problem.
  - maximusprime 15y ago
    > No one is ignoring advertising revenue, harvesting millions of users in order to bring in said advertising revenue is the problem. Why is it a problem? So they show me a few adverts... big whoop. I can just ignore them. The issue is, the vast majority of people will never pay for access to online websites/apps (Me included). If you restrict yourself to the business model "charge users", then you've just got rid of 99% of the online population. Advertising means that everyone gets what they want (Apart from the very very small but overly vocal minority that don't like adverts or have privacy concerns).

dotBen 15y ago

The issue of BigCo's closing useful small services just to harvest the developers post acquisition is certainly a valid one that's worthy of debate. However, the premise that this only happens because the startup in question was "free" doesn't hold weight. Call me a cynic but the recommendation to use "paid-for" services only to avoid this outcome just seems a little too self-serving to paid-for-only service PinBoard (as excellent as it is). I don't have an exhaustive list of startup acquisitions that were then shut down, but here's a few just from a Google acquisition list I found: * PostRank was a paid-for blog data service Google acquired, shut down * Jambool was a virtual gold payment processing system Google acquired, shut down * Gizmo5 was a VOIP service Google acquired and shut down. In some cases even if a company is taking money that alone still doesn't make it viable. In other cases, like PostRank and Jambool where the $$$ being paid by customers was probably significant, acquirers like Google have other circumstances where they'll shut a profitable businesses for a 'higher goal' in a bigger project.

garrettdimon 15y ago
I believe the point is less about revenue being a guarantee that it won't happen and more about the fact that a lack of profit makes it increasingly likely that the product will eventually be shuttered because free isn't a sustainable model.
- dotBen 15y ago
  But that also doesn't really ring true either because a "lack of profit" doesn't necessarily mean that an acquiring party will shut said service down either. I doubt Friendfeed makes Facebook any money, and was clearly a talent acquisition (Bret is their CTO now) but they still keep it running. You're right that anyone using any tool/service with an unsustainable model needs to be cautious. But there's a lot more to it then is being proposed by the OP.
  - adambyrtek 15y ago
    They keep the lights on, but Friendfeed might be as well dead. The impression of activity is maintained by posts imported automatically from connected accounts, and the list of supported sites haven't been updated in years. For example, neither Rdio, Spotify, nor Grooveshark are available in the music section, same with Instagram and picplz in the photos section.

todd3834 15y ago

Based on their signup help page (https://pinboard.in/help/fee/ https://pinboard.in/help/fee/) the price is "number of users * $0.001". Now there is no telling when they started with that pricing but assuming it was from the beginning they have made around $50k. Since it was created 3 years ago that is an average of around $17k/year. I realize the archival accounts are $25/year and I have no way of knowing how many they have but assuming it doubles their profits which I doubt they are still making less than $40k/year minus expenses. I'm not huge on selling out but I would rather build a large app and flip it vs run a company that profits less than $40k/yr (I did not double check my math so please forgive me if I rushed through this too fast)

tnorthcutt 15y ago
I think he started off with the pricing at something greater than the multiplier... $4 comes to mind.
- flixic 15y ago
  No, it was like that for as long as I can remember. I signed up for $0.17.
adambyrtek 15y ago
As far as I remember, this multiplier is not valid anymore. When it comes to estimating the number of users, another post[1] on a Pinboard blog sheds some light on that. [1] http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_claw/ http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_cl...
adambyrtek 15y ago
As far as I remember, this multiplier is not valid anymore. When it comes to estimating the number of users, another post[1] on the Pinboard blog sheds some light on that. [1] http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_claw/ http://blog.pinboard.in/2011/10/spikes_logs_and_the_power_cl...
- adambyrtek 15y ago

mcherm 15y ago

Oh yeah, thanks for the reminder. I just switched to being a paid user of pinboard (which I had always intended to do but hadn't gotten around to yet).

diamondhead 15y ago

let me summarize the main idea for you: A bunch of people pay me because I store their a few hundreds lines of text, save their ass from the sites full of annoying ads like cjb.net or freeservers.com. no need for the user friendly, smart business models. no need to develop a new vision. this is the hack.

