are you the customer or the product

[kaigou]

[Note: get a drink and have a seat. This is almost up to my usual levels of longwindedness, but this time, I do have a point! Other than the one on the top of my head.]

I came across an insightful comment the other day while researching, and the comment resonated with me strongly in light of the requirements compiling I was tackling at the same time.

"If you're not paying for it, you're not the customer; you're the product being sold." -- blue_beetle

Think about that for a bit, but first I want to run past everyone some of the thoughts bouncing in my head as a result of researching Delicious, Diigo, Pinboard, and various other (past and present) bookmarking applications. One particular journal entry (from 2008) compares Delicious and Diigo, though I'll rephrase some of the author's conclusions, since I think he got his main summary backwards. Here's the basis of his argument, thought:

Delicious, an original web 2.0 company, still has “user-generated” as its core raison d’être. Diigo has the later-stage web 2.0 philosophy of being a “social network”.

In essence (and to undo the backwards of his summary): Delicious is grounded in using content to find users, while Diigo emphasizes using users to find content. Somehow, I'm not surprised that so far, of the folks replying to my informal poll, that most of you have indicated that you follow the content and then, as a secondary step, discover like-minded users -- seeing how many of you have said you preferred old!delicious and don't like or care for the diigo approach.

Granted, these two things (users, content) are intertwined: you find a tag you want to follow, you start seeing the same names pop up, you realize the same people are marking things you're also liking, and you may switch your focus from the tag to the user, in hopes they'll lead you to even better stuff.

Here's the crux, though: what is the actual product?

This shit ain't free, y'know. Servers and storage and developers and designers don't just grow on trees. It's got to be paid for, either in cash or in kind or in stock or in some way, but usually cash since most landlords & mortgage companies don't accept vegetables, these days. If you see a product that you can consume, and it's free, someone paid for it. Maybe not you, but someone: NSTaaFL, after all.

In Delicious, and other user-generated-content sites, I'd argue the product is the content. If everyone posting on Livejournal, Dreamwidth, Wordpress, Blogspot, or any other journaling app were to summarily stop posting... the affected app would pretty much be rendered useless. In other words: if what draws people to your site is content, then it's not much different from, say, a three-author fanfic or fanart archive. Those three authors are limited (being only three people), but wow, between them, they've got hundreds of stories or art pieces or filk or whatever. The extent of their content overshadows any issue of the number of users. We go to those sites to immerse ourselves in content, not to be inundated by a bazillion users. (Not to say it's not a benefit if there are a bazillion users, just that if the users drop off, the content remains our primary lure.)

Diigo, however, appears to be following the later-model 2.0 path a la Facebook, or Google+, or even social sites like LinkedIn or SpiceWorks. They all allow free use. In the case of Spiceworks or Google+, they may even tell you outright that they're not going to be charging -- even ever -- for you to use their social site, err, service.

Let me step back here, to the days when I first found an investor, wrote a business plan, and opened a bookstore. It's really simple to write a business plan, for the most part. You show your overhead -- rent, insurance -- and your expenses -- materials, time, the cost of goods sold -- and your intended/hoped-for intake -- the cash you get for what you've sold. All business plans are a certain amount of fudging because it's damn hard to know ahead of time whether what you're selling is what people want, or even if they'll pay what you're asking, but you can usually get somewhat close to reality, give or take a bit.

Fast-forward to when I watched the world explode with the dot-com boom. Business after business after business, I saw some of those business plans, and many of them amounted to nothing more than: "If we build it, they'll come." Then what? How much do you actually make? How do you even know they'll come? (And who are 'they', anyway?) Add in the absolutely ludicrous concept -- still ongoing -- that online ads will actually create and/or increase sales (and this was in the days before 99% of the 'net had developed banner-blindness!) and I was, and remain, baffled as to who could be bamboozled into thinking any of this was a solid business plan. It's like that old joke:

1. Build it.
2. --stuff happens--
3. Count your profits!

The simple fact is that money makes money, and it's not a business unless you have something to sell. So the question I'm always asking is: if the service (read: social network) is free, then what's being sold?

The answer, dear reader, is us.

We are the product. Facebook, as the current presiding daddy of 'em all, doesn't really care if you post long and involved substantive content. Hell, it barely gave you 255 characters for most of its existence. Twitter gives you what, 140? It's purely a byproduct, I'd argue, for Facebook to claim copyright on all pictures you post; they're just being opportunistic. What they really want is foot traffic. Three users and five hundred pages of content would be a complete fail for this business model... but five hundred users and only three pages of content would be a success. Because the more users, the more there is to sell to advertisers.

