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Don't Be A Free User

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Re: Don't Be A Free User

#151

Post by ahoyhere »

thaumaturgy wrote: post #2

To partly rebut what maciej is saying here, I'd point out that Backblaze is a very successful not-free service which was also courting purchase offers; paying for a service is no guarantee that you'll get to rely on that service forever, which is a major failing of web-based services in general (and a frequently-mentioned point from my clients when I suggest using some web-based service or another). But I mostly agre…

Is Backblaze profitable? A lot of services which charge money still don't charge enough to be self-sustaining.

A self-sustaining product may still be sold. But if a product CAN'T sustain itself, it MUST either be sold, or shut down, eventually.

Re: Don't Be A Free User

#152

Post by SonicSoul »

hyyypr wrote: post #67
SomeCallMeTim wrote: post #40

Earlier quoted context omitted.

Delicious, for all intents and purposes, WAS shut down, and a new, barely related site was put up in its place. I was a Delicious user for years, with thousands of links tagged, and I continued using it for as long as I could stand under Avos, but the features that they cut and/or broke in the transition finally made me throw up my hands, give up, and switch...first to Trunk.ly, which Avos then bought and shut down (…

What exactly do you have against delicious' new interface ? I continue using it as I always did, and except for the design I barely see any difference. Maybe I'm missing some key feature here ?

the whole usability of tagging [completely unnecessarily] changed. their own bookmarklet (and functionality on their site) changed so that when you press the save button it saves right away, and then you have a option to add tags. i'd find my self quickly adding and then having to find my link and editing it. what is the benefit of these changes? why would you do that to all your users?

Re: Don't Be A Free User

#153

Post by ahoyhere »

phillmv wrote: post #27

I love Pinboard, but it's a one man operation. Maciej is extremely susceptible to get hit by a bus tomorrow, leaving me without my $9.23 and all of my bookmarks. You're telling me that if someone offered you $1-5 mil to lead a team at insert huge tech company here you'd turn it down? Bitch, please. That chart is overall correct, but it's not like paying is suddenly going to be a panacea. I give flickr $25 a year, but…

phillmv, our company is a 2-man operation (me + my husband, no less) plus freelancers. We run 2 SaaS products: http://letsfreckle.com http://charmhq.com

Recently we fielded an acquisition offer for Freckle. Just the app - no strings, no nasty jump back to being an employee, etc. It was for half a million dollars.

This gave us a lot to think about. Half a million wasn't enough. Was a million? Two?

And the conclusion we came to was: no. Not worth it. A good little SaaS like ours is a kind of a sinecure. We don't have to work much on Freckle at all and it keeps chugging along earning more and more every month. (And the more we work on it, the faster it grows. It's a choice we can make on a month by month basis.)

It would be damn foolish to sell it.

It was fun to think about. What would we do with a million dollars? But the fact is, within 3.5 or so years, Freckle would have brought in that much revenue anyway. And then it would KEEP bringing in more, forever.

I would definitely NOT take a $5 million offer if I had to be an employee.

I bet Maciej wouldn't either.

Re: Don't Be A Free User

#154

Post by ahoyhere »

gkoberger wrote: post #16

This article operates under the very incorrect assumption that paid services never shut down and free services are never carried on by their purchasers. See Flickr or YouTube or PayPal or Skype or Picnik or Grand Central or Picasa or Siri or mySpace or FriendFeed or FeedBurner or even pinboard's biggest competitor Delicious for examples of the latter. As for the former, there's an unlimited number of examples (for a…

Flickr, YouTube, FeedBurner, etc. were obviously not charging enough money to sustain themselves. $25 a year vs free doesn't make that big a difference when costs are $100+/year per user.

I pulled the $100+/year cost per user figure out of my ass. It's probably much higher for Flickr.

I have it on good authority from people very close to the project that Flickr was never once in the black. Ditto for Skype.

Your whole comment, in fact, supports the idea that "if a startup loses more money than it brings in (whether it brings in $0 or $toolittle), it is extremely vulnerable to being bought and screwed over."

Re: Don't Be A Free User

#155

Post by ahoyhere »

tlots wrote: post #74

"You might call this the anti-free-software movement." While I agree with his argument (and I'm a pinboard customer), I am not for mixing the term 'free software' with 'free, unmodifiable, supported, centrally hosted web service'. To me, free software means code sharing and the ability to modify software and run it personally as I choose. The difference boils down to resources. With free software I do get the source;…

It was clearly a joke. Laugh a little. :)

Re: Don't Be A Free User

#156

Post by ahoyhere »

patio11 wrote: post #112

I think geeks have severely irrational expectations as to what they are "owed" by someone just because that someone has created something which they used or enjoyed.

I don't think it's a sense of entitlement in this case.

Why shouldn't people be upset when they would gladly pay to keep a service alive, but the silly creators decided not to let their customers pay out of some misguided hope for megariches?

