This is a common error in human misjudgement that just because you had one relevant idea in the past it automatically follows future ideas should be so relevant. But, they're not, and 10% of the people are not going to pay for no ads.
I don't need hard data. To me it's common sense. Rare is the company making $12B per annum. For example, The Coca-Cola Company made $9B in 2012. Even rarer is an established company with a single idea that suddenly takes them to that level of prosperity. I'd say so rare as to be nonexistent.
However, it's very common for already successful people to think all their ideas are good. Wouldn't you be biased towards your own greatness if you were named 2009 Nerd of the Year by GQ magazine, one of the Most Influential People in The World by TIME, etc?
When you've been told by the world that you're brilliant, it's easy to be seduced by that then go on further to make a horse's ass out of yourself.
citation needed (on one sixth of the world's population)
Before you trot out their subscription numbers, I should point out that I know quite a few people who have multiple FB accounts for a variety of reasons. That portion goes up substantially when you add people who deliberately got rid of accounts and then created new ones.
Here are a few use cases. For every one of them, I know at least one person (sometimes many) who falls into that use case.
Guilds in online games often use FB groups to coordinate. If you want to spy on other guilds, you'll need a different FB account. I've known people with dozens.
People create and abandon accounts. When they later decide that they want to use FB after all, it can be easier to create a new account than remember how to get into the old one.
People often want to hide part of their lives from others. For instance a pre-op transgender person might be part of transgender groups but have family who they have not discussed their plans with. Having multiple FB accounts is a way to separate these parts of their life.
People create accounts to use as sock puppets for online arguments.
Damn... the people in your life are very interesting, clever, and busy. I would have never guess most of those reasons. The people in your life sound like fun... and occasionally combative ;)
That said, I also think that people open up to me a surprising amount because I'm willing to talk and listen. You never know what stories you'll hear.
For example after 9/11 I had some interesting conversations with a woman who had been a minor princess there before the Russian invasion. She was the janitor who cleaned up the office I worked at at night. I believe that I was the only person in my company who was aware of her personal history.
Stop and think about that. I bet that you've seen a lot of people with interesting histories that you know nothing about.
I heard about that. I thought they died out years ago. I did not realize they are still alive.
It might also be your demeanor. People seem to know who to trust through the little things. Do you act differently than most of the guys you're around with? Less judgmental, more ears than mouth? People confided in personal stories, but nothing close to the 9/11 janitor staff. Ever heard of ABM?
Looking back at what I said, I suspect possible confusion.
She was a minor princess in Afghanistan back in the 1970s. Not a Russian one. Having a princess from then still alive was not surprising. Realizing that I was talking to one, was.
On me, I am friendly and outgoing to a fault. I'll talk to anyone about anything. I get to know people who others wouldn't think of talking to. People generally don't share their darkest secrets with me. But they will share odd stories.
A lot of people, as far as I know. Private groups are still a direct competitor for the likes of Podio and Yammer, as ridiculous or stupid this may sound...
I work at Facebook. We use Facebook groups heavily for company announcements, discussions, funny posts, help and support, feedback and feedback requests, etc. We use Phabricator for code reviews and other software engineering tasks.
Of course, not everyone uses Phabricator (because not everyone is an engineer or programmer), but I haven't seen anyone not use Facebook. Even the culinary team (for Facebook's cafes) has a few popular Facebook groups.
Honestly, the idea of a facebook subscription is not a new idea, nor is it a feasible idea.
It is something people have discussed on HN about for years now.
Not to mention $10 a month is unrealistic in every developing country where roughly 40% of facebooks users are based (brazil, india, indonesia ...)
I'm shocked Biz Stone made this blog post. His solution is basically to "lose the ads and maybe some special features too" for 10 bucks a month. There is no way that is good enough.
Perhaps what he is really getting at is that Facebook should consider some type of Reddit Gold feature? Where users gain access to beta features first and various perks.
Ads don't bother me that much, really. Between AdBlock and general desensitization to them, they're pretty easy to ignore.
But how much can I pay to never see another update about one of my friends playing any kind of game or app or quiz; to automatically reject and hide any invites to any game or app or quiz; to never get an Event invite ever again, and to never see Upcoming Events in my sidebar; to never see another friend suggestion or Pages You Might Like or Games You Might Like or Music Pages You Might Like; to make my newsfeed show me everything from everyone I choose to view there, in chronological order always, not just what the Computer In The Sky thinks I want to see when I want to see it; to make it stop asking me to dig through my contacts for more friend suggestions?
And if all of those things are possible now, how much can I pay for a simple one-page settings page so I can actually make it happen?
Maybe not $120/yr, but if there were definite improvements to my user experience above and beyond just taking out ads, I'd think about it.
Why should we pay for a commodity like basic communication? The only payment they may deserve is hosting my files and posts. I should be able to set up my own server like email or XMPP. Traditional social networking paradigms are bullshit. I hope identi.ca or Tent succeed.
The TL;DR: "I bet if Facebook got 10% of the subscribers to pay 10 bucks a month for something, they could make a billion in revenue."
The reason why social media bubble exists is that they call people who use the service "subscribers" These people did not outlay anything they would consider meaningful to enter into said "subscription" contract.
