I guess I’m part of the problem. I liked the idea of App.net when it launched – a Twitter-like service where the users were customers, not the product being sold. The service raised over $600,000 before launch from potential users, with the idea being that the service wouldn’t contain advertising, but instead would be based on a subscription model. Just a few months into the project, App.net announced a freemium plan. Now I have my doubts about how long the service will survive.
App.net has announced that while sustainable, it is laying off all full-time employees. It sure sounds like some spin in the blog post announcing the move.
The good news is that the renewal rate was high enough for App.net to be profitable and self-sustaining on a forward basis. Operational and hosting costs are sufficiently covered by revenue for us to feel confident in the continued viability of the service. No one should notice any change in the way the App.net API/service operates. To repeat, App.net will continue to operate normally on an indefinite basis.
The bad news is that the renewal rate was not high enough for us to have sufficient budget for full-time employees. After carefully considering a few different options, we are making the difficult decision to no longer employ any salaried employees, including founders. Dalton and Bryan will continue to be responsible for the operation of App.net, but no longer as employees. Additionally, as part of our efforts to ensure App.net is generating positive cash flow, we are winding down the Developer Incentive Program. We will be reaching out to developers currently enrolled in the program with more information.App.net reminds me of Google+ in the sense that I really liked Google+, but that didn’t matter if my friends weren’t going to leave Facebook for it. With App.net, it didn’t matter how much I liked the idea, if most of the people that I wanted to follow were only on Twitter. For that reason, I never purchased a paid subscription. At the end of the day, a social network does need some sort of critical mass to be more than just a niche player.
Can a niche player survive? Sadly, I’m betting that this one can’t. Would you be sad to see it go?