
Fred Wilson is wrong about “Free” - sachitgupta
http://daltoncaldwell.com/fred-wilson-is-wrong-about-free
======
sachitgupta
Fred Wilson replied on Twitter:

    
    
      great post dalton. i wish your blog had comments because   
      i'd like to publicly agree with much of it and state where 
      i don't. [1]
    
      the one thing i most want to say is i never intended to 
      refute your points/positions. i just wanted to state mine. [2]
    

[1] <https://twitter.com/fredwilson/status/226027510201204736>

[2] <https://twitter.com/fredwilson/status/226028140584128513>

------
johnthedebs
Some criticism of the App.net project, which I hope is constructive:

It took a bit of reading between the lines, but from what I understand Dalton
is trying to build a paid version of Twitter which is beholden to users and
developers rather than advertisers. He refers to it as a "realtime feed
platform" and is asking for $50/member/year (or more for the Developer and Pro
tiers).

If that's the case, the first big question is: Would I pay $50/year for
Twitter? It's hard to say for sure, but I'm not sure I would. This makes
committing $50 to something that may not work out difficult – I need to be
convinced of the value of this project.

The second big question is: Would everyone else pay $50/year for Twitter?
Given that Twitter is only useful because of the network of people on there,
if they don't come along then my $50/year is for naught even if this project
does get funded. I need to be convinced that the value of the network will be
there and I just don't see how that's going to happen.

The last piece of criticism is at the messaging. It's been rubbing me the
wrong way and I'm not sure exactly why; I feel like when I read about it I'm
being told how much I should care, but I haven't been convinced yet that I
should care that much. More specifically:

"audacious proposal" - It won't happen unless the support is there, so what's
so crazy about it?

"service we all wish existed" - I hadn't really been wishing for this, even
though the steps Twitter has taken recently have been a bit disconcerting.

"I'm putting my money where my mouth is" - _Your_ money? That's _our_ money!
Again, it only happens if it gets funded.

The funding doesn't seem to be moving along too quickly, so I can only assume
other people have reservations about the idea, or haven't been convinced of
the value. I'd be interested in knowing whether other people agree with the
reasons I laid out.

~~~
pedalpete
I think you can re-phrase your question of "Would I pay $50/year for Twitter"
as "Would I pay $50/year for something like Twitter, when Twitter is already
free".

App.net needs to be considered in the overall market, not as a stand-alone.
It's biggest threat (I don't think) is the $50, it's going up agains a free
established major brand in a network play. Has this ever been done before?

------
danielpal
I didn't see your refutal of why is he wrong. He argues that when scale and
network effects matter, free services supported by ad's win.

How's is he wrong about that? Your article seems to focus on service quality
(specifically to developers). You keep saying that you could provide a
"better" service if you are not ad supported. Perhaps you can and I assume
Spotify/Pandora paid service is better than their free service, but they don't
have the network effect problem.

What I have not yet seen you explain is: How do you plan to get millions of
users putting a big paywall between the user's and the service?

~~~
dalton
Me: "Free Platform services are bad for a bunch of widely-understood reasons.
I am going to try something crazy to propose a solution. There are a few
examples of healthy platforms and I think we can learn from them. This
approach may not work but I want to try."

Fred: "Non-free services, both platform and non-platform don't work. Nothing
to see here, please move along."

Me: "Um ok, this may not work, but you didn't address my points about why ad-
supported platforms are a fundamental risk to developers and bad for
innovation. This is my core argument and you seem to be glossing over it. Are
you saying we are stuck with things the way they are?"

