Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The quiet death of Ello's big dreams

waxy.org

Post reply on HN
Print view View original

171–180 of 264 posts

Re: The quiet death of Ello's big dreams

#171

Post by NetOpWibby »

indymike wrote: post #169
NetOpWibby wrote: post #6

This post is a long-ass “told you so” and honestly, I’m here for it. I too had an Ello account and thoroughly enjoyed its minimalist nature. VC money really seems like the beginning of the end.

> VC money really seems like the beginning of the end. For a lot of businesses, raising VC money is a mistake because rapid growth just isn't the right strategy. VC is expensive - you give up a lot of equity every round and are betting that your ever shrinking slice will be bigger because the whole pie grew faster. That is a very tough target to hit.

You’d think everyone would understand this by now.

Re: The quiet death of Ello's big dreams

#172

Post by gamepsys »

Lerc wrote: post #27

Taking investor money means users will required to pay, one way or another. Without an explicitly capped profit, I can't see how this doesn't eventually lead to exploitation of the users. I would like to see a donation/optional subscription model with tiered features as is seen in Patreon/Kickstarter etc. with the distinction that the tiers are community wide instead of being bound to the individuals donating. Displa…

> I would like to see a donation/optional subscription model with tiered features as is seen in Patreon/Kickstarter etc. with the distinction that the tiers are community wide instead of being bound to the individuals donating.

Discord has a bit of this. Each 'server' can be 'boosted'. Boosted servers have access to more emoji slots, better audio/video quality for calls, and larger file upload limits.

Re: The quiet death of Ello's big dreams

#173

Post by bruce511 »

bko wrote: post #170
sirspacey wrote: post #132

Excellent, balanced post. We’re at the end of a grand experiment of “you can take VC money and deliver a tech with new values, one that people want.” The only people still claiming you can just haven’t run out of their last funding round… yet. We have 20 years of evidence on what tech businesses can be built on the Internet that make money. It’s narrow and mostly can’t solve the problems that remain. The escape hatch…

Why can't you take VC money and run the business the way you want? They can't force you to do anything. Sure they can pressure you, but if you have ownership and they have a minority stake, you can do what you want. Ello could have stopped at any time. Why did they raise 5 million only 6 months after their first round and another 5 million 6 months after that? What were they spending their money on? I don't see how t…

>> Why can't you take VC money and run the business the way you want?

Because taking VC money let's you defer the revenue question. And by deferring it, you then have to bait-and-switch the users.

Let me be clear. It's OK to get startup money. Businesses need capital to get going. But revenue should be the original business plan.

In other words, who is paying for this site, and how? Ello ruled out advertising and data sale - that's fine, but that leaves subscriptions, donations, premium features, whatever.

For a "regular" business, each wants to become sustainable, its important to become profitable ASAP. The team is focused on revenue, keeping costs down and so on. Once it can pay expenses and salaries it can run forever.

The obvious revenue here is subscriptions. Income rises with expenses. But of course if you charge you'll grow slowly. So you start free, which means customers will rebel later.

(Anyone see parallels to Open Source companies here?)

VC money allows you to kick this can down the road. Small angel investment? Sure, no problem. You still have majority control. But if you are using that money to pay salaries, then it'll quickly run out. If you don't have enough revenue, you could just close up, but you dont, you go get a series A. Then B. Then C and so on.

The implication is you are selling equity. One day that investor equity exceeds 25%. A round or two later it's over 50%. You've lost control. (And I'm assuming all the founders are in agreement all the time - in reality one wants to cash out, and joins the investors camp well before the 50% is reached.)

So, you can grow slowly, and sustainably. Or you can take money, grow fast, and "hope".

But make no mistake, when you sell -equity- you are selling control. You are selling your right to dictate "principles". That is -what- you are selling-.

Since you are selling to people who are in it for the financial return, the end result is like night following day; inescapable.

If you want to build a business on principles, not profit, you HAVE to answer the revenue question first.

Re: The quiet death of Ello's big dreams

#174

Post by jamiek88 »

Zigurd wrote: post #127
forbiddenvoid wrote: post #73

Earlier quoted context omitted.

There's a couple of key differences between Google backing Google+ and Meta backing Threads. 1. Meta's entire business is social apps, and Google's is not. There are strategic differences in approach as a result. 2. Google+ was an attempt to disrupt Facebook's rise at the height of Facebook's popularity. People _liked_ FB then - so trying to get them to switch to another product was harder. Threads shipped during a t…

G+ also tried (was told to?) show relevance to other Google products by becoming a universal and mandated discussion thread mechanism. It wasn't ready. Got the totally expected blowback. In contrast Meta isn't trying to Threadify everything. The addition of ActivityPub is an experiment that should be run in Threads.

Another thing is people weren't just meh about G+ but because of the 'you now must use real names across our properties, yes, including youtube' message people were actively hostile to it.

Re: The quiet death of Ello's big dreams

#175

Post by bruce511 »

tytso wrote: post #54
Andrex wrote: post #36

> I felt sad for the guy. It’s awful going through life never believing in anything. Being an idealist is fine, but being a dick is not. This article took on some personal schadenfreude after I read this line.

