Ning Takes the Free Out of Freemium

Ning provides tools and hosting for social networks. Like many other social media services, it uses the freemium model. But it won’t for much longer, according to an email to all Ning employees from CEO Jason Rosenthal.

When I became CEO 30 days ago, I told you I would take a hard look at our business… Our Premium Ning Networks… drive 75% of our monthly US traffic, and those Network Creators need and will pay for many more services and features from us.

So, we are going to change our strategy to devote 100% of our resources to building the winning product to capture this big opportunity. We will phase out our free service. Existing free networks will have the opportunity to either convert to paying for premium services, or transition off of Ning.

Matthew Ingram at GigaOM describes Ning’s move as a sign that the much-hyped “freemium” model might not be the road to riches many seemed to think it was. While it’s true that Ning are about to drive off that road, I don’t think that anyone ever claimed freemium as a sure road to riches.

Rather, freemium sometimes seems like the best way of forging a trail on the social media frontier. But Ning is no longer on the frontier. It’s a well-known settlement, in charted territory. Ningsville is known to everyone who might want to set up shop there. Those who have set up shop are being told to pay up or move out.

This is hard on those who didn’t want to set up shop, but just wanted to hang out. It’s harder on those who wanted a storefront to do good things – in other words, it sounds really tough on nonprofits. I wonder if Ning will continue to offer free service to nonprofits.

You may have noticed that I disagreed with Matthew there, but did so very gently and mildly. Others prefer to disagree with fellow bloggers more vehemently. Here’s for example, is 37signals’ David, taking issue with TechCrunch’s Jason Kincaid.

Ning is laying off 40% of its staff and dumping free versions of its service. That’s a shitty day for the people who lost their job and the folks left behind without their coworkers… But I can’t help but be puzzled by the coverage of this. Here’s TechCrunch on the situation:

While the massive layoffs are obviously a big hit to the company, it isn’t all bad news for Ning: the service is still seeing its traffic grow according to comScore. But traffic growth is no longer good enough for the company — it needs to start generating some serious revenue, and advertising clearly isn’t cutting it.

Are you kidding me? The company has blown through $120MM of VC funding over six years, built up massive traffic, yet just had to slash and burn, and you’re saying that “traffic growth is no longer good enough”. How the hell was it ever good enough?

One of the point frequently made in favor of freemium is that the free users don’t cost much. The above quote from Jason R suggests that’s true of Ning. So why cut the free networks? To give David something to gloat about? Unlikely. Because the conversion rate from free to premium isn’t high enough? Maybe.

Because Ning needs to raise more money? That’s what I’d bet on. I suspect that Ning needs more funding, and wants a new story to tell when it passes the hat. Freemium is the old story. Double down on premium is the new story. I don’t see a happy ending. How about you?

Web 2.rightnow: Vertical Platforms

The term vertical platform sounds like an oxymoron, or, at the very least, like a difficult thing to stand on unless you’re a gecko lizard. But I found myself using it when posting about Pikiware yesterday to describe something that’s going on right now.

Let’s briefly revisit the “What is Web 2.0?” discussion and recall two good answers:

  • The web as platform, i.e., if you want to build software, build it for the web and the browser, rather than for any specific hardware and operating system.
  • User-generated content, or the read/write web, or the web as Sir Tim originally intended it.

One of the features of Web 2.rightnow is the web as a platform for platforms. For example, if you want to build a social network, you should consider as your platform, not the web itself, but a platform built on the web. Here’s how the folks at Ning describe their offering.

Ning offers the latest social networking features, all infinitely customizable to meet your unique needs. The Ning Platform makes this possible… your social network on Ning runs on a programmable platform.

Then there’s Bricabox, has been described as Ning for content, the above-mentioned Pikiware, more that I haven’t mentioned, and, I’m sure, more vertical platforms to come.

Thanks to Masato Ohta for making available the vertical photo of a platform at Koga station.

BricaBox: Deja Ning All Over Again?

Is BricaBox staking out the undesirable market territory that was already prospected, and then abandoned, by Ning? Several people have in effect asked this question: most recently, Hashim in a comment on my post; earlier, some of those who commented on the RWW post.

To refresh memories, Ning launched in October 2005 as a web service for the building and use of “social applications.” The Ning Launches! post at TechCrunch was enthusiastic: “allowing people to build cool new stuff that they normally wouldn’t (empowering the users) is one of the best things you can do on the Web 2.0 space.”

But by January 2006, Mr TechCrunch was suggesting it was RIP/deadpool time for Ning. Let’s look at his reasoning.

The idea of Ning… is brilliant… But the reality of Ning is that it’s lost whatever coolness it had, no one uses it and Ning is going to have a very hard time getting people’s attention when they finally do roll out better functionality.

Here’s are the problems:

First, You have to know PHP, or at least HTML, to build anything unique on Ning…

About a year later, in February 2007, Ning relaunched as “your own social network for anything.” A year after that, Ning CEO Gina Bianchini lit the virtual birthday candle and remarked on the size (over 185,000 networks) and growth of the service since the relaunch.

On the same day (Feb 26 2008) BricaBox launched its public beta. Having brought ourselves up to date, we can now address the question of whether it launched into a space already proved by Ning to be inhospitable.

First of all, let’s have a look at the above quote from Mike Arrington. He described the idea as brilliant, but found the implementation lacking. The first of his specific points is that you needed to be able to code in order to do anything with Ning.

BricaBox, in contrast with the Ning of a year ago, does not require coding. To build your BricaBox, you drag and drop content blocks into columns. For example, in my BricaBox keeping track of WordPress Multi-User sites, the page for each site includes a comments block (here’s a sample page).

I could go down the rest of Mike’s list of what was initially wrong with Ning, but I’ll leave that as an exercise for the reader. I’ll tell those of you who skip such exercises that BricaBox does not seem to have made the same mistakes.

So, looking at Mike’s critique of Ning, BricaBox does not seem to be following in Ning’s misdirected footsteps. You might of course disagree with his critique, or with my application of it.

Now let’s look at the question (remember the question – the one in italics right at the top of this post?) from a broader perspective. Over the last couple of years, we’ve seen the growth of blogs, the growth of social networks, and, more recently, the awareness that there are opportunities between the two, or combining the two. So the environment is now friendlier for BricaBox, as a social content platform, now than it would have been a year or two ago.

In particular, BricaBox launched into a more promising territory in February 2008 than did Ning in October 2005 – even if much of the difference is in time, rather than in location. It is also avoiding some of the potholes into which Ning fell.

That’s enough from me. I’d be interested to hear from you. If you are one of those who posed the “Ning question” about BricaBox, what do you think of my answer? Whoever you are, if you’ve read this far (and I thank you for doing so), you might as well take a little more time and leave a comment.

Mug Me Twice…

I read about The Mug Project twice today: once at the Boston Globe, once at Universal Hub.

We raise awareness about the unnecessary waste caused by the use of disposable beverage containers and advocate for the use of mugs as an alternative.

We? Yes, I joined the project, already being in synch with its aims. That’s not just because reusable mugs are better for the environment. They are often better for the pocket, in that many places charge less to refill a mug than they do to give you a disposable cup of similar size. One such place that I’ve used a lot in the last month or so is Canto 6 in Jamaica Plain. I also find mugs to be better for the taste buds, since disposable cups mar the taste of coffee.

The Mug Project is a network: it’s implemented as a social network at Ning; I am member 50; and, although it started in Jamaica Plain, there’s no reason the network shouldn’t spread as far as…. Cambridge (MA)… Cambridge (UK)… and further.