It's really unfortunate that they won't even try the freemium, or (shock!) even the outright pay to play approach. I'm sure with two million users there would have been enough paying customers to create a profitable business.
How the fuck do they think this whole cash flow thing works?
2 million users, and they don't even put out a god damn paypal donation widget? Show ads? Freemium anything? Charge something outrageous, lose 90% of your 2 million users, and you'll still have a significant monthly income.
This is just the stupidest news I've heard in a while. Zero respect for these guys, they clearly don't have even a shred of business sense.
Things are probably not that simple. They have investors. It may not be a case of "Hey, we can make a business that pays for three guys to eat." Perhaps their investors need to see a certain minimum return or else the investors would rather close up shop.
Maybe they have a better buysiness idea and it's better to close this one and put 100% of their energy into the new idea. Have you heard of justin.tv? IIRC, a large number of people on reddit were criticizing Justin and his partners for selling their previous startup on eBay. They got some money and started again with a blank piece of paper.
I am not saying that you're wrong about what to do given the information you have. I am saying that (1) It is difficult to be absolutely certain that they are making the worst possible business decision in this case given how little we know, and (2) Even if they are making the worst possible business decision, how does this extend to having zero respect for the complete human beings who laugh, love, play, and built something many people value?
p.s. The company is for sale. If you have an opinion of how it ought to be run, there's no better way to make your case than to buy it for a fire sale price and run it. In all honesty, I would be absolutely delighted if you were to make a go of it. That would be a very inspiring story.
If you spend years, and millions of dollars, and don't make _any_ attempt to bring _any_ money in the door, I think you are making a mockery of the entire startup culture.
It's a business. What part of that do they not get?
Maybe maybe maybe, maybe they could try being a business and not seriously expect that some magical revenue stream is going to come knocking at their door with sacks full of cash.
Who funded these people? How can you seem to be so technically competent and marketing savvy, and not have a shred of business sense?
Are they going to go "focus on the next thing"?
Do they really deserve to be given funding for anything?
I think if you take someone else's money under the pretense of creating a business, you have some responsibility to the entire system to actually _try_ to create a business. And they haven't!
Another thing. What is this responsibility you speak of? A funded startup exists to find an equilibrium between the needs of the investors and the needs of the founders. Nobody else gets a say in what happens. They have zero obligation to do what you want them to do if you aren't sitting on their board.
It sounds to me like you have strong opinions about what is and isn't the right way to do a startup. You might be right, but still there's something disquieting about taking a culture based on disruption and revolution and writing rules for what is and isn't the right way to revolt against the existing business structure.
(Do you really think I'm saying they are responsible to my opinions? You seem like a smarter guy than that.)
I do have strong opinions about the right way to borrow money from other people:
When someone like Xmarks.com flops, it makes startups look bad to the 2 million users who are going to think twice about storing their data on someone's servers. It makes startups look bad to people who would like to make a return on their investment.
You can disrupt and revolt and rethink and metaprogram all you'd like, especially if you're sitting on VC funding. You can call cashflow an "existing business structure", but at some point, eventually, I think you need to charge something for something.
A simple back-of-the-envelope calculation shows that a freemium, subscription, or (uhm...) donation model won't work. We're talking six-figure revenue, most likely.
I guarantee you their current business model of modifying the SERPs and inserting links to Amazon and other affiliate programs is generating an order of magnitude more revenue than your proposed model would.
While it could backfire, the additional press coverage could be leveraged to a freemium model if they do it before everyone abandons ship.
Having just read the feature list I would happily pay $5 per month for the secure password syncing across browsers.
The bookmarks have a little value to me, but the password syncing has pretty significant value.
After taking so many knocks, it's easy to be disheartened. But why not at least give this a go? It doesn't involve a large engineering investment - just charge for what you already offer! When the alternative is shutting down, where existing users need to move on anyway, you might as well. Those users might appreciate the value of what they have now that it is about to disappear...
They might struggle to get people to sign up when there is doubt about the service surviving. But that cat is already out of the bag, and as I alluded to earlier they could also play this to their advantage (charging now is not a money-grab, it's simply a matter of keeping a valuable service viable).
This is a bit of a harsh thing to say... but is it possible they were not able to find a business model due to lack of trying?
DHH needs to give them some scream therapy about business models. The one he does about asking your customers to pay for your service.