jakubw 15y ago

While I agree with the reasoning, I don't like the point being made here. A better one would be to say: be prepared for a possible shutdown of the service you're using if it's free. That means, make sure you can easily take your data out and that you're not too much dependant on it.

nknight 15y ago

He keeps saying "free software", and also says "anti-free software movement". He means "free service", which is a radically different scenario from "free software" in either sense, and should be treated as such. Whether we're talking about Free software or just freeware, the user's use of a normal piece of software on their computer doesn't suddenly disappear when the developer goes away.

nathanbarry 15y ago
I think the spirit of what he is saying is pretty clear (free service), but sometimes he could use better terminology.
teaspoon 15y ago
From the article: But free web services are not like free software. If your free software project suddenly gets popular, you gain resources: testers, developers and people willing to pitch in. If your free website takes off, you lose resources.
- cbs 15y ago
  Perhaps thats a sign the webapp-for-things-that-don't-need-to-be-webapps model has flaws. Nahhh. That can't be it.
  - bengl3rt 15y ago
    Maybe nothing should be web apps... maybe the pipe is for content and services, and native code is for layout and interaction...
    - DannoHung 15y ago
      So are you willing to have native code pushed to you with no control over it? Because that's the major logistical advantage of webapps that has Enterprises trying to use them. Maybe when NaCL gets better...

maximusprime 15y ago

Doesn't really mention the fact you can make far more from showing your users a few adverts. (Disclaimer: I do).

gkoberger 15y ago

This article operates under the very incorrect assumption that paid services never shut down and free services are never carried on by their purchasers. See Flickr or YouTube or PayPal or Skype or Picnik or Grand Central or Picasa or Siri or mySpace or FriendFeed or FeedBurner or even pinboard's biggest competitor Delicious for examples of the latter. As for the former, there's an unlimited number of examples (for a few, try http://techcrunch.com/tag/deadpool/ http://techcrunch.com/tag/deadpool/) Unfortunately, $7/month from a few people can't keep things afloat.

SomeCallMeTim 15y ago
Delicious, for all intents and purposes, WAS shut down, and a new, barely related site was put up in its place. I was a Delicious user for years, with thousands of links tagged, and I continued using it for as long as I could stand under Avos, but the features that they cut and/or broke in the transition finally made me throw up my hands, give up, and switch...first to Trunk.ly, which Avos then bought and shut down (oops), and then to Pinboard. I for one welcome my new Pinboard masters, especially if they're willing to fight to keep the service alive. :)
- hyyypr 15y ago
  What exactly do you have against delicious' new interface ? I continue using it as I always did, and except for the design I barely see any difference. Maybe I'm missing some key feature here ?
  - joshu 15y ago
    I'm struggling with it. Commas instead of spaces for tags breaks my muscle memory. It often saves my bookmarks with no tags at all because of it. I am continually tempted to rewrite it (or, more likely, its predecessor, which did more for fewer users.)
    - gruseom 15y ago
      I wish you would. Yahoo's one was slow and a dead-end but enough good remained that I could get by. This one is incoherent and sloppy. It doesn't feel like the people developing it have much understanding of (or passion for) the space.

kiba 15y ago

Anti-free software? I don't think free software is antithetical to the movement for charging a leg and an arm. The hard part is figuring out how to charge an arm and a leg for open source software. However, everyone take the easy way out by closing down on mission critical and open source the rest. I thought of a possible solution that allow everyone to charge an arm and leg while still being open source, or even public domain. Mainly, I am inspired by the kickstarter idea, but I am less interested in curating projects for one time event and more interested in business model automation. Here how it would works: You have a webcomic and you have an ever expanding archive of past comic strips. However, the next comic strip, already finished, is not available. To make the comic strip available, you ask for a collective donation of 100 dollars. Some donate 1 dollars, others 20 dollars, until the money is raised. This ensure that you will get paid every step of the way while your comic archive acts as advertising. The value for my users is the automation of numerous drudgery involved with the business model. That included tracking who donate what, tracking the deadline, the release, and so on. With an API for the service, people can get especially creative with how they release, or how they incentivize their customers. Another twist to this idea is sponsorship by advertisers and allowing advertisers getting involved with the fundraising process. They can aid the fundraising in either matching user donations or offering discounts. Of course, this will be just another idea if nobody took any effort in building the service and nobody will attempt this business model, easily. I am working on it, but it's more of a half-baked project on some private repos somewhere rather than a serious startup.