Fred: "Good post. I agree with a lot of this, but not all"

~~~
inkaudio
Your paraphrasing is wrong, because he did not say Non-free services both
platform and non-platform do not work. Fred was specifically referring to
potential paid competitors to twitter, facebook and similar services.

to illustrate:

Fred: "Free TV does not commoditize paid TV. They co-exist nicely. But we had
free TV well before we had paid TV. Free is the foundation that creates a paid
tier. "

followed by, Fred: "I would encourage folks to compete with them to keep the
web, the mobile web, and the Internet free and open. But I would not encourage
those same folks to build paid services."

So Fred was not speaking against all non free services.

Developing for any platform that is not your own presents risks. Just because
a developer is paying for app.net does not mean anything goes on app.net.
Moreover I would not assume it's bad for innovation. Both Twitter and Facebook
know they cannot alienate the majority of their users, they will innovate on
their platform as needed. They also know they need to strike a balance when
providing services for both their advertisers and users.

------
nava
I think comparing Dalton project to twitter is wrong. It's wrong because the
whole point of it is that there is huge potential for something else,
something more. I think Dalton's vision of what the project could be is blurry
and I think thats a good thing.

So does Paul Graham - "The popular image of the visionary is someone with a
clear view of the future, but empirically it may be better to have a blurry
one."

I donated because I want to see him try and would like to see something new
(not twitter) come out of this. I think people lack imagination (myself
included) and thats why they keep saying it's a twitter clone that is paid.
I'm really glad he has enough courage to try. Thank you, Dalton.

------
kelleyk
It seemed like an aside, but the issue of being at the mercy of the people who
provide platforms and other foundational technology really resonates with me.

("Building on top of a platform is a foundational risk, and if your platform
decided one day that it doesn’t like what you are doing, or likes what you are
doing so much they want to compete with you, it’s Very Bad. Your platform
partner can easily damage your quality of service, or simply shut you down. If
that happens, your business is dead.")

Have I missed an explanation from Dalton or the App.net crew about how what
they're envisioning will be different? What protects a developer from being at
their mercy for uptime, timely bugfixes, continued development, and so on?

Actually, on a more general level... what _can_ platform/tech providers do to
provide those reassurances? I can't seem to think of anyone who's done a
really stellar job of it.

~~~
dalton
In my announcement of this project, I argued that Github & Dropbox are the
best examples I can come up with as examples of healthy, innovating platform
companies.

I believe our approach is different in that App.net customers are
developers+members paying for a service that is provided. This is different
than customers being advertisers, and developers+users being treated as a
product, or at worst collateral damage.

I think this all boils down to business model choices and financial
incentives: <http://daltoncaldwell.com/an-audacious-proposal>

~~~
danielpal
Both Github and Dropbox offer a free plan plus they don't need the network
effect. If I were the only user on Dropbox I would still find it valuable.
Same on github.

However the service you are proposing does have a huge network effect.
Twitter/e-mail without users is not valuable.

So whats your plan to get to a million paid users?

NOTE: Pandora had about 71 Million on October 2010 but only about 700,000
paying users. So not even Pandora has been able to get to 1 million paying
customers. Just look at the financials. 14% of revenue came from paid users
and 84.6% came from ad's. Which supports Fred Wilson point that the majority
prefers ad supported services.

I am going to support App.net. I still want to see you try. But I am afraid
you don't really have a good answer on how you plan to build the network and
Fred Wilson is trying to warn because you will probably fail. But something
tells me you don't care if you fail, thats why I'll support you.

------
j45
Wouldn't any investor be inclined to promote the qualities (Freemium, or not,
etc) they best know and prefer to invest in?

To me, VC/Accelerators specialize in different things based on their expertise
and their goals, and look for a match.

It doesn't make the opposite wrong. Or anyone right. It's just not in their
area of investment.

By engaging this debate, are we inadvertently agreeing investors fund base
decisions on one formula or model and nothing else?

These types of posts may, or may not try to influence smart startupheads to
lean their way. But somehow the door opens for a religious debate - but the
only thing black or white from where I can see is each investor's preference,
and not spending time on something customers want.

~~~
fredwilson
exactly <https://twitter.com/fredwilson/status/226047103867170816>

------
zemaj
I think it's a great idea that will fail in this implementation.

The first barrier in social networks is people - getting enough people on your
network to incentivize others to follow. Is the fact that app.net paid enough
to draw people away from Twitter & Facebook? As a developer, perhaps, but as a
user, I really doubt it.

A much better sales pitch would be just "you own your data". Give users
amazing import/export tools from the get go. Allow third parties to fork your
system and allow seamless user migration. Build a protocol, not a service.

With a business hat on, I also worry about the single silo of data in app.net.
Say it does become successful, then they're a monopoly again. How can we be
sure they'll fairly charge for their API usage when they realise how much it
costs to hosts that much real time data? Can we be sure they won't change the
playing field again?

Besides all that, I don't get why he wants $500,000 up front. If he wants to
"align our financial incentives with members & developers", I would have
thought he'd charge a set fee to allow revenue to scale with usage.

Also the language on the site is just so damn confusing. They have lots of
ideas jammed in together. Most of the discussion about the idea has been
people trying to figure out what they're on about. They need to figure out a
sales pitch people can understand and stick to it.

Anyway, lots of huge holes in this implementation IMO. I doubt it'll even get
funded.