We also considered refocusing Xmarks as a freemium sync business, but the prospects there are grim too: with the emergence of competent sync features built in to Mozilla Firefox and Google Chrome, it’s hard to see users paying for a service that they can now get for free.
Ask me! Ask me! Why don't you ask me ?!!!
Native firefox syncing isn't going to help me sync my Firefox bookmarks to my iPhone, is it? Maybe that is worth something to me, ya know?
Isn't it completely ironic, that on top of HN right now is PG's Y-combinator screed, with how important it is to launch as soon as possible with as little functionality as you can in order to let users guide you to what they really want? So users are okay for telling you what features they want but they are not okay for telling you whether they want to pay ??
I mean okay, maybe I am a complete aberration in being willing to pay a few bucks for xmarks. But they didn't even ask. Maybe there would have been enough other aberrations out there to keep it going as a low-key low-turnover service.
This is the thing that bothers me with the start-up world - it seems so bi-modal: make it big or go bust. What about a quiet, modest little service that can pay for itself and maybe a bit extra?
Bah. I'm sad.
"That woman was sexy...Out of your league? Son. Let women figure out why they won't screw you, don't do it for them."
My suspicion is that because users just used the browser's internal bookmarks they couldn't easily add affordances that would draw attention, leaving no surface on which to advertise. I guess this is one advantage that delicious had, although breaking the bookmarking paradigm to do so was very painful in other ways.
I no longer believe startups who claim their value proposition is "the data will be really valuable someday."
In face, their current model of altering the Google SERPs almost certainly generates more revenue.
I found googling worked better than maintaining personal bookmarks, so Google has become my "bookmark" service.
The nice thing is that I can "bookmark" any link from any browser that I use, as well as twitter and RSS. And I have them instantly on my iPad, phone, notebook, or any machine with a browser without installing any software or extensions.
The blog post suggests that this was a bonus feature, or a value-add, but that's not how I saw it. A previously well-behaved bookmarks sync plugin all of a sudden decided to impose on my preferred search engine. That's a spammy low-class intrusion into my browsing experience.
I turned off the feature, but every time I updated the plugin thereafter it was turned back on by default. I jumped ship as soon as Chrome presented a viable alternative.
Not a bad hypothesis, one I see regularly but 90 days to close sure illustrates the downside and value of searching for that monetization model earlier rather than later.
My feeling was that the lesson from this is don't go into a business if you don't have at least a vague idea how you're going to make money out of it.
I love XMarks and I'll absolutely miss it (and would have considered paying for it) but this would seem to be niaivity in the extreme.
That would seem to suggest that they might have thought about revenue a little earlier in the process and I have a feeling that with hindsight Mitch Kapor might agree.
So, the situation is this: we have a product lots of people want. The naive business model (freemium) won't work -- a simple back-of-the-envelope calculation shows that.
What do you do? Go forward building a very popular product and look for a business model, or quit because you can't think of how to make money from day 1?
For not going the charging user route, could it be that they took some rounds of funding and expanded their company structure and infrastructure greatly to the point that it couldn't be sustained without a huge success? They expanded into the search and other stuff besides bookmark sync'ing. Those are the ones that don't pan out and dragging down the whole company.
Instead of shutting down everything, it would be better to keep the bookmark sync part and dump the rest, and start charging users. Not sure whether the investors would go for the low return route.
In a way this is like shutting down all the cafes that failed to become Starbucks.
I started my last company in 2005, and I've often thought that if we had started a couple of years later when the cloud platforms were available, we could have been a lot more successful. Instead we built a product and an organization around an obsolete technology stack with a high cost structure, and there was no going back.
Web applications don't just grow on trees ...
I think I'd have paid for Xmarks as a service.
Same here. I tried really hard to make Chrome sync work reliably across the multiple devices I use. Kept duplicating my bookmarks, deleting new bookmarks, and just randomly making extra folders. XMarks is just so much nicer and works across all the browsers I use.
and, of course, pinboardIN: @xmarks the model that has worked well for us is 'charge people money for a useful product or service'
edit: source, patio11: http://news.ycombinator.com/item?id=1668553
Any other examples of this?
Either way, I'll miss xmarks since I use it on all my computers and my phone :( Thanks for the great product for the last several years.
I only switched to Xmarks after Google Browser Sync went away, I guess I should just get used to this.