There was definitely a certain amount of "I told you so" vibes, but I don't blame the author. It appears that he was attacked by a lot of Ello founders and fans for raising some cautionary notes. And as it turns out, he was right and they were wrong. We would all like to have a model where users don't get charged money, and yet are not the product. But I haven't seen a model that works to date. In some cases, I don't…

>> But I haven't seen a model that works to date

Sure you have. Amazon grew without giving stuff away for free. Customers paid (just below market rate) from day 1. This demonstrated the -convenience- of ecommerce. It had revenues from the first sale. Yes, it spent mountains of VC money on marketing and development, but -not- on just buying stuff for you so you think it'll be free forever.

Uber is the same, although it's less clear that users will pay gor what a ride really costs. (And their margin makes it attractive for competition)

In both cases though there us revenue from customers from day 1. You can wind prices up. It's really hard to "go from free to paid".

Re: The quiet death of Ello's big dreams

#176

Post by bruce511 »

Lerc wrote: post #27

Taking investor money means users will required to pay, one way or another. Without an explicitly capped profit, I can't see how this doesn't eventually lead to exploitation of the users. I would like to see a donation/optional subscription model with tiered features as is seen in Patreon/Kickstarter etc. with the distinction that the tiers are community wide instead of being bound to the individuals donating. Displa…

>> I would like to see a donation/optional subscription model with tiered features as is seen in Patreon/Kickstarter etc. with the distinction that the tiers are community wide instead of being bound to the individuals donating.

Can you rephrase this as;

"I'd like to see a model where I can pay a lot, and thus allow 10 other users for free" ?

How about something along the lines of "it costs $10 per useful per month to make the platform sustainable. A subscription is $100. When you subscribe you pay to keep 9 other users on a free account."

In other words, my question is, are upu in the 10% paying for everyone, or are you in the 90% getting it for free?

Re: The quiet death of Ello's big dreams

#177

Post by reso »

urbandw311er wrote: post #112
reso wrote: post #109

I'm not sure why this post focuses so much on the angel investment. There are probably 10 reasons why Ello failed, starting with the fact that bootstrapping social network userbases is hard, and ending with users won't pay for social networks. None of these are directly related to the fact they built the site with investor money and not volunteer hours.

I think it’s fair critique for the post to focus on the VC (not angel) investment — the expectations of VCs and pressure to deliver a profit could easily have been a significant factor in the decision made by the CEO to focus on substantial revenue growth.

But did they ever even cover their costs? If a business is stable for its current size, and then VCs push you to grow and that kills the company, then yes, that company was killed by VC pressures. However, AFAIK, ello never made much money at all, which is the most proximate reason they failed.

Re: The quiet death of Ello's big dreams

#178

Post by throwaway167 »

sirspacey wrote: post #132

Excellent, balanced post. We’re at the end of a grand experiment of “you can take VC money and deliver a tech with new values, one that people want.” The only people still claiming you can just haven’t run out of their last funding round… yet. We have 20 years of evidence on what tech businesses can be built on the Internet that make money. It’s narrow and mostly can’t solve the problems that remain. The escape hatch…

Few web businesses have a truly huge minimum efficient scale.

For those that do, it's huge. For those that don't, it's quite small.

And for the small ones, Wordpress or similar powers their laundromat. A good small business. As you say, one that takes effort to run. Stripes the banks POS, perhaps someone has some mid scale in Tide sales in the middleware SaaS, there can be a franchise that doesn't fully adapt to how many socks Vs fur local customers have.

But think laundromat. Local restaurant. Which are fine businesses.

Re: The quiet death of Ello's big dreams

#179

Post by jrnichols »

Earw0rm wrote: post #37
unsupp0rted wrote: post #23

Earlier quoted context omitted.

I remember when something-something twitter tried to migrate to Threads for like a week. And to Mastodon before that. Remember when tech Reddit tried to migrate to Lemmy? A hardcore handful of people migrate await from the Death Star and stay migrated (maybe a couple hundred medium accounts, and 1 or 2 bigger ones), but everybody else trickles back onto the Death Star eventually. The only thing that works to get peop…

Twxttxr is getting pretty close now - maybe in some ways surpassing Digg in awfulness. Specifically the massive level of pornbot traffic, and algorithm changes that seem to be intentionally surfacing posts to adversarial users who will then go on the attack.

am I the only one that has not seen porn bots or had replies from them on Twitter? I see this mentioned as a huge problem, but are users in general actually seeing this?

Re: The quiet death of Ello's big dreams

#180

Post by paxys »

No amount of manifestos, bills of rights, public benefit designations, PR campaigns, taking VC funding, not taking VC funding, not selling out or whatever the hell else we want to talk about can make up for one simple fact – a company needs to bring in more money than it costs to run. Ello tried for 8+ years but could not manage to do that.

This post is focusing solely on the VC funding aspect and proclaiming it as the cause for failure but ignoring the fact that Ello was dead in the water regardless of it. The company had no users and no business model. Heck a reasonable amount of ethical advertising may actually have done some good for the community and helped the product survive.

Post reply on HN