Here's how the basic business model works: advertisers pay for a venue in which they're guaranteed a captive audience of X number of eyeballs. Okay, then, we just need to come up with a service that will captivate at least X number of eyeballs, for long enough to register their visit and count it as a hit. Content is a plus, because that does get users to come back repeatedly, but the hits are what we really want. That's how we make money.

What happens? You get microblogging... because this means you must check the site, and re-check the site, to see the latest, as often as possible. Every time you return, that's a hit to the site. The number clocks up one more, and the advertisers are thus convinced they're getting their money's worth. That means you don't want long and involved posts -- those keep people on the same page, for a long period of time, and it also means things can slow down, which means users might only check in once a day, maybe every few days, maybe even only once a week. Nooooo. You want users coming back again, and again, and again, so you want things to move really, really fast, so the users have to come back repeatedly just to keep up with it. And you do that by making sure that no one can be around (speak/post) very much at once. Quick, fast, get-in, get-out, but what you're really doing is teaching people to return repeatedly, check over and over, and increasing the number of hits to your site.

This isn't to say that the service provided is unwanted, or that we're all suckers for checking Twitter every five minutes. If users didn't want a service, they wouldn't use it, and obviously (as the dot-com bust taught us, though not everyone learned that lesson judging from some sites) just because you built it doesn't mean everyone's coming to your party (let alone bringing cash).

The other half of this coin are the advertisers. They're not exactly altruistic. It's true there's been no major, long-term studies (that I've seen) that verifies absolutely that online advertisements really work (especially, again, with that whole banner-blindness people have inculcated). But one truth in business is that hope does spring eternal, and even if it's only one in a hundred people will click on your link, that's still a lot of people if it's a total of a bazillion people walking by. It's the online version of the mantra, "location, location, location". (Which, by the way, is absolutely true... as far as brickfront businesses go.)

Here's the catch, though: the economy. When times are flush, you can figure the average middle-class or even working-class person has a little extra money, and they're not so adverse to spending it on things other than food, rent, the necessities. The banner-blindness won't be so severe, because the user isn't being austere. Advertisers may still be working on the 1-in-100 actual clicks, but hey, there's a bazillion people passing by. When times are bad, though, only the top-most tier is going to continue to be flush. The rest of us are having a hard enough time just with the basics. We may make up 97% of the online traffic, but our actual buying power has dropped considerably, almost precipitously. Suddenly, the numbers would be more accurately represented as 1-in-1000, if not an even greater proportion.

Which is fine! ...so long as you're advertising on a site with a bazillion people. If you're not, if your site has lower traffic overall (three users, lots of content), you're not going to be able to offset the reduced spending overall with enough numbers. That's why Facebook can continue to be flush, since it does have the bazillion eyeballs every few minutes, to keep the numbers dramatically high. It's also why Facebook keeps redesigning itself to smash up against any competitors like Google+, so it doesn't lose those numbers. Any other site -- *cough*livejournal*cough* -- that uses advertising to bolster its income is probably going to find itself losing revenue, as advertisers shy away from it.

(Tangentially: this is why Google's AdSense is so popular amongst advertisers and site owners. It compresses a whole bunch of small, low-traffic sites, into behemoths that combined can provide a bazillion eyeballs, which in turn makes them -- as a group -- attractive to advertisers, who just want the damn numbers.)

Speaking of Livejournal, this is where you get into the latter-day model of the dot-com: the blend. This is the model you also see on Diigo, on Linkedin. There's a free level, where you're going to see lots of ads, and there's the paid models, which give you a few more benefits but with no ads. Instead of a system like Dreamwidth, where the paying customers are (hopefully) enough to offset the greatly-more free users, the ads are supposed to pay for the free users, and the paying customers are enough to pay only for themselves. Basically, this kind of blend is hedging its bets on advertising being enough to pay for everything -- plus, in some cases, the application is something that's enough of a useful, or valuable, service that a decent chunk of people would pay for it.

[ETA: Technically, Linkedin is doing a variation on this, in that its ads are from its own users, such as companies and recruiters seeking employees from among the Linkedin user-group. So, still ads, but not the usual Facebook annoyance kind, being more Linkedin-related.]

There's another kind of blend, which is really just Facebook on steroids, as typified by Spiceworks. That company creates software for network management -- but the software is always free. Businesses are installing it, running it on internal servers and whatnot, but they're getting advertisements. Inside their company. Right: at your desk, at work, you're seeing ads. Talk about a captive audience -- it's your freaking job and you've still got to keep on those banner blinders.