quanticle 15y ago
So... er how exactly would you bootstrap this business model? Yeah, this might (with a very small probability) work if you're already an established, successful webcomics author. If you're starting out, though, you have no chances of success. Who's going to chip in for a comic that may or may not be good when it is finished?
- kiba 15y ago
  In my experience with this business model, I started with a free archive of the magazine with previous essays for people to look at. Then I use a formula to determine the ransom price. All my ransom are met, because I didn't have an extreme expectation that I was going to raise hundred of dollars at the beginning of the publication. Compared to advertising, it performs far better in term of revenues. More importantly, it doesn't uglify your site or make your site worse unlike what advertising usually does. How much better? I would need to perform manual collection to get these figures. With automation, I would be able to tell you, right down to 8 digit place. The problem with this business model is that people doesn't do the work that allows them to reach their goal, or they have an extreme expectation of how much money they are going to raise. If you don't have the fanbase, you ain't going to raise much money. It's not that it might work with a very small probability. It will works, to varying degree of success, depending on the popularity, how loyal your fans are, and so on. I seen a writer who done the exact same thing, but I don't have the link handy. So, I know it works. The more interesting question is how it will perform compared to other business models such as advertising, selling in dead tree format, merchandising, live performance, and so on, depending on the relevancy of each business model for particular industries. Like I said, advertising earn me money, but it perform terribly to how much money I can get by ransoming contents.

angryasian 15y ago

its a big cycle, the service will sell everyone cashes out, some other team picks up where the last service left off. Delicious -> pinboard anyone ? I think theres a pattern of products deteriorating after purchase for one reason or another, either not enough attention or founders leave or consumers find another product from a hot startup thats in the same space. While having a paid option should be encouraged, no service yet is something that I can't absolutely live without where theres a free alternative, and if theres something worth paying for, someone will build a free service. I'd rather encourage users to turn off ad block on sites they like, and click on links that are relevant.

dman 15y ago

Google and Facebook are counter examples of how free can be resilient. I guess it depends on the vertical. If you are aiming to scale up to world scale being free is almost essential.

gacba 15y ago
Google and Facebook are free because you are the product. They make craptons of money off of you using their service, selling your usage data, showing ads. That's completely different than Pinboard.

phillmv 15y ago

I love Pinboard, but it's a one man operation. Maciej is extremely susceptible to get hit by a bus tomorrow, leaving me without my $9.23 and all of my bookmarks. You're telling me that if someone offered you $1-5 mil to lead a team at insert huge tech company here you'd turn it down? Bitch, please. That chart is overall correct, but it's not like paying is suddenly going to be a panacea. I give flickr $25 a year, but I'm actively looking for replacements because it's obvious Yahoo!'s not gonna keep running it forever. Do you get what I'm trying to say?

Sukotto 15y ago
I suggest you backup your bookmarks on a regular basis using the handy export page http://pinboard.in/export/ http://pinboard.in/export/ You might also want to tone down the snark.
- phillmv 15y ago
  What snark? I'm being totally straight here. I love Maciej and all of his body of work and I aim to give him many of my dollars in the future - but this is something I'm going to nitpick on. The reason why I feel comfortable using Pinboard on a day to day has nothing to do with the fact that I've paid for it because it's just as fragile and likely to suddenly disappear. It has a high "hit-by-a-bus" factor. It's because Maciej loudly proclaims his love for letting people export their data. That's it.
  - dasil003 15y ago
    Startups disappearing one way or another is orders of magnitude more common per capita than bus pancakings.
  - jarek 15y ago
    This actually occurred to me and kinda bothered me as well. I saw an example during the FBI raid outage when the site was down in the morning on the east coast and there were no updates because he was still asleep on the west coast. I just saw a post on Twitter from him about this: http://twitter.com/Pinboard/status/144174085629427714 http://twitter.com/Pinboard/status/144174085629427714: "pals of mine have agreed to wind down the site in an orderly way and open-source the code if something happens to me" That being said, I would still keep fairly regularly back-ups. With export this great, there's no excuse (short of maybe getting monthly back-up dumps delivered by email).