This isn't about getting something for free. It's about the way you feel when somebody you love makes the same criminally idiotic mistake, over & over -- no matter what you do or say or how you try to help -- and ends up really hurting themselves AND others.

Like the whole Xmarks fiasco. The guy was totally against the idea of asking his customers to pay, and he had huge costs, so he announced he was going to shut it down.

Then his users revolted to such a degree that he finally decided to accept payments. And his customers paid up.

Result: Xmarks is still alive & appears to be thriving.

It would have simply fallen off the face of the earth, forever, if not for its devoted users getting angry enough to act.

Re: Don't Be A Free User

#157

Post by amalcon »

fauigerzigerk wrote: post #135
patio11 wrote: post #112

I think geeks have severely irrational expectations as to what they are "owed" by someone just because that someone has created something which they used or enjoyed.

I couldn't disagree more. Startups just going away over night is _the_ major objection I hear from business users (small and large) against using any of these products. Purely consumer oriented entertainment kind of apps may be a different matter, but for anything else consumers are very apprehensive when there is any talk of losing access to an app they rely on. Unlike geeks, they can't just take some CSV dump and m…

I know a guy who runs a small web hosting business. He has actually gotten this question: "If you die, what happens to my website?"

Re: Don't Be A Free User

#158

Post by Tcepsa »

jarek wrote: post #104
Tcepsa wrote: post #30

Clearly Google is going to get bought out by somebody any day now and we can kiss those searching, mapping, and mail services goodbye. As are Facebook and Twitter--better find someone that you can pay for your social networking, stat! And obviously Hacker News isn't going to be around for long...

Hacker News isn't exactly ran off VC money and in need of an exit.

I think that's an important distinction. I'd have been much less grumpy about the article if he'd said "avoid using services that someone is providing for free off of investor capital with no plan for monetization."

Re: Don't Be A Free User

#159

Post by phillmv »

ahoyhere wrote: post #153
phillmv wrote: post #27

I love Pinboard, but it's a one man operation. Maciej is extremely susceptible to get hit by a bus tomorrow, leaving me without my $9.23 and all of my bookmarks. You're telling me that if someone offered you $1-5 mil to lead a team at insert huge tech company here you'd turn it down? Bitch, please. That chart is overall correct, but it's not like paying is suddenly going to be a panacea. I give flickr $25 a year, but…

phillmv, our company is a 2-man operation (me + my husband, no less) plus freelancers. We run 2 SaaS products: http://letsfreckle.com http://charmhq.com Recently we fielded an acquisition offer for Freckle. Just the app - no strings, no nasty jump back to being an employee, etc. It was for half a million dollars. This gave us a lot to think about. Half a million wasn't enough. Was a million? Two? And the conclusion w…

>But the fact is, within 3.5 or so years, Freckle would have brought in that much revenue anyway. And then it would KEEP bringing in more, forever.

So… straight up your expected value was higher than the offered acquisition price ;).

If they offered you more revenue than you expected to make in 10 years, instead of 3.5, you might rethink the offer. Different strokes for different folks. Maybe in 3.5 years you'll be tired of that product in particular and you'll be looking for a better exit, etc, etc.

Maybe the employee position is really sweet. You never know how your own life changes.

Re: Don't Be A Free User

#160

Post by ahoyhere »

phillmv wrote: post #159
ahoyhere wrote: post #153

Earlier quoted context omitted.

phillmv, our company is a 2-man operation (me + my husband, no less) plus freelancers. We run 2 SaaS products: http://letsfreckle.com http://charmhq.com Recently we fielded an acquisition offer for Freckle. Just the app - no strings, no nasty jump back to being an employee, etc. It was for half a million dollars. This gave us a lot to think about. Half a million wasn't enough. Was a million? Two? And the conclusion w…

>But the fact is, within 3.5 or so years, Freckle would have brought in that much revenue anyway. And then it would KEEP bringing in more, forever. So… straight up your expected value was higher than the offered acquisition price ;). If they offered you more revenue than you expected to make in 10 years, instead of 3.5, you might rethink the offer. Different strokes for different folks. Maybe in 3.5 years you'll be t…

At its current run rate, 10 years would be $2.5 mil. Except it's growing. I expect it to be earning $500k/yr run rate within 24 mos.

And like I said, we could leave it alone and it would still continue to grow. There have been times, while we were still consulting, where we completely abandoned it for months (didn't even answer support emails) and it just chugged along.

These days when we're not adding features, we spend maybe 1 day a week on it, max. And we're adding features because I have big ambitions. We could just let it be and it would still earn very nicely.

When you get to the point of looking at $500k/yr of gross revenue forever, when would it make sense to give that up?

We could hire a full-time support person and let them handle it and still have about $400k net (taxable) left over after other expenses, basically forever. Doing nothing.

We could take $5 million but there's pretty much no way we'd get $400k of interest off it each year.

As for the employment offer being really sweet… there couldn't possibly be a job sweeter than what I've already got.

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