But Spiceworks isn't entirely just free software bolstered by ads; it's also a social network. It's a big honking, complex, multi-layered BBS/forum, where people from across the IT industry can chat, provide help, ask questions, even look for jobs. And that part, also, is completely free, and Spiceworks is determined to keep it so. Again, the catch, as buried in an article from eCommerce Times:

Specifically, Spiceworks is beginning to harvest activity data from its growing population of users to produce interesting benchmark statistics that can help its customers better understand industry best practices.

Reread. Spiceworks is culling data (creating a product) from its "population of users" (product-producers) ... to help its customers. Customers? Who are these customers? Are they not the same as the users?

If Facebook, Livejournal, and the rest are any sign, the answer is No. The users are the product. Including a social network independent of the software just boosts the foot traffic, which in turn boosts the data collection.

And that's where we go beyond the simple realm of advertisers who want X number of eyeballs per minute... and into how we, ourselves, become the product. We're not longer being touted as foot traffic, with vague numbers waved about of how many of us might be expected to buy. It might not even matter anymore, really, whether we buy anything -- because we, ourselves, are the product. Spiceworks, like Facebook, is no longer selling eyeballs. It's selling data. It's selling our data.

Think of it like this: the problem with chanting the mantra, "location, location, location" is that the first step is therefore to figure out what's a good location. You can't just randomly plunk your finger on a map and think that's good enough, and for that matter, just driving around and seeing a place for rent might not even work. You need context. What other businesses are nearby? You need to know your own business: is it destination (like a car dealership), or is it mostly impulse/browsing (like a bookstore)? If you're a drop-in kind of brickfront, then you may benefit from being near businesses that get intentional visitors -- or you may benefit more from being around ten other businesses that also welcome foot-traffic, so you could snag some of that meandering foot traffic, too. This is the reason why mall square footage and downtown pedestrian shopping areas are so damn expensive.

All that is data. Where do the people go? What catches their eye? Which businesses do they return to? What do they tell their friends about? What attracts them, what repels them? And so on... and every time you "like" something on Facebook, or share something on reddit or digg or stumbleupon or google+ or whatever, you're being recorded, somewhere, as one more number that likes this, responds to that, and pushes along the viral trends. And if you're a company, a website, that can gather massive amounts of this information, then you are a company with some serious power: because you are the one who gets to tell other companies where the best locations are.

And when you consider how pervasive the stupid little thumbs-up "like" button is on sites all over the freaking web, you realize that Facebook isn't just tracking you as a user, on Facebook itself. It's following you everywhere -- and with Facebook, now, you don't even have to be a member. For that matter, Google's tracking you, too, and plenty of others are coming up along behind them. They're reading your cookies from other sites, seeing where you went and what you read and what you clicked on, and they're turning it into reams of data and they're selling you.

Let's consider the alternate model, of which Dreamwidth is one example. It's a purer model; I'd call Linkedin, Livejournal, Flickr, and Diigo straddlers, seeing how they have low-level with ads and subscription-levels without ads (and with increased features). But Dreamwidth is one of the few I can think of, off the top of my head, that doesn't blast you with ads even when it's free.

Again, the question is: if you're getting it for free, who's paying for it? Easy, this time: it's the rest of us. We who are paid subscribers are (hopefully) generating enough income that Dreamwidth can afford to let the rest of you tag along. It's the same model Livejournal started with.

Here's the catch, though -- and why, I'd argue, Dreamwidth must stick to the original 2.0 model, and not move to the late-model 2.0 -- the application must provide content. Lots and lots of content. Sure, you could argue semantics and say we're still the product -- or at least, we're the product-producers -- but the key here is that we are also the consumers. In a sense, we're "paying" for our use by "producing" goods-in-kind. Vegetables, or content, we're trading our production for the benefit of accessing everyone else's production.

The foundation, and possibly IMO the most important detail of this, is that it creates a symbiotic situation. Let's be optimistic and say that roughly 25% of your subscribers pay. That means 75% are getting a free ride... but not really. They're producing. More cynically, you could say that the paying users are the consumers of the non-paying users (as we also consume ourselves, and each paying-other, which is kinda gross when you think about it, but whatever). It's symbiotic: there aren't enough paying users to create enough content to make it worth paying for, so we need the non-paying, high-content-producing users to create the bulk of the value. Sounds crazy, but it works, and Dreamwidth (and, I'd say, Fanfiction.net) is proof.