RexRollman 15y ago

No, the way it's done is that you offer everything for free and get a large userbase. Once you have the userbase, then you start ruining it with advertising or sell it to a company to will slowly kill it, like Yahoo or AOL.

Tcepsa 15y ago

Clearly Google is going to get bought out by somebody any day now and we can kiss those searching, mapping, and mail services goodbye. As are Facebook and Twitter--better find someone that you can pay for your social networking, stat! And obviously Hacker News isn't going to be around for long...

jarek 15y ago
Hacker News isn't exactly ran off VC money and in need of an exit.
- Tcepsa 15y ago
  I think that's an important distinction. I'd have been much less grumpy about the article if he'd said "avoid using services that someone is providing for free off of investor capital with no plan for monetization."

gbelote 15y ago

I don't disagree with OP's point, but I don't think he does a good job at making it. He name-drops several popular startups that were bought out then implies they wouldn't be bought if they were making more money. Etherpad, for example, charged for it's product. You could use it for free, but if you wanted private pads and custom domains/urls you could upgrade to Pro. I don't see how "doesn't have a business model" applies to that.

deleted 15y ago

[deleted]

drhayes9 15y ago

The reactions I'm seeing are mostly people zeroing in on the "paid services sometimes shut down" counterargument. And, yeah, that's true. But I don't think charging your customers for your service means that you will never consider being acquired; I think it means that your exit strategy is to serve your customers with this great service you've built. It's the difference between a long-term strategy of "God I hope we get acquired" versus one of sustainability. Sites that don't charge are floating on investor money, and investor money would really like to get oodles of money back eventually, instead of slowly growing a modest business that comfortably supports one or two people. I don't have the link anymore, but there's an excellent essay that says exactly this using a metaphor about strip mining versus farming.

mdaines 15y ago
http://blog.wilshipley.com/2011/04/success-and-farming-vs-mining.html http://blog.wilshipley.com/2011/04/success-and-farming-vs-mi...

robryan 15y ago

What I dislike are companies that don't start with a business model and still don't have one after some time of operation. Makes it feel like hey are being built to flip or are trying to be the next Twitter and not many have been able to pull that off. Sure ads don't always look the best but put say one small one and get some revenue started. Offer a premium account, even if the value proposition isn't great, even if it's just a cool badge for your use to say they are supporting the product, the users who love your product will probably take it up.

deleted 15y ago

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tomkarlo 15y ago

I'd suggest the nature of free and paid services biases how many of each we think gets "shut down" post-acquisition. Free / freemium services will tend to have tens or hundreds of times as many "users" versus a paid service of the same value. So when one gets shut down, we all notice because so many of us had an account (even if we weren't using it.) Whereas when a paid service closes, it impacts only a tiny fraction of us in comparison, so we don't hear the same hue and cry. The fact is that for a large company like Google or Amazon, the $$$ income from most small startup acquisitions (ads or paid) isn't large enough to be a factor in the decision to continue running that product. Either they believe that it's going to turn into a business that does tens to hundreds of millions of dollars in sales a year, or they don't and it's better to move those developers and resources off to a project that might. I've seen this firsthand - I've had to fight to maintain services that were making lots of money with a few staffers, because a large company just didn't think they were worth the hassle of supporting from a legal and administrative perspective. And I understood that point of view from a management perspective, in many cases.

deleted 15y ago

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icebraining 15y ago

I prefer an alternative: use a free service, but assume it'll close next week; the key is to make them as close to a commodity as possible. All services eventually close, free and paid, but as long as you control your data, you can move when it happens. Knowing how to script something up to push the data to the new service is important too. For example, I use Google Apps for my email. I'm not worry that it'll be closed tomorrow, but for all I know, some glitch might kill my account and Google's support isn't. So I got my own domain, I use an email client and keep very regular backups on everything. If it closed, my only loss would be the couple of hours while the MX records update.

