
$200,000 from Kickstarter = 1 year of runway for Diaspora  - joeybaker
http://dl.dropbox.com/u/345057/DIASPORA%207312011%20Profit%20and%20Loss%20Statement%20B.pdf
======
randomwalker
Wikipedia lists close to 40(!) distributed social networks. [1] None have
achieved a meaningful amount of adoption.

About a year ago I became interested in why this is the case. I'm an academic
computer scientist with a strong interest in the startup/web tech scene (see
profile for info). My colleagues and I have been studying not just
decentralized social networks, but the more general concept of decentralized
architectures for personal data. This includes "personal data store" efforts
which are popping up all over the place, with similarly dismal adoption,
"infomediaries" which were the rage in the late 90s (before the dot com bust
ate them up), etc. Overall, we've looked at around 80 companies, projects, and
proposals.

If the amount of reinvention in this space is surprising, the almost wanton
refusal to learn from others' past mistakes is shocking. These projects seem
to do the same things wrong and fail for very similar reasons, chief among
them building more technology when it's not really technology that's holding
things back.

There is the widespread — but often unstated and always unexamined — belief
among the participants that moving to a decentralized setting is a magic cure-
all for the problems that ail today's status quo, such as privacy and
interoperability. Sadly, this belief is simply wrong.

I certainly sympathize with the urge to pat these guys on the back for trying,
but is it really courage or foolhardiness? If 10,000 amateurs have tried to
solve P =? NP and failed, do we encourage the 10,001th guy to give it a shot
as well, or do we tell him to learn some math and CS first, and gain an
appreciation for why the problem is hard and probably not worth taking on
unless you really really know what you're doing?

[Our study is not out yet, but feel free to contact me if you're interested in
discussing this.]

[1] <http://en.wikipedia.org/wiki/Distributed_social_network>

~~~
neilk
I have a bet with random_walker that a distributed social network will gain
significant traction by 2014.

<http://twitter.com/#!/flipzagging/status/16766878672228352>

Diaspora is a sad story: a team with great intentions but little systems
experience, becoming the standard-bearer for distributed social networking.
They gained attention from some random factors (frustration with Facebook at a
peak, NYtimes story, Kickstarter).

I think the odds of there being a single winner-take-all provider of social
networking services (SNS), forever and ever, are slight. The idea that kids
are going to stick with the SNS their mom uses to play Farmville seems
ridiculous to me. So we should see some amount of fragmentation, eventually.

It also seems absurd to me that Facebook will remain agile enough to shut out
competitors while also supporting 500M+ users. At some point, a situation
should arise where competitor SNS services will find it to their advantage to
be interoperable. That could end in an oligopoly, but that still counts as a
more distributed social network.

Larry Page often likes to say "don't bet against the internet". And I am old
enough to remember when people thought that Microsoft's Project Blackbird was
going to kill the web. I am confident that SNS, like almost all internet
services, will be commodified at some point, and probably sooner than we
expect.

Caveat: this hasn't quite worked out for instant messaging, so I could be
wrong.

~~~
nl
I'd bet against you, but I don't think your definition of "gain significant
traction" is reasonable.

It's pretty _easy_ for a network to get 1 million sign-ups, and then it's
pretty easy to get 1 million people to pipe their Twitter status's into it.
See Identica etc.

That doesn't mean is has significant adoption as a social network - it's
really just a Twitter client.

I agree that there will be many social networks, but I don't think there is
much reason for them to interoperate.

Take a listen to Eric Ries talk about his experience building an interoperable
IM client[1].

He built the whole thing, then showed it to heavy IM users and they were
(paraphrasing) "err.. why would I want that? I already run 6 IM clients,
running another isn't a problem. And I don't want the same people to see me on
each one"

We already have an interoperable, distributed social network for messaging
purposes. It's called email. I doubt another one is needed. (OTOH, I did build
a Pubsubhub powered demo of one back in the FriendFeed days. The technology
was cool...)

[1] <http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2273>

~~~
waitwhat
Trillian <http://www.trillian.im/> have been selling their cross-platform and
interoperable IM client for over a decade.

If people didn't want Eric's interoperable IM client, it wasn't for lack of a
market.

