This is well said and reflects my experience. These days I look for services that a) take money, b) probably won't get acquired soon. (a) is easier than (b), but if you look around you'll eventually find something.<p>Good examples are:<p>* Instapaper — Marco's one-man-shop, stable and profitable,<p>* Smugmug — family owned, users pay them money, stable and profitable,<p>* Dropbox — which I also pay for — but is still unlikely to find an acquirer.<p>I recently decided not to sign on several new services because I couldn't see a business model.<p>I'd like pg to address this in one of his essays, given that YC is all about building stuff people want without paying too much attention to the business side of things (e.g. actual cash flow), and with the explicit goal of reaching an exit for the founders.
I really wish I could pay for free services just for the peace of mind that they'll stick around.<p>I've got my website on Tumblr and by using their service I feel like I'm making a pretty big commitment to them, but since it's free it doesn't feel like they have the same level of commitment to me.<p>I freaking love Tumblr and would be happy to pay. But right now it's not clear to me if they're making any money at all and that's a big concern as a user. Just remind me, how do those guys make money again?<p>Also, Pinboard founder Maciej Ceglowski wrote on the topic of being a free user not that long ago: <a href="http://blog.pinboard.in/2011/12/don_t_be_a_free_user/" rel="nofollow">http://blog.pinboard.in/2011/12/don_t_be_a_free_user/</a><p>The TL;DR version was: Exploding growth + free service = losing lots of money. Ouch.
I think it's a little .----- and more than a little hyperbolic to suggest that Posterous wasn't a business, but rather just an exhibit for the team's portfolio.<p>The fact is, Posterous tried and lost. By all accounts, valiantly.<p>I find myself nodding when Maciej writes "Don't Be A Free User", because he is competing with free (and also because I want him to give me a tour of his vault of golden coins). Pointing out that your pricing scheme makes you a sustainable competitive alternative is fair.<p>But to the best of my knowledge, you aren't competing with Posterous. Why do you feel the need to rub this in?<p>I sincerely apologize if I'm just missing some parodic element of this post.
I'm not sure if it's the architects fault or the real estate investors. Land is so cheap, and investors seem to really like watching architects build stuff. For a long time, investors have believed if there are people in the building, the coffee bar or the valet parking will make them a lot of money.<p>The problem is that it has also conditioned people to believe that all office space should be free. Those who build incredibly efficient office space are still going to have a hard time charging rent.<p>These architect aquisitions are every bit as much about the investors as they are the architects. Until investors get selective and demand real value, I'm not sure it's going away.<p>(Wow, I might need to go to prison for extended torture of an analogy.)
The biggest loss is the backlinks to your carefully created content.<p>For that reason alone I would never consider hosting something like a blog on real estate owned by another party.<p>Another risk is that the domain sooner or later ends up in the hands of some scammer or pill pusher.
Yeah, this has happened a number of times, enough that I'm wary of investing time and energy into using a service that appears to not have any means of making money. Last fall, I evaluated Posterous for my personal blog, but one of the reasons I ended up going with Squarespace instead is because it's a paid service:<p><a href="http://kylecronin.me/blog/2012/3/13/my-thoughts-on-posterous-acquisition.html" rel="nofollow">http://kylecronin.me/blog/2012/3/13/my-thoughts-on-posterous...</a>
I use Posterous, Weebly, Hacker News, and twitter, and love them all. I don't pay a nickel to any of them and never will.<p>I hope very much that they all last forever.<p>But I will lose nothing if any or all of them disappear without giving me a chance to retrieve my data. Why? Because everything I've ever posted to any of them was already saved on my hard drive first. A simple solution for a frugal, OCD hacker who wants the best of all worlds.<p><HN201203141055.txt><p>[UPDATE: Several people have suggested automating this or making it easier. My response: If you're a hacker and more than 5% of what you type goes anywhere other than your code repository, you should probably reevaluate what you're doing before you make it any easier to do it.]
Interesting metaphor.<p>The reason this doesn't happen with real-estate is because unlike startups - there are no Facebooks.<p>Someone once explained Disney's town of Celebration to me this way:<p>It took Disney more than a decade to develop Celebration. They spent several hundred million dollars. In the end, they made about $200 million. The ROI on <i>Pocahontas</i> was significantly better.