DanielBMarkham 15y ago

This article brings up a good point: if you just found some super-cool free web application that you love? Odds are the only thing you're doing when you use it and recommend it to your friends is creating a nice resume for some large company to do a "talent acquisition" Large companies love this -- they find a couple of guys who are able to identify and engage audiences and then they kill their product and stick them on some other product that the company wants pumped. Web apps are about eyeballs, right? Start-ups are about teams, right? Well what's the logical conclusion then? Startups that gain eyeballs with income-free business models only have themselves -- the team -- to sell. And from some of these sales, it looks like there's serious money in "pump and dump" entrepreneurialism. This also suggests that there is a pecking order. At the bottom we have start-ups that don't have traction. Then we have start-ups with traction but no income. Then start-ups who can mostly break even. Finally start-ups that have momentum (extra super bonus points for big momentum in a huge market) The more I look at this model, the better bootstrapping looks.

drhayes9 15y ago
Amy Hoy is a big proponent of bootstrapping. Her 30x500 class seems to rock (according to the sample materials she has out there), and she has some choice words on the subject: http://unicornfree.com/2011/fuck-glory-startups-are-one-long-con/ http://unicornfree.com/2011/fuck-glory-startups-are-one-long...
- joelhooks 15y ago
  I'm currently enjoying the 30x500 class. It certainly isn't free, but it is excellent.
- run4yourlives 15y ago
  Amy Hoy is a kick-ass writer.
- davidw 15y ago
  Rob Walling's "Start Small, Stay Small" is pretty good too, and has less gratuitous profanity.

jalada 15y ago

Upvoted purely for the laughs I got when I read "Every morning I wake up and dive into my vault of golden coins."

jsilence 15y ago

Put a Flattr button on your free cool website. (https://flattr.com/ https://flattr.com/) Problem solved.

jsilence 15y ago
Ok, maybe I should have worded it: Another alternative in between paysite and freesite would be to give the user the opportunity to pay whatever they want. With Flattr or Kachingle.
- vetler 15y ago
  But still, is it really as easy as that? Problem solved? I'm sure some can survive on donations alone, but how would you know?

kd1220 15y ago

If you replaced "free software/service" with "person" then a sensible title could be "Don't Have No-Strings-Attached Relationships." I think the author is giving bad advice. If you're using a free service that doesn't appear to have any revenue stream, then just assume it won't be around when you need it. There's nothing bad about using a free service. You don't have to bug the owners to monetize. It's a technological fling. Just like with interpersonal relationships, a company isn't going to tell its users "Hey, we're not going to be around in 2 years. This is just a temporary thing." Maybe Gowalla just wasn't that into its users.

tlots 15y ago

"You might call this the anti-free-software movement." While I agree with his argument (and I'm a pinboard customer), I am not for mixing the term 'free software' with 'free, unmodifiable, supported, centrally hosted web service'. To me, free software means code sharing and the ability to modify software and run it personally as I choose. The difference boils down to resources. With free software I do get the source; however, I need to provide the environment, time, and self reliance support-wise (or a decent community).

ahoyhere 15y ago
It was clearly a joke. Laugh a little. :)
- tlots 15y ago
  oh! lal

wavephorm 15y ago

The users have spoken. They want free software products. Open source, piracy, and free websites, together have burned into people's heads that software is worthless regardless of the platform (windows, ios, web, server-side). Unless this mentality changes, expect all software to continue this cycle of froth and recycling.

charlieok 15y ago

I'll put in a good word for a return to the days of actually running an online service yourself, instead of just using remote services. If you are the one running the software, you have control.

blackdivine 15y ago

Loved the article. It was exactly to the point, precise. No more reading first paragraph and ok.. gah... Also the Disclaimer is a pure win "DISCLAIMER: I run a paid bookmarking site. Every morning I wake up and dive into my vault of golden coins."

zdw 15y ago

So, where do I go to pay for Twitter?