Two million users? Sorry but they know nothing about business and it's worse for the ones who backed them... How on earth they're going to let this go this way?
All of the newer browser sync options that I am aware of are in a convenient location--built into the browser. Opera, Chrome, Firefox, et all are all getting bookmark sync options. However, I would much like to see a way to sync easily between the different browsers again. This is what made XMarks useful once it evolved past being only for Firefox. For now, I'm using all Opera, partially so I can keep everything together including my mobile devices.
1. Adding a feature to someone else's product is a risky business model. If it's popular, the product-maker will implement your feature, at which point your goose is cooked.
2. Adding a free feature to someone else's free product isn't even risky. It is among the surest methods of losing money.
3. Know when to sell. The missed opportunity here was search. With their data and methods, Xmarks was able to improve query results for a predictable fraction of searches. At this point (2008), they should have sold to one of the up-and-coming search engines -- Windows Live or Ask.
xMarks is not like an cut-n-paste iPhone app
(http://www.joelonsoftware.com/items/2009/06/10c.html), which becomes _useless_ after the vendor decides to implement the feature, rather a decent service (Chrome/Mozilla sync does not solve the syncing problem across browsers/iPhone/iPads etc.) which could not its business model.
Why did they assume their primary market was going to be non-technical people? Why not build some thing like stumbleupon of 100 Million bookmarks.
At the moment I rely on Firefox awesome bar, but I have a nagging feeling that it is not reliable (keep not finding sites I was sure I had bookmarked). So a better way to search and organize bookmarks is still being called for.
I can't imagine that there isn't a market for better bookmarking...
I just posted a request for it to be reviewed (under Ask HN): http://news.ycombinator.com/item?id=1735218
When I was making MoreOf.It, I scouted the competition in depth. The only one that stood out was xMarks, and similarity search wasn't even their main gig. They understand the richness of bookmarking data. They've separated URLs into categories, and have the highest ranking sites in those categories. They also nailed similarity pretty well. I might even say their results are better than mine, because they have a much larger index of sites.
Two and a half years ago, when I first built a prototype of similarity search, there were hardly any meta-websites. Besides Quantcast and their ilk, and bookmarking websites, and maybe a couple of bullshit "site worth calculators" (which just multiply site traffic by an estimated CPM), there was hardly anything happening in the meta-site space. Now, there are tons more services that cater to people Gooling an actual url or site name. To name a few, CrunchBase, AboutUs.org, BackType, UberVU, SimilarSites, SitesLike, and sites that aggregate results from these (QuarkBase). "Meta" is blossoming, and it seems like xMarks could take advantage of this with their rich dataset.
For example, as someone told me I should do, they could sell analytics information to websites about their competitors. If you're ZipCar.com, for example, you would pay to know the following: How have people described zipcar.com in the last (x amount of time), and what are the trends of those tags? How is my popularity vs. an automatically generated list of my competitors [ala: similar sites]. Which competitors are trending, and with which tags? Any new competitors that are breaking through the ranks? Some information could give cues to alter your business: What types of tags are related to my business are trending right now (i.e.: perhaps "bike share" is becoming more and more popular. I think that's valuable information. And, like an arms dealer, you can deal to both sides of competition. With 2,000,000 users organizing this set of data (for their own benefit of course), it's pretty confident sample size and it's win-win for everyone.
Frankly, I don't understand what benefits "synchronizing" offers. Why not just store your bookmarks on any number of bookmarking websites (Delicious, Google, etc), and then log-in to that website from whatever browser/computer/device you want? I do, however, see value in the analytics of what people bookmark, and how they bookmark it.
History has shown that any time user-generated content is shown to users, spammers will quickly set themselves up as the ones generating 99% of the content.
Search is beside the point, though. They said they tried it and it was amazing but only for some things. It's true, just search delicious to get an idea of the type of search possible. It's very good for most things, but worthless for finding any content that people wouldn't tag, like 98% of the content of any URL.
My hypothesis was that their data could be used for other reasons.
I use synchronizing in Chrome, and the benefit is convenience. I drag a link to a toolbar (for example some bookmarklet), and I see it on another computer, at the same place in the toolbar there. I also use Google bookmarks, but sync is more convenient.
This was always an issue for adoption in delicious, anyway.
Having said that, it sucks that they ran a popular service that they couldn't monetize.