Tuesday, July 24, 2012

app.net: Will it fly?

There is an interesting project getting started.  It's called app.net.  It's about creating public-owned Twitter-like service without advertiser support, but with user subscription.  Its mission is to build third party application ecosystem and promote its success.  It's headed by Dalton Caldwell who ran Imeem earlier.  

Caldwell is betting that there will be 10,000 people who are willing to fork off $50 per year to fund app.net service.  And he's promising that he won't ever turn his back on third party application developers, unlike Twitter has done in recent years.

Dalton Caldwell makes app.net pitch.
You can find more information here.

It's an interesting idea.  I'm sure anyone who has been frustrated with the way Twitter has been treating third party developers will be happy with what Caldwell is promising.

But I'm interested in this because Caldwell is attempting to do something that has not been done before.  That is to align the incentives of service provider with interest of users by directly charging for the service that end user receives.  This problem is not limited to social network.  Misaligned financial incentives of service providers with respect to its end users is something we see in our political election system, media and health care system.  These are all big problems.

By proving that consumer funded bootstrapping can work, it can change equations for lot of people who are looking at the other areas.

However there is a big huddle.  This will only work if there is enough utility in the system by bootstrapping critical user base who can create interesting content for the service to be useful.  Harnessing 10,000 users is a good start, but it also needs a way to attract content creators as well as content consumers.  If the quality of service and content are not maintained, people can easily vote with their purse, and entire system can go out of funding.  We just don't know how likely it can happen.

Thankfully there are 1,165 backers at the time of my blog post.  Let's see whether we can change how social network is funded.

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