~~~
wmf
Trillian is either a good or bad example, depending on your perspective. I
don't want to have N IM accounts; I want to have one account/identity that can
reach everyone. That has not happened with IM and I am skeptical that it will
happen with social networking.

------
acangiano
My initial reaction was to feel bad about these kids. Then I remembered about
Theodore Roosevelt's speech about the man in the arena, and I congratulate
them for giving it their best shot. Whether they continue or not, it was worth
trying and they've had an amazing experience in the process.

"It is not the critic who counts; not the man who points out how the strong
man stumbles, or where the doer of deeds could have done them better. The
credit belongs to the man who is actually in the arena, whose face is marred
by dust and sweat and blood; who strives valiantly; who errs, who comes short
again and again, because there is no effort without error and shortcoming; but
who does actually strive to do the deeds; who knows great enthusiasms, the
great devotions; who spends himself in a worthy cause; who at the best knows
in the end the triumph of high achievement, and who at the worst, if he fails,
at least fails while daring greatly, so that his place shall never be with
those cold and timid souls who neither know victory nor defeat."

~~~
roel_v
Frankly, I think you're stretching the applicability of this speech (which by
itself is one of the greatest ones ever) by lumping the Diaspora guys in
there.

Look at it this way: should the guy who sells his house and jeopardizes his
family's future to buy a plot of land in Alaska to mine it for gold with a
pick axe and a sieve be lauded as 'the hero in the arena'? Or is he just an
idiot with poor judgement?

~~~
eavc
I get your point, but I think that's actually well within the scope of the
quote. Someone tried to do something and failed, while onlookers point out why
it was a bad idea to even try.

The quote isn't meant to absolve those who try of responsibility or even to
nullify criticism; it's meant to help counter-balance the steady stream of
nay-saying one is subjected to when trying just about anything with any
visibility at all.

------
tptacek
Nothing _too_ crazy in here.

Surprised by:

* The 25k in what appears to be merch. Inclination: that's silly. Is this some crazy Kickstarter thing someone can explain?

* The ~8k in fees to LUXr, a "1 day a week for 10 weeks design residency for early-state startups". "Radically cheap", eh.

* The 1k trademark filing fee.

* That they actually spent $6k in a year at Rackspace. How many uses did they have? And ~$100/mo at Sendgrid?

On the other hand, these people paid themselves less than 1/3rd market salary,
even after you account for the housing allowance.

And what do I know? I've never tried to start a social network (there's a
reason for that, but...). Maybe 25k in merch is what it takes.

~~~
Timothee
As far as the $25k for merch go, I believe that they had to spend quite a lot
to fulfill their Kickstarter promises. Somebody had made the calculation that
it would end up being fairly significant.

~~~
ugh
T-shirts for 3.5k people. Stickers and CDs for 4.5k people.

I’m estimating $15k for the T-Shirts, $1.5k for the stickers and $3.5k for the
CDs. Maybe I underestimated one or several of those. $26k certainly doesn’t
seem unrealistic for the merch and they had to ship it. It was part of the
deal.

That’s actually one of negative things about Kickstarter: It can’t be good
that someone who should and most certainly is busy pushing out a product
suddenly also has to be this expert in getting merch made and shipping it to
people.

I would assume becoming that expert is not easy and being good at dealing with
merch doesn’t seem like a valuable skill the rest of the time – you know, when
you are busy building a social network or doing whatever.

