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Kind of a condescending article. Really, Instagram pulled an enormous bait-and-switch. Create a great application, give it away for free until you've built up a

by kyllo 14y ago

Kind of a condescending article. Really, Instagram pulled an enormous bait-and-switch. Create a great application, give it away for free until you've built up a huge base of users, then sell the application and its user base to another company and let them figure out how to actually make money off it. Understandably users are going to be upset because they're being asked to either pay for or see ads with something that they used to get for free and ad-free. People will always be upset when you take something away, even if you gave it to them for free.

purplelobster 14y ago
Users don't really have any right to be upset over not being able to use services completely for free. Is this what the world has come to? Start-ups make their service free initially until they've gotten enough users, then try to monetize and then the users hop on to the next free service. And repeat. Either user expectations have to change, or start-ups will have to realize that they need to start monetize right away.
- dasil003 14y ago
  Since seed investments continue at a breakneck pace, and since instagram sold at many multiples of any revenue stream their existing service could have provided, I don't see much chance of startups realizing they have to change. Likewise, user complaints are a tempest in a teapot. Does it matter to anyone how angry you are about the downward spiral of your favorite service? I actually think people enjoy their righteous indignation and are nowhere near being mad enough to consider not using the next cool free service.
  - kyllo 14y ago
    Startups don't have to realize that they need to start monetizing right away. Companies that buy startups need to realize that if they buy a startup that has only free users who aren't looking at ads, they might not be buying what they think they're buying. Because those millions of users have all been trained to expect to enjoy the service for free. So when you buy a company for its user base, you need to consider that free users are not worth what paying/ad-viewing users are worth, and if you try to charge or show them ads without creating more value for them in return, many of them might leave. If companies that buy startups realize this, then the startups themselves will start monetizing right away, because it will be the only way to get acquired.
    - dasil003 14y ago
      I think Facebook knew exactly what they were buying: a hedge against disruption by the strongest startup in the fastest growing area of relevance to Facebook, mobile photos. I also don't think Facebook gives a shit about a lot of hand-wringing hipsters. They've been creating bad press with their decisions for years, I hardly think this little impotent uprising will ruffle their feathers.
      - kyllo 14y ago
        Yes, it's also a strong possibility that Facebook didn't buy Instagram for its users, but bought Instagram simply because they didn't want to compete against Instagram.
- rogerchucker 14y ago
  I'll repeat. "If you start free, stay free. If you start with $$$, then try to go to $$. That's just the way it will always work." Try not to get too philosophical about it. User expectations are set and managed by the service providers. If the user has a certain expectation, it is the provider's fault (in this case Instagram).
  - kyllo 14y ago
    Exactly, it's all about managing expectations. You can't blame users in the aggregate for being upset when you set their expectations very high and then try to bring them down. Actually, to blame an aggregate group of people (especially your own customers) for anything is folly. Chances are it's not them, it's you.
goatforce5 14y ago
How's it a bait and switch? Should free things be provided to you forever? If something is being given to you for free, shouldn't you realize that at some point money has to enter the equation? “If you are not paying for it, you’re not the customer; you’re the product being sold.”
- devcpp 14y ago
  I think it's more about how they sold the company while the application was still not making any money. People expected to have to pay one day, of course, but by selling the users without the business model, Instagram showed it didn't care about the users. Letting another company figure out how to make money with your product does sound odd, particularly when the product is the users and not some kind of resource.
- FuzzyDunlop 14y ago
  Everyone trots out that line in a cargo-cultish manner. Thing is, you're still 'the product being sold' once you become a paying customer.
  - shoopy 14y ago
    Not for startups! They're special.
- kyllo 14y ago
  Oh I am very much aware of this fact. But another fact is that if you give someone something for free for a while and then you start to charge for it (or add ads to it) they are going to be upset, regardless of whether they "should" be upset. No one is happy about the experience of having value subtracted.
  - hnriot 14y ago
    But this is still not bait and switch. You can use of the myriad if other apps, like Flickr which stores the images at a decent resolution (instead if the 612x612)
- 14y ago
ceejayoz 14y ago
This isn't so much bait-and-switch as it is a car dealership forgetting to put a price tag on a car and people getting mad that it isn't free to buy.
- _delirium 14y ago
  They didn't exactly forget, though: they actually went out of their way to paint a huge sign reading something like, "GREAT NEW CAR ... GET IT TODAY ... TOTALLY FREE ... COMPATIBLE WITH ALL GARAGES!" Of course, they didn't promise the car wouldn't play ad jingles through the stereo system, either.
nwh 14y ago
I suspect if you asked a lot of users what they thought about Instagram's income, they wouldn't have a clue what you're talking about. I'm not sure that a lot of people even realise why they pay for mobile applications (they paid for the phone so why are they paying more now?), and just attribute it to corporate greed. I asked the question of some of my peers recently, and their justification was that Instagram didn't new income, as it was providing fun. I'll leave you to figure out how that works.