------
larrys
"Fred Wilson is one the smartest, most genuine people in the tech business. He
has a huge fan club that he has earned by being radically transparent and
consistently engaging in public debate. I have emailed with him a few times
over the years, and actually met him and shook his hand a few weeks ago. I
think Fred Wilson is awesome, and if I saw him on the street today I would
walk up and shake his hand again."

Amazing bit of novacaine you applied there. This won't hurt a bit...

------
pbreit
It's seems like Dalton's proposal would need to be some sort of protocol like
Git, SMTP or Usenet. I don't see how a paid Twitter could possibly do what he
describes.

------
brackin
I still think that there is no incentive for developers to switch. This
situation has a parallel to the Windows Phone app development grants.

Microsoft is paying startups to hire someone to develop a Windows Phone app.
After speaking to these companies they say they highly doubt they'll get any
value from it and don't intend to continue developing for the platform.

You're offering developers an open platform to develop on that at the moment
has under 1000 users. I think a developer could still make more money on a
huge locked down platform like Twitter than on 'join.app.net'?

Even if a developer eventually gets kicked off, I'm sure they earned a lot
more in the time they were live than on a small platform.

I think $50 yearly is too high for early adopters and even higher for the
developers you need, I love the Pinboard.in model, they offer a one off price
that is set based on the number of users. So the earlier you join the lower
the price. Right now it's $9.84.

~~~
millan
You made some good points, mainly that most developers will/already are taking
the risk of being kicked out of the Twitter/Facebook/Etc. platform because
that platform already has users.

The way I see it, you as a developer are using what they
(Twitter/Facebook/Etc.) built to market your app to their customers that
they've spent the time to acquire, it's only fair that they can kick you out
of their house whenever they want; that's the way a free market should work,
fair or not.

At this point, it sounds like App.net will turn out to be a high-quality
network of developers and hackers building interesting stuff, but with no real
market or audience. Developers don't build for developers.

Your second point was that $50/year is too much for early adopters:

I agree with you, but to even call anyone who's pledged the $50 'early
adopters' is ridiculous at this point. No one even knows what App.net is going
to be yet or what it could be, and it's a long ways off being released for
early beta testing. What Dalton needs to be doing at this stage is just get
people to sign up, for free. From there he can figure out if he'll have enough
people to go ahead with it or not.

It's not worth throwing $50 at. Yet.

------
chmike
My impression on app.net, which seams to be a payed "twitter" if I understood
correctly, is that it should provided an added value worth $50 in the eyes of
customers.

Publishers would very likely find this value is such service, but I doubt for
readers. Twitter is already a time sink, so adding a cost to it doesn't make
it attractive.

Beside, how much different would be paying publishers from advertisers ? They
will/should make sure they get their $50 back someway.

Regarding the funding process, it shouldn't be considered as an idea
validation process. Outcome depends on how well the idea or project was
presented AND people's preconception on what has been presented.

------
yonasb
Pocket hasn't revealed their plans for monetization moving forward, but this
post does a great job of explaining free vs paid, and why free is sometimes
necessary: [http://blog.ideashower.com/post/21276590202/why-pocket-
went-...](http://blog.ideashower.com/post/21276590202/why-pocket-went-free)

------
simondlr
I have been following this on and off. Is there anywhere where it's been
mentioned what the underlying network will look like? Is it actually a
Twitter-like social site?

~~~
dalton
We are posting API docs to github later today, tmrw am at the latest. I'm too
busy trying to wrap that up to keep engaging in hn threads, so if I don't
reply to other questions thats why :)

~~~
antidaily
Ok, but I just have one three-part question...

------
calinet6
> On “being a bitch”

> I tweeted:

> I wanted to remind people that Fred Wilson made the following statements:

> He also said:

> At any rate, Fred replied to my tweet:

Yep, that's how you do it alright.

------
thiagodotfm
Dalton is obviously just using Fred Wilson's name to market his app.net
bullshit.

Protip to Dalton: Nobody cares about twitter ads as you do, it will never take
off. After you fail for the 1383th time, please quit.

~~~
larrys
"Dalton is obviously just using Fred Wilson's name to market his app.net
bullshit."

I think Dalton has valid points.

That of course is totally separate from whether he gets benefit from
mentioning FW.

He does. A smart move. Got me to read the post.

That said I'm not entirely sure after watching the video (btw Dalton it
bothered me that you didn't look at the camera..) and scanning the site what
is going on here. Maybe it's just that time of day.

------
sscheper
HN Feature Request: Filter out Dalton Caldwell/app.net posts.

Upvote if in favor.

~~~
sp332
Install this: <http://www.hackerne.ws/item?id=4197062>