All this merch crap sadly seems to have become a staple of Kickstarter
projects. Maybe it’s necessary to get people to pay?

~~~
shabble
Sounds like an easy value-add for them or someone else to provide
design/manufacture/drop-shipping for all the merch if you give them your logos
and brief, or whatever.

They save on effort, and you take a few percent yourself. Scale means you can
make better arrangements with suppliers, and quite possibly everyone comes out
ahead.

Edit: to address the "is it even necessary?" question, I'd personally guess at
'yes'. Having some sort of tangible reward for your contribution, even if it's
just a sticker, helps people justify the cost. Then they can wear your hat or
t-shirt and get maximum indie "I funded them even _before_ they were
underground" credit. Also, free(ish) advertising for you.

------
inkaudio
Although I agreed with most of Jason Fried thoughts on dispora, I thought the
jury was still out. It turns out his prediction was right.

 _...That’s an impressive start if victory was measured in press coverage,
cash, and cool. Here’s the problem: Diaspora has all the wrong things at the
wrong time. Competition that kills isn’t pre-announced — it catches an
unsuspecting incumbent by surprise.... love the underdog, but I fear for the
product-less underdog that has all the wrong things at the wrong time._

<http://37signals.com/svn/posts/2330-diasporas-curse>

------
noarchy
I've noticed a sudden, sharp rise in Diaspora's outreach efforts in recent
days, ranging from activity on Facebook, to direct emails. It looks like
they're trying to get things moving again, from a PR perspective.

Unfortunately, they've probably squandered a lot of that initial publicity.
They had a lot of doubters from the very beginning, and now that the project
has dragged on this long, I'm sure that many are dismissing the entire thing
as vapourware.

~~~
eavc
>Unfortunately, they've probably squandered a lot of that initial publicity.

You know, I'm not sure if they have. People wanted to believe in this to the
tune of $200k. Even two years from now, if they have arrived at something
truly viable, it will be trivially easy to spin the PR wheel again. At this
point, their main obstacle is demonstrating competency on the relevant
technical problems and processes. If they learn to crack that nut over the
course of, say, another year, then they'll be the come-back kid -- every bit
as appealing an angle as their initial appeal as improbable underdogs with
starry eyes.

------
alexro
So, with no money left and no business model in sight and (most important) no
enthusiasm about Facebook killer and with G+ in the wild, is that the end of
Diaspora?

~~~
heynk
Apparently Zuckerberg donated to Diaspora, so they must not be quite out of
money yet.

<http://www.wired.com/epicenter/2010/05/zuckerberg-interview/>

~~~
wavephorm
I assume his donation is included in the kickstarter fund.

------
citricsquid
is it a coincidence that this coincides with their announcement about
continuing the project? I got an email an hour ago,
<http://pastie.org/private/5xrgn6cmuyrylbwngvv5a>

on the topic of that email, taking credit for changing things? ha ha ha.

------
byoung2
Now, what would they have done had they only gotten the $10,000 they asked
for?

~~~
lallysingh
Probably go around & ask for funding. The $10k is a reasonable display of
consumer interest.

~~~
byoung2
That brings up an interesting hypothetical. In an alternate universe, maybe
the Diaspora founders applied to YC and got $20,000 (4 founders), which is
double what they asked for on Diaspora. With 3 months, seed money, a lot of
mentorship and advice about solving a problem and finding a market, and
exposure to other startups going through the same process, where would they be
now?

~~~
lallysingh
Probably better off. The thing is, it's a lot easier to set up a Kickstarter
post than apply to YC -- at least, imho, in emotional risk.

~~~
jonnathanson
_"... it's a lot easier to set up a Kickstarter post than apply to YC..."_

Perhaps. But let's not shortchange what an achievement having a blockbuster
Kickstarter round really is. To get to $200,000 on Kickstarter, you have to
work for it. You have to promote the hell out of yourself. You have to
guerilla-market like a pro. The most successful Kickstarter projects -- the
ones with the giant rounds of funding, well beyond their own targets -- have
been the ones who got out there and drummed up interest, then brought the
interest back _to_ Kickstarter. (In contrast to the folks who simply sat back
and expected interest to generate _on_ Kickstarter).

It is a total myth that you can "set it and forget it" on Kickstarter, and
that having a cool premise will rake in the donations on its own accord. It
takes legitimate hustle.

~~~
lallysingh
I don't think we disagree. The partial failure mode of Kickstarter, say $5800
of the $10k you wanted; which is easier to accept than a flat "no" from YC.

Let's remember that these are pretty young kids. It's pretty easy to be
intimidated.

