Ning: Failures, Lessons and Six Alternatives

On April 19, 2010, in Business, by lor3nzo

Ning: Failures, Lessons and Six Alternatives

Ning, the network of social networks that boasted 20 million visitors a month, is making massive staff cutbacks and has announced a complete end to free services for its users. Those who pay for premium services will be asked to pay more, and those who are getting their social networks free of charge will be asked to fork over or phase off the Ning platform.

For a while now, we’ve been seeing Ning through rose-colored glasses. One year ago to the day, the company announced it had attained 1 million unique social networks built on its platform, along with a $500 million valuation. In May 2009, the company rolled out a developer platform along with 90 ready-to-go applications for network creators. On paper, their numbers were looking great.

Then, just last month, we got word that CEO Gina Bianchini had left the company. On the heels of this news came a 40% workforce reduction and a dramatic announcement from the new CEO, Jason Rosenthal:

When I became CEO 30 days ago, I told you I would take a hard look at our business. This process has brought real clarity to what’s working, what’s not, and what we need to do now to make Ning a big success.

My main conclusion is that we need to double down on our premium services business. Our Premium Ning Networks[...] drive 75% of our monthly U.S. 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[...] All of our product development capability will be devoted to making paying Network Creators extremely happy.”

VP Advocacy John MacDonald added, “I feel confident that this change in direction will be very positive for our premium service customers because Ning will be 100% focused on delivering the features and services which benefit you and help you achieve your goals.”

Read more at: Mashable

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{Photography by Fabricio}

A freemium cookbook for your company

On July 18, 2009, in Business, by lor3nzo

Cookbooks

Business models are a tricky subject. There is an old saying among entrepreneurs that there is no real value to writing down your business model, as it will have changed by the time you commit it to paper. The joke has truth to it; I can personally attest to its veracity. But there is something brewing in the larger world of Internet business models that has wide implications: freemium.

Fred Wilson, famed VC and blogger, originally came up with the general concept of freemium, which he explained this way:

Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.

This concept, building an audience, then implementing paid features as later expansions, is slowly becoming the de facto model for online companies. Of course, there are many successful Internet companies today that avoid it entirely. However, they all seem to lose money. Digg, Twitter, and the other media darlings of the Web 2.0 world still live in red ink, even after scaling to mass market size.

This has direct implications for companies today that are migrating parts of their entire business to the Internet. To modify the colloquialism of the Internet that “traffic is the new revenue,” the road to profitability seems instead to be “revenue is the new revenue.” Or, as David Hansson put it delicately to people working on the Internet, “Charge a price!” (Read more at: Building43.com)

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{Photography by Foooooey}

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