diamondhead 15y ago

See the irony: pinboard is a clone of delicious' initial version. it copied the idea, the visual design and started selling it. In every success story of pinboard, I'm very surprised to see how people are impressed from a carbon copy. Let me introduce myself: I'm a guy who bookmarks everyday for 5 years, on delicious. After the Yahoo acquire, it was redesigned. And I was annoyed. I started looking at the alternatives. Most of them were crappy except Pinboard. It was a good copy of old Delicious. And I decided to use it just because it was a good copy of Delicious! Then, I noticed that Pinboard is not free. And what it provides is nothing but keeping some text on a database. Same idea, almost same design but it's not free. Let the owner explain why it's not free: it's unsocial. and it'll be online unless a 90% percent of users keep paying it. It's not ethical, Pinboard. If I think that it's not a waste of time, I'll code some scripts to store bookmarks in Dropbox for your users. It'll be under WTF PL license so that you can sell it.

diamondhead 15y ago

Question: what happens when a guy copies pinboard (in other words, the old delicious) and open sources it? A community evolves. And some of paid pinboard users switch to the free one because it's open source, some people implement some cool stuff periodically, it'll be maintained forever. Another question: What happens when pinboard makes less money? These questions were answered 30 years ago by OSS community.

jarek 15y ago
Sure, the code will be open source. It will still have to be hosted somewhere. Who'll pay the bills? Pinboard's long-term income is primarily from the archiving users. The storage and full-text search index would be even more expensive to host for free.
- diamondhead 15y ago
  I search my bookmarks with grep thanks to a local, plain text copy of them. It's so fast and can be programmed in a way that I can search I bookmarks before I open my browser. There are way better architectures to have an unsocial bookmarking service. Pinboard has the worst one and because its focus is to copy Delicious and make money. In other words, it creates the problem first, and gives users an expensive solution. An open source solution that can kill Pinboard may be based on even DropBox. OSS community is good at solving real problems.
  - jarek 15y ago
    Sounds like Pinboard isn't the solution for you. However, it evidently appeals to many, myself included. I don't think I ever have my browser not open. I use something like four different computers, not including mobile devices, and appreciate the central copy without having to think about syncing it. I don't worry about setting up scripts on my local machine or updating my local plain text copy so that it can be searched. For the archiving users, they don't have to manually save the files of each website they'd like to search later. If you believe you can do bookmarking better and free, then do it. If it matches what I'm using Pinboard for, and is better (and doesn't use Dropbox), I'll switch.

einhverfr 15y ago

There are a bunch of ways of monetizing free use though. I work with Free/Open Source accounting/ERP software and I estimate that less than 1% of our users put money back in our pockets.... But at the same time a lot put money in somebody's pockets, and this grows the community which makes us all more successful and prosperous.

gcr 15y ago

At risk of squabbling over semantics, "Free software", as used in the article, is orthoganal to open-source software. If the source code for these websites were released, even at the end, there would be no issue. Case in point: Etherpad released their source code just before taking their wave dive, starting Piratepad et al.

jarek 15y ago
While you are correct that the article takes some liberties with its use of "free software", having the source code won't help you much with applications that need beefier hosting to truly be useful.

nhangen 15y ago

Finding out that Trunk.ly, which I've grown to love, is shutting down...well it flat out pisses me off. Great post. Thanks for having the courage to state the truth, that most startup founders don't give a about users.

ramblerman 15y ago
> Thanks for having the courage to state the truth, that most startup founders don't give a about users. Is this a public secret. Do you think Steve Jobs was so obsessed with user experience because he cared about you personally?
- nhangen 15y ago
  No, I don't think he cared about me personally, but I believe he knew where his bread was buttered.

r0s 15y ago

I'm all for it, transparent business models! Also, I will no longer tolerate advertizing in my paid content. Seems great, when do we start?

pbreit 15y ago

The reason not as many paid services are acquired is because they don't get enough traction to entice a buyer.

patio11 15y ago

I think geeks have severely irrational expectations as to what they are "owed" by someone just because that someone has created something which they used or enjoyed.