~~~
jonnathanson
_"The partial failure mode of Kickstarter, say $5800 of the $10k you wanted;
which is easier to accept than a flat "no" from YC."_

True, although we should keep in mind that partial failure on Kickstarter =
total failure. You don't receive any money from the round if you don't meet
your target. If I set $10,000 as my bar, and I raise anything south of $10,000
(even $9,999), I don't see a penny.

I agree with you that this is probably not as emotionally devastating as being
told "no" by some of the preeminent experts in the field of startups. (And I
agree with you by and large, btw; I'm just spelling this out for others
reading the thread who might not know how KS works).

------
brackin
I'm not worried for them. If they're entrepreneurs they'll either work hard
and make it work, pivot or if they want they'll get hired by someone.

I think they should forget about fighting Facebook and be the Wordpress of
Social Networking. Ning was trying to the Wordpress.com of the space.

They could then offer the ability to create social networks like Ning did with
premium features. But look at where Ning went wrong and iterate.

------
marcamillion
I love the nerdiness of their salaries:

>Salaries (Four FTE @ $28.8k annually)

That's pretty awesome. Never thought about expressing it like that.

~~~
emiranda
What is FTE?

~~~
Luyt
Either 'Full Time Equivalent' or 'Full Time Employee'.

See <http://en.wikipedia.org/wiki/Full-time_equivalent> and/or
<http://en.wikipedia.org/wiki/Full-time>

~~~
marcamillion
I believe Full Time Equivalent, but I was referring to the modem rating (i.e.
14.4k, 28.8k, 36.6k, 56k, etc.).

------
malbs
Just goes to show how much pushing a real idea out the door can actually cost
- there are plenty of people out there burning this kind of cash and going
broke, and never even getting the sort of media coverage these guys got.

edit: and I'm not saying they should have/could have done any better with the
money they received. I donated to their kickstarter, and I don't feel like it
was wasted.

------
rationalbeats
Serious question

Are there any people who code on this website that would work for under
$30,000 a year?

~~~
benologist
They're founders, and I bet there are no shortage of founders around here
who've worked for under $30k on their startups.

------
motters
The one thing which struck me is how expensive a year's worth of cloud hosting
is. No wonder there has been such a kerfuffle about "the cloud". The other
costs - including rewards - are pretty much to be expected.

From my perspective decentralized social network systems seem to be
succeeding, with people running them upgrading their servers to cope with the
influx of Facebook and G+ exiles. However, I think that Diaspora made a few
mistakes which meant that they didn't get as far as they could have in the
first year. One was poor communication about what they were doing and their
state of progress. Another was a poor initial choice of software which made it
hard to install.

------
rhygar
The Duke Nukem Forever of social networks?

~~~
ElliotH
Closer to the Hurd of social networks I'd say.

~~~
damncabbage
Only if Hurd had giant security holes.

~~~
uriel
It probably does, but doubt anyone has bothered to check.

------
kennywinker
Super interesting. The take-home of this seems to me to be that the most
expensive part is paying yourself. 100k for salaries for four people is the
bulk of the expenses.

------
BrettRad
Luxr Training?? Really? 28k on rewards/fulfillment??!

$6.4k Rackspace cloud hosting and there isn't even an alpha version out- WTF!

Come on -you've got to get creative and work deals. Bootstrap!!

~~~
beatpanda
There _is_ an alpha version out, and lots of people are using it.

~~~
zalew
are there any girls?

------
dendory
Am I the only one that laughed at tge $26k spent on t-shirts and stickers?

~~~
xentronium
It was part of their kickstart deal.

------
Dipen
strange that Pivotal labs help to diaspora [1] doesn't figure in this PL
statement. Was it all free?

[1] <http://blog.joindiaspora.com/2010/07/01/one-month-in.html>

~~~
inmygarage
I believe it was just free desks at Pivotal SF, and the advice that comes
along with sitting next to really smart people. My guess is that yeah it was
likely free.

------
Birejji
I could have done a lot better with that $200k :(

~~~
mey
Don't armchair, go do. Start a project, get funded/self fund, and prove you
can do better.

~~~
Birejji
I've started lots of projects... no one wants to fund and I'm a college
student without funds to self-fund

~~~
robryan
These guys were in the same position...