by kyllo 14y ago

purplelobster 14y ago

Users don't really have any right to be upset over not being able to use services completely for free. Is this what the world has come to? Start-ups make their service free initially until they've gotten enough users, then try to monetize and then the users hop on to the next free service. And repeat. Either user expectations have to change, or start-ups will have to realize that they need to start monetize right away.

dasil003 14y ago
Since seed investments continue at a breakneck pace, and since instagram sold at many multiples of any revenue stream their existing service could have provided, I don't see much chance of startups realizing they have to change. Likewise, user complaints are a tempest in a teapot. Does it matter to anyone how angry you are about the downward spiral of your favorite service? I actually think people enjoy their righteous indignation and are nowhere near being mad enough to consider not using the next cool free service.
- kyllo 14y ago
  Startups don't have to realize that they need to start monetizing right away. Companies that buy startups need to realize that if they buy a startup that has only free users who aren't looking at ads, they might not be buying what they think they're buying. Because those millions of users have all been trained to expect to enjoy the service for free. So when you buy a company for its user base, you need to consider that free users are not worth what paying/ad-viewing users are worth, and if you try to charge or show them ads without creating more value for them in return, many of them might leave. If companies that buy startups realize this, then the startups themselves will start monetizing right away, because it will be the only way to get acquired.
  - dasil003 14y ago
    I think Facebook knew exactly what they were buying: a hedge against disruption by the strongest startup in the fastest growing area of relevance to Facebook, mobile photos. I also don't think Facebook gives a shit about a lot of hand-wringing hipsters. They've been creating bad press with their decisions for years, I hardly think this little impotent uprising will ruffle their feathers.
    - kyllo 14y ago
      Yes, it's also a strong possibility that Facebook didn't buy Instagram for its users, but bought Instagram simply because they didn't want to compete against Instagram.
rogerchucker 14y ago
I'll repeat. "If you start free, stay free. If you start with $$$, then try to go to $$. That's just the way it will always work." Try not to get too philosophical about it. User expectations are set and managed by the service providers. If the user has a certain expectation, it is the provider's fault (in this case Instagram).
- kyllo 14y ago
  Exactly, it's all about managing expectations. You can't blame users in the aggregate for being upset when you set their expectations very high and then try to bring them down. Actually, to blame an aggregate group of people (especially your own customers) for anything is folly. Chances are it's not them, it's you.

goatforce5 14y ago

How's it a bait and switch? Should free things be provided to you forever? If something is being given to you for free, shouldn't you realize that at some point money has to enter the equation? “If you are not paying for it, you’re not the customer; you’re the product being sold.”

devcpp 14y ago
I think it's more about how they sold the company while the application was still not making any money. People expected to have to pay one day, of course, but by selling the users without the business model, Instagram showed it didn't care about the users. Letting another company figure out how to make money with your product does sound odd, particularly when the product is the users and not some kind of resource.
FuzzyDunlop 14y ago
Everyone trots out that line in a cargo-cultish manner. Thing is, you're still 'the product being sold' once you become a paying customer.
- shoopy 14y ago
  Not for startups! They're special.
kyllo 14y ago
Oh I am very much aware of this fact. But another fact is that if you give someone something for free for a while and then you start to charge for it (or add ads to it) they are going to be upset, regardless of whether they "should" be upset. No one is happy about the experience of having value subtracted.
- hnriot 14y ago
  But this is still not bait and switch. You can use of the myriad if other apps, like Flickr which stores the images at a decent resolution (instead if the 612x612)
14y ago

ceejayoz 14y ago

This isn't so much bait-and-switch as it is a car dealership forgetting to put a price tag on a car and people getting mad that it isn't free to buy.

_delirium 14y ago
They didn't exactly forget, though: they actually went out of their way to paint a huge sign reading something like, "GREAT NEW CAR ... GET IT TODAY ... TOTALLY FREE ... COMPATIBLE WITH ALL GARAGES!" Of course, they didn't promise the car wouldn't play ad jingles through the stereo system, either.

nwh 14y ago

I suspect if you asked a lot of users what they thought about Instagram's income, they wouldn't have a clue what you're talking about. I'm not sure that a lot of people even realise why they pay for mobile applications (they paid for the phone so why are they paying more now?), and just attribute it to corporate greed. I asked the question of some of my peers recently, and their justification was that Instagram didn't new income, as it was providing fun. I'll leave you to figure out how that works.