That's why a business in this model absolutely can not risk losing its non-paying content-producers. Think back to when Livejournal started cutting back on its basic plan: basic users started losing various benefits and extras, while gaining the disruptive and annoying and pervasive ads, and the bait-and-switch continued up through the levels, a little at a time. That change in the weather happened after a series of Livejournal fiascoes that alienated, then outright drove off, huge chunks of its most dedicated (and oftentimes paying) customers. And in case it's not obvious, I'm talking about fandom.

So the free users left, because they weren't welcomed, and the paying customers left because (a) the content they wanted went elsewhere, and (b) the lack of content made the service less valuable, thus (c) the paying users voted their disapproval by not paying.

Thus we get the need for ads, to compensate for the fact that the service lost its original path -- where content is the value. Livejournal had swung wildly off the side of the mountain and was now careening top-speed into a rock-bottom ravine.

As a note, this isn't to say that Livejournal is dying. It's just to explicate that it can become a vicious cycle: losing your content means you rely more on advertisers, and that means needing to reach bigger numbers of people, which means caring less about content because you just want foot traffic, so you start casting off the questionable or marginal content-makers, and trying to encourage more quick-hits kind of traffic... which, by the way, was probably the basis for Livejournal's catastrophic attempt to link itself with Facebook. It had lost enough content that it needed to compensate by creating revenue by, bluntly, selling its users.

Now, the thing about an application where content is king... is that you do not want people coming by for only a second and leaving again. Those numbers mean next to little to you -- in fact, they're a sign you don't have enough content to keep people occupied on your site.

Think about when you're shopping. Maybe you need new shoes. You walk into a store, you glance around, you see nothing that jumps out at you, and you leave. Well, so much for browsing. Any chance of a last-minute sale by the register is gone. Hell, any chance of you just being a warm body -- to make the store look "occupied" -- is also gone. I'm not kidding; one reason for foot traffic's value is that people unfamiliar with your store are still more likely to come in and browse if they see lots of people inside. They assume that "lots of customers" means you have something worth buying. It's popular, ergo, let's spend.

So you want people to come to the site, and stay there awhile. Produce stuff -- comments, posts, polls, whatever. In a shop, we get this just by having lots of people in the aisles, which brings in more people. One in ten might buy, so if you can get fifty through the door, that's clearly better than just five people who leave without buying at all. On a site, no bodies, so we have to look for their footprints: their comments, replies, posts, shares, photosets, links, etc.

The more content that's produced, the more we users see its hosting site as valuable, and the more likely we are to be willing to pay for that content. It's not like the average person really wants, or needs, or even cares, about things like other users' data, any more than we'd walk into a car dealership with the sole purpose of finding out what's the most popular car this year. We might be curious as part of the process of buying a car, but ultimately we are in the dealership to look at cars -- the product (content) itself. Knowing which one is popular is just a nice by-product. Other people's data is the same. It's a by-product. Without the actual product/content, it's worthless -- would you walk into an empty warehouse, sans cars, just to find out what car is popular?

Alright, now let's get back to Delicious before I end up keeping all y'all here all night. Originally, Delicious was classic 2.0 -- the content (links) were user-produced, and the focus was pretty strongly on managing those links, finding those links, finding new links. Finding other users was a by-product, and it wasn't immediately easy. It just wasn't the app's true focus. I've read several post-Yahoo-buyout articles that critique the Yahoo purchase, and the fact that Yahoo ended up ditching the app.

Why? Because Yahoo wanted its own Facebook. It wanted numbers... but Delicious was all about content. Now, I won't argue that it's damn hard to monetize a content-producing application if you went around insisting to everyone that you never would -- erm, correct me if I'm wrong, but wasn't the original Delicious completely free? -- but I don't think it's impossible, Dreamwidth being a very good example (along with Flickr) of how you can do it, and quite successfully. But Yahoo kept Flickr and ditched Delicious, and I think it's because the monetization wasn't there.

This part, I'm just guessing, but it seems logical to me: Yahoo took the same wrong turn as Livejournal.

They assumed the content produced was valueless.

Look, a lot of people in the world see fandom as a little kooky, if not downright scary when we start slogging it out in shipping wars. We're obsessing about television shows, for crying out loud, or bands, or movies, or books that fell into the public domain a hundred years ago. We're posting pictures of people that don't exist, or arguing over the characteristics of someone at forty who was eleven in the original series. I can't really blame someone on the outside for not taking us seriously. We are a little scary when we buttonhole people about why, exactly, the dialogue in our favorite show is just like billiards.