phil 15y ago
If you don't think this is a major problem with web services, you must have either not been around long, or don't use many of them.
- patio11 15y ago
  "We can observe that many online services close" does not imply "People who make online services have a moral obligation not to close."
  - phil 15y ago
    It's not a moral obligation. It's that there are structural reasons why most web services have a short lifespan. That's a problem because it makes it hard to rely on any new service, and that's eroding user trust. At least among people I talk to, there's a lot more skepticism about new stuff than there was a few years ago.
jcr 15y ago
I hate to seem so pessimistic, but it's more than just "geeks," instead, most people suffer from a sense of entitlement.
fauigerzigerk 15y ago
I couldn't disagree more. Startups just going away over night is _the_ major objection I hear from business users (small and large) against using any of these products. Purely consumer oriented entertainment kind of apps may be a different matter, but for anything else consumers are very apprehensive when there is any talk of losing access to an app they rely on. Unlike geeks, they can't just take some CSV dump and move their data elsewhere. For them, the UI is the data. You may be annoyed about the tone in which some geeks complain about free apps going away, but don't let that mislead you into thinking geeks are the issue here. There is a huge issue and it's not opinionated geeks.

j_baker 15y ago

Like a service? Make them charge you or show you ads. If they won't do it, clone them and do it yourself. Soon you'll be the only game in town! "We're just like service x, but we charge you money!" There is no way this business model isn't a good idea.

smashing 15y ago

Can I still use this news.ycombinator site for free or should I stop until I can be charged for its usage?

neuromancer2600 15y ago

Maciej Ceglowski provided more insights into his views about pricing and free services in this podcast interview from January this year (just ff to 24:19): http://5by5.tv/founderstalk/9 http://5by5.tv/founderstalk/9 His major point is that users regard bookmarking sites as a bank where they want their bookmarks safe and secure. I find that a pretty compelling difference. So the statement still holds that if you don't pay for a product, you are the product.

rradu 15y ago

Do people just like paying for things? If a company can find a way to make money off ads and keep the product free, I'll gladly take that over paying a subscription fee.

mcantor 15y ago
I like paying for things. I'd rather pay $5 - $50 for a mobile app than see ads.

gregw100 15y ago

I'm a free user

epaga 15y ago

"DISCLAIMER: I run a paid bookmarking site. Every morning I wake up and dive into my vault of golden coins." Best. Disclaimer. Ever.

orijing 15y ago

The author didn't bring up the point that many of those services became successful (not yet profitable) because they were free. The years when they had no ads and charged nothing are considered loss-leaders in order to build a large network, because their services typically benefit strongly from first order network effects. Google didn't always have such an indisputable business model. Who knew search was so profitable? Would it have been as successful if it started charging users right off the bat, or covering the results pages with (irrelevant) ads before contextual ads were developed?

ssgrfk 15y ago

I Agree. -> http://www.gigatools.com http://www.gigatools.com

Havoc 15y ago

Both paid & free have their place in the world. Not quite sure why the one is being portrayed as evil? I also don't think its the responsibility/right of the user to fix the business model of the company ("Make them charge you or show you ads."). To me the "pump and dump" approach is perfectly legit. Just make sure nobody gets hurt. e.g. Allow customer to export their data. Companies aim to make money, not win a papal election.

Havoc 15y ago
Almost forgot: Dear HN. Please charge me money or show ads. /s

fuckmoney 15y ago

Wikipedia? "Like a service? Make them charge you or show you ads. If they won't do it, clone them and do it yourself. Soon you'll be the only game in town! " If a free website service shuts down you can make your own. Being competitive and ruthless may work financially but it isn't right and unlike a corporation in constant pursuit of profit an owner of a free website is free to act morally and avoid monetary perversion. I'd prefer if websites were a little less stable than if the internet was exclusively for the rich by the rich.

drdaeman 15y ago

While he has a point, I feel somehow offensed^W trolled by such one-sided opinion. Should someone fork HN and make a paid/ad-filled version of it? Doubt so. It's probably because I totally don't get that "oh, their service is so good I want them charge more" mindset.