Don't assume seeing mom's pictures of your family's cat somehow assumes people are willing to pay for the service.
Unrelated but why hasn't Facebook ever tried to become a payments platform? They certainly have enough users and I'm guessing they'd make a ton of money.
I've always thought this would be their golden goose. It would serve two main purposes: give them a source of revenue (processing fees for their 'Pay with Facebook' button, and additionally get people to save their credit card with FB, converting to a lot more FB credits for games.
I think if implemented there would a massive conflict of interest because those paying for Facebook premium are going to be the individuals advertisers are targeting most, especially if it's $10 per month.
It's essentially saying lets remove all the people with disposable income out of the eye of the advertisers. To me this seems like biting the hand that feeds.
Sounds like an awful idea that might get you short-term revenue, but kill your long-term strategy. You'd be cannibalizing your most profitable advertising asset, asking for money from the people who least want to give it to you (Facebook users) and spurning it from the people who have more of it and are much more interested in giving it to you. (advertisers)
Holy flashback! I was sitting in Sun trying to explain why the next version of NFS could not be a 'pay' version to SunSoft leadership, and then President Ed Zander said "Chuck, look how many people use NFS, if we got $10 for only 10% of the seats out there we'd fund this company on that." To which I replied, "If you charge $10 then 10% of the seats will be 0 since there will be no seats."
This is the paradox of "infrastructure" services. Today the telephone is an amazing thing. But their value is tied up in the network effect (other people have them so you can use them to call). If nobody has a phone, you buying one has little value, if everyone has a phone then you want one because you can talk to everyone you know.
So Facebook is 'cool' when everyone you know has a presence there, it is 'not cool' when you don't know anyone there. Charging a subscription now, is not plausible, people will leave. Instead you need to sell entire groups and then charge them a subscription fee. Fortunately we have a really great example of someone doing exactly that, it was called Yammer. Put everyone in your business on Yammer (it felt like they just changed the CSS assets in the Facebook code, seriously) and increase connectivity and communication in your team. Instant value proposition if everyone in the company is using it. So you sell a subscription to the company and boom, done.
Now if you wanted to create Facebook for Enterprise to compete with Yammer, that might be interesting, and to bake in the notion of "Enterprise" presence and "Non Business" presence into the same user account, that would generate revenue. And if you told people, "if your company signs up for Facebook for Enterprises you're personal account will also be ad free and have these additional features ...." then you can create 'pull' where people actually want to lobby for it inside.
But just doing a subscription model probably won't work.
> Charging a subscription now, is not plausible, people will leave.
From the article:
> For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too.
Biz isn't suggesting a paywall here; he's suggesting a freemium model. I'm not sure people would leave if Facebook merely announced that people could pay $10/month for extra features if they felt like it.
Of course, I have my own concerns about ad-free premium services... it creates a socio-economic divide between those who can afford to avoid advertisements and those who cannot. Not the end of the world, but it gives me pause.
No, this is a pretty bad idea and takes away focus from Facebook's advertising business which in the long term is far more lucrative and has far more potential.
I was incredibly surprised to see that Biz Stone (co-founder of Twitter) wrote this, because it's not just a bad suggestion but it's a bad suggestion without any real depth or analysis.
The hopeful side of me is saying it's an inside joke, because suggesting that someone models a company after Pandora seems like it could only be done in jest; if anything, I think Pandora is an example of how to succeed in technology and fail in commerce.
The cynical side of me is saying that this is linkbait with the purpose to generate clickthrough to Biz's startup, Jelly.
The way I see it, Facebook manages and displays all the content you and your friends provide, so it is nothing without the content providers. There is something really odd about paying for a service so you can look at what your friends' content.. it's an upsetting idea. Sure, a paid subscription is totally optional, but it will still make me (and probably tons of others) queasy to see Facebook asking you to pay if you want to use it better.
I cant believe that this was an article posted by such a successful entrepreneur. This is the type of amateur idea and discussion you would expect from a grade 10 student. He has lost all credibility due to him actually saying (and believes) that 10% of users would pay for this feature.
I've heard this basic idea from all kinds of really successful businesspeople. This idea that there's some minimal level of buy-in (10%, or whatever) that you can just take for granted. It comes up most often when someone is challenging the premise of their idea. "Well if we only get X% it'll still be a win" etc.
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[ 3.6 ms ] story [ 107 ms ] threadAny data to base this assumption on?
Maybe it won't be 10%... but even 1%, 4%, 6% are a solid revenue stream with a user base the size of Facebook's.
However, it's very common for already successful people to think all their ideas are good. Wouldn't you be biased towards your own greatness if you were named 2009 Nerd of the Year by GQ magazine, one of the Most Influential People in The World by TIME, etc?
When you've been told by the world that you're brilliant, it's easy to be seduced by that then go on further to make a horse's ass out of yourself.
Before you trot out their subscription numbers, I should point out that I know quite a few people who have multiple FB accounts for a variety of reasons. That portion goes up substantially when you add people who deliberately got rid of accounts and then created new ones.