Took me a minute or so to figure what he was talking about. I am not sure what the greater message is, here. Was Posterous "evil" for selling themselves to Twitter? Or, should users generally beware any company that does not have a revenue? At what level of revenue should users stop worrying? Not saying that it is likely, but should users of Dropbox worry that Apple will acquire them?<p>Completely separately, Posterous lost all personal credit when they did that anti-Tumblr campaign a while ago. Not that I care at all about Tumblr, but I felt it was in bad taste. When a company does bad things, I cannot help but imagine that they will do other "bad" things.
This used to be called "Who is not on LiveJournal[1]"<p><a href="http://linuxmafia.com/faq/Essays/winolj.html" rel="nofollow">http://linuxmafia.com/faq/Essays/winolj.html</a><p>Notes:<p>1. An interesting story itself: <a href="http://en.wikipedia.org/wiki/LiveJournal" rel="nofollow">http://en.wikipedia.org/wiki/LiveJournal</a>
I think it is an interesting point that people get more value out of your product when they are invested in it.<p>When friends call me for marketing advice, I enjoy talking about it, and am always willing to share some insight for free, but this makes me wonder if I am doing them a disservice.<p>Odds are, they just resent the advice, or even if they agree with it, how likely are they to use it if it's free.<p>Seems like sharing ideas and free advice is a lose-lose.<p>If you really want to help people, make them pay for it!
In my limited but growing experience dealing with free and paid users, I see it this way: when a customer pays for your product, it's like they're saying "I trust you." When you charge for something, you are asking for someone's trust because you believe in what you've created. You owe it to yourself to make people pay for what you build.<p>Maybe Aladdin said it best...do you trust me? (<a href="http://www.youtube.com/watch?v=kkwMEwenaQQ" rel="nofollow">http://www.youtube.com/watch?v=kkwMEwenaQQ</a>)
But what's the alternative?<p>Assume that Posterous was charging for their services with a monthly fee. Is this any guarantee that they wouldn't take the same offer to sell? Or would you just be out your monthly fees and still have to move?<p>The more money they have coming in, the more desirable an acquisition they become. In theory, they might have less pressure to sell if they have cash flow, but it's not clear this is enough to counteract their increased appeal to an acquirer. Rather than indicting "free" services, it would seem more rational to avoid "cloud" services whether paid or unpaid.<p>Perhap you should choose only services from companies you feel are too large to be acquired (Google) or companies whose code is available to run on your own if they were to close down (Github). Or stick with self-hosted solutions with that plan that you can change hosts as necessary.<p>For any company you chose, I think you have to presume that while they will try to keep their service running, they will be doing so primarily out of self-interest. The more you can align your interests with theirs, the better the chance that the service will continue and you won't have to move.
I think that Reginald is talking about social media platforms' APIs and other infrastructure that 3rd parties can connect to for whatever business they are in.<p>It is valid concern that, for example, Facebook may decide that providing their graph APIs is suddenly not in their interest and cut off the service.<p>Same thing happened with some Google APIs like the Buzz feed. I only briefly used the Buzz feed for a small customer task one time, and the termination of Buzz and the feed does not hurt me, but it could have.<p>I find the user experience using G+ to be good, but the APIs are not in anywhere near a form where I would build part of a business on them.<p>The situation is different with other infrastructure like AWS, Heroku, and AppEngine: I understand the long term business model of the providers and trust that these services will likely be available for a long time.
I think we're currently in the era of the government-funded type of web projects that serve a great purpose for a large number of people who wouldn't otherwise be willing to pay for them. Right now the climate is such that developers with an idea can very inexpensively get that idea built and used, which can in turn, bolster their own resumes or possibly even result in an IPO exit or acquisition.<p>Profit is not crucial because the only asset that has seen substantial investment is time. However, I don't feel sorry for consumers of these services. The services are, after all, free, and don't usually make any guarantees that they will be around for ever. In this case we're talking about a blogging website that's been around for a few years, not a bank. A little perspective helps a lot.