Guilds in online games often use FB groups to coordinate. If you want to spy on other guilds, you'll need a different FB account. I've known people with dozens.
People create and abandon accounts. When they later decide that they want to use FB after all, it can be easier to create a new account than remember how to get into the old one.
People often want to hide part of their lives from others. For instance a pre-op transgender person might be part of transgender groups but have family who they have not discussed their plans with. Having multiple FB accounts is a way to separate these parts of their life.
People create accounts to use as sock puppets for online arguments.
That said, I also think that people open up to me a surprising amount because I'm willing to talk and listen. You never know what stories you'll hear.
For example after 9/11 I had some interesting conversations with a woman who had been a minor princess there before the Russian invasion. She was the janitor who cleaned up the office I worked at at night. I believe that I was the only person in my company who was aware of her personal history.
Stop and think about that. I bet that you've seen a lot of people with interesting histories that you know nothing about.
It might also be your demeanor. People seem to know who to trust through the little things. Do you act differently than most of the guys you're around with? Less judgmental, more ears than mouth? People confided in personal stories, but nothing close to the 9/11 janitor staff. Ever heard of ABM?
She was a minor princess in Afghanistan back in the 1970s. Not a Russian one. Having a princess from then still alive was not surprising. Realizing that I was talking to one, was.
On me, I am friendly and outgoing to a fault. I'll talk to anyone about anything. I get to know people who others wouldn't think of talking to. People generally don't share their darkest secrets with me. But they will share odd stories.
Thanks again for sharing this. It's been fun.
Who uses Facebook for internal company communication?
http://phabricator.org/
Of course, not everyone uses Phabricator (because not everyone is an engineer or programmer), but I haven't seen anyone not use Facebook. Even the culinary team (for Facebook's cafes) has a few popular Facebook groups.
I'm going to go sell rocks at a concert for $1m a pop. The concert is 100,000 people, if even 0.01% pays for them, I'm rich!
http://en.wikipedia.org/wiki/Pet_Rock
Perhaps what he is really getting at is that Facebook should consider some type of Reddit Gold feature? Where users gain access to beta features first and various perks.
Now that, would be interesting.
Personally, I wouldn't pay 10$, but 5$ I would. No ads, with an extra feature, such as, voice to phone number communication.
But how much can I pay to never see another update about one of my friends playing any kind of game or app or quiz; to automatically reject and hide any invites to any game or app or quiz; to never get an Event invite ever again, and to never see Upcoming Events in my sidebar; to never see another friend suggestion or Pages You Might Like or Games You Might Like or Music Pages You Might Like; to make my newsfeed show me everything from everyone I choose to view there, in chronological order always, not just what the Computer In The Sky thinks I want to see when I want to see it; to make it stop asking me to dig through my contacts for more friend suggestions?
And if all of those things are possible now, how much can I pay for a simple one-page settings page so I can actually make it happen?
Maybe not $120/yr, but if there were definite improvements to my user experience above and beyond just taking out ads, I'd think about it.
The reason why social media bubble exists is that they call people who use the service "subscribers" These people did not outlay anything they would consider meaningful to enter into said "subscription" contract.
Don't assume seeing mom's pictures of your family's cat somehow assumes people are willing to pay for the service.
source for anecdote: app.net.
This is the paradox of "infrastructure" services. Today the telephone is an amazing thing. But their value is tied up in the network effect (other people have them so you can use them to call). If nobody has a phone, you buying one has little value, if everyone has a phone then you want one because you can talk to everyone you know.
So Facebook is 'cool' when everyone you know has a presence there, it is 'not cool' when you don't know anyone there. Charging a subscription now, is not plausible, people will leave. Instead you need to sell entire groups and then charge them a subscription fee. Fortunately we have a really great example of someone doing exactly that, it was called Yammer. Put everyone in your business on Yammer (it felt like they just changed the CSS assets in the Facebook code, seriously) and increase connectivity and communication in your team. Instant value proposition if everyone in the company is using it. So you sell a subscription to the company and boom, done.
Now if you wanted to create Facebook for Enterprise to compete with Yammer, that might be interesting, and to bake in the notion of "Enterprise" presence and "Non Business" presence into the same user account, that would generate revenue. And if you told people, "if your company signs up for Facebook for Enterprises you're personal account will also be ad free and have these additional features ...." then you can create 'pull' where people actually want to lobby for it inside.
But just doing a subscription model probably won't work.
From the article:
> For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too.
Biz isn't suggesting a paywall here; he's suggesting a freemium model. I'm not sure people would leave if Facebook merely announced that people could pay $10/month for extra features if they felt like it.
Of course, I have my own concerns about ad-free premium services... it creates a socio-economic divide between those who can afford to avoid advertisements and those who cannot. Not the end of the world, but it gives me pause.
The hopeful side of me is saying it's an inside joke, because suggesting that someone models a company after Pandora seems like it could only be done in jest; if anything, I think Pandora is an example of how to succeed in technology and fail in commerce.
The cynical side of me is saying that this is linkbait with the purpose to generate clickthrough to Biz's startup, Jelly.
I'm glad Tolstoy is not around anymore and is not able to post on Medium as it would surely turn out to be bad.