That's nice, but what's the alternative?<p>Putting the onus on contributors to back up what they publish would be a crap shot; even with backups there may not be a plan for recovery, and recovery may be impossible if the contributor is unable or unwilling to handle it themselves.<p>Commenters and other participants have it even harder, due to the variety of sites and platforms they participate in (Lazarus can help saving one's own comments now that CoComment is shutting down, wget can be used to rescue content with advance warning).<p>Maybe the best alternative would be a commitment from the platforms to keep a low-bandwidth, possibly throttled archive available; failing that, to outsource the work to an organisation like the internet archive. This would be a step up from the current standard, which is, at best, a period of warning (lets external participants make backups), or a commitment to data liberation, which unfortunately ends up with many contributors failing to republish their content.
This reminds me of the advert Google put out recently where it shows a father documenting his daughters life in YouTube, and sending her emails (from birth) with the videos on with a note of what it was all about in the email. She comes back to the email 20 years later and sees the document of her life with it all in.<p>I just don't buy it, how do we know Google will be around in 20 years, never mind free solutions not supplemented with paid for services?<p>Nothing is guaranteed, nothing is secure, nothing is forever. I wish I could say I could make a solution that would ease this problem but my solution might not stand the test of time. Shit happens! Saving it to your hard drive means you are only backing it up to something that could explode (dramatisation). Further backing up to the cloud is relying again on a solution that you are expecting to work and stick around, it may not!<p>You need to go into any situation like this with some level of acknowledgement that it just might not work.
For a second, he had me thinking that there were actually cool office buildings somewhere filled with interesting people providing free office space complete with coffee bars.<p>That actually sounded like a great deal. Easily worth the hassle of possibly having to move out and find space elsewhere.
This happens repeatedly outside the startup world as well. The company I work for has relied on technology that Microsoft developed, supported, and subsequently walked away from. That is the nature of both business and technology.
Is it a little ironic that the blog is posted on Posterous? I only say that cause the complaint may disappear before its intended effect ring through the rest of the startup community.
I've setup <a href="http://p.ostero.us" rel="nofollow">http://p.ostero.us</a> It's a paid Octpress based blogging service for the ex-posterous users - not more free rent - using an awesome blog platform - and a ongoing income generating service<p>Hopefully this will help other posterous user wondering where to go<p>* <a href="http://news.ycombinator.com/item?id=3713092" rel="nofollow">http://news.ycombinator.com/item?id=3713092</a>
An interesting satire on what's happening in the tech world, however, I'd be hesitant to be quite as critical. In the end, the service is free, it's not something that has to be provided. You should enjoy it while it's there and appreciate it, not feel entitled to it. Is it a little bit of a dick move? Yeah, but then again, what would you do if you were in their position?
So where in the world does this kind of thing happen? To me it sounds like a made up scenario and then an argument against the made up scenario. Could just be that it doesn't happen in the parts of the world that I have lived and worked though.<p>UPDATE: Thanks for the clarification everyone. I guess I'm way too literal early in the morning.
In response to that all I can say is I have a landlord issue as well.<p><a href="http://bitchlandlady.tumblr.com/" rel="nofollow">http://bitchlandlady.tumblr.com/</a>
This is an interesting analogy, yet laughably impractical and wrong.<p>Paid business models do not guarantee success. If they did, Posterous would have charged. It seems land is so cheap, landlords have concluded the best possible chance to find a business model is to be a free landlord. That is a great world for tenants since they don't have to pay rent, and it's a tough world for landlords since they have to maintain beautiful buildings with donation boxes and ad banners.<p>Given the lack of tenant laws (imagine if there were tenant laws...) paying rent is no guarantee of anything. You can be evicted, abused, moved around, neglected, or anything else without warning or compensation. That's a good thing, which demonstrates how strained and poor this analogy is.<p>Good luck finding quality, innovative, paid services to match Facebook, Twitter, and Posterous. Let us know how that goes. You'll have some luck, but I'm not sure your chances are much better. I call bullshit.
I think we have missed the un-mentioned point...<p>What does this say about Twitter that they have to buy product staff? What does that say about the value of their IPO?<p>The Thiel proposition would be, long-term, we should be betting against every one who IPO'd thus far.