Delicious was all that, dialed up to eleven: because it's not even 'our' content. It's links. It's a whole bunch of bookmarks, like we've just collectively dumped our Firefox or Safari or Opera or IE bookmarks into a shared database. Hell, Google's bots gather up the same amount on a daily basis, and they don't even require we hairless monkeys at the keyboard. The Delicious users were just librarians, tagging and cataloging books other people wrote (produced), so... I can see Yahoo thinking, this isn't really content. It's all meta. It's content, kind of, about content. And a lot of it's pr0n, for that matter. Uhm. What do we do with this?

In other words, like Livejournal (more intentionally, I'd say, but still, end result the same), Yahoo saw the content-producers as being of no value, and had no comprehension of the value to the consumers themselves. What the fans produced -- created and consumed -- was devalued because fandom itself was devalued.

And when you remove the fans from the mix, as though they don't count at all... you get, well, nothing.

And if you take that nothing, and you then try to rearrange it so it'll be monetized in the Facebook style -- where the users themselves are the value -- then two things happen. One, you want even less of those kooky fandom folks with their crazy pr0n obsessions, because they scare advertisers and you can't predict what'll make fans happy, anyway. Two, you've completely wrecked the app's entire raison-d'etre -- and fans, as the Pinboard google docs have shown -- do not just get annoyed, they walk, and they make a lot of noise as they walk. And if you ask them to talk, be prepared for the deluge... and if you then do not listen, be prepared for the apocalypse. (Fanopalypse?)

Okay. Ignoring that Livejournal and Yahoo don't value fandom's content-contribution, and the new Delicious can't seem to figure out how to retain the users while still mining them for all the data it can, the only option may be to follow Dreamwidth's route through the post-dot-com haze. That is, to recognize that the only ones who truly value fandom-produced content are the fans, and to embrace the model wherein those of us who can pay, do, and those can't, help produce. And then do that whole symbiotic content-production happiness, except being fandom, we'll find a way to vid it, or filk it, or maybe we'll just link to it -- repeatedly, and en masse -- and screw up all those Facebook data crunchers.

And we won't be sold by anyone, or sell ourselves to anyone.

More thoughts later. For now, it's your turn.

Comments

[thejeopardymaze]

I sympathize, but after seeing what happens to coops and indies all too often by founders with similar values, I am not entirely optimistic. But if the business plan is very well thought out, it might not be a bad thing to give it a try.

One of the things that bugs me about some of the indies around where I live is the attitude, as though you should be grateful just for shopping there or ordering coffee (it's worse than I'm describing, actually). A focus on great customer service should be one of the top priorities, especially a lack of presumption that people are using a service or product for the same reason it was created or the owner/s use it. Some people just want a cup of coffee/bookmarklet service that retains data/etc. I'll think of some other things, and you can feel free to message me.

[kaigou]

The problem is that the online world can only be an analogue to the offline world to a certain extent; past that, it breaks down. So the issue of indies... well, we could probably say Dreamwidth is that, and here we both are. For that matter, a lot of the really big names, now, were once the equivalent of online indies: flickr, linkedin, photobucket, even facebook. Not all of them go the way of delicious.

The key is always the business plan, and there, I don't think it's a matter of whether it's an indie. Seems to me that your complaint is more about the attitude. As someone who owned an indie bookstore, and was surrounded by equally offbeat indie shops, I never ran into that attitude. I did plenty, in the big city, or the bigger college towns, and it turned me off, as well. Or maybe I just never saw myself as cool enough to carry off handing that attitude to anyone else. I was too acutely aware that I very much needed customers who, y'know, give me cash.

Online, though, the business plan is a little more wacky, because how do you rank the value of something that's barely had, oh, a generation, at most, to become something of value to anyone? It's not like with books, where you have hundreds of years of bookstores to know that people value books. Yet you can still come up with a business plan that consists of more than just four powerpoint slides and the obsessive idealism that if you build it, people will just show up with loads of cash.

Really, the key is in crunching the numbers -- based on expenses, and reasonable expectation of cost-of-purchase for paying users -- and determining where the breakeven point is. If it's too high -- if it'd take 50% of your users paying, to be able to carry the other 50% of non-paying, I don't know. Seems to me that's asking too much, at least at first. But then, I'm also a brickfront kind of business person. I still laugh when I see dot-com business plans that expect to make a profit in ten years. What? My investor would've thrown me out if I hadn't shown a profit inside of three. Sheesh.

It's not purely about attitude, at least towards customers

[thejeopardymaze]

Let's just say some people tend to ignore the fact that there is a difference between being involved in a subculture, and running a business, and no matter what direction they take they can't escape the realities of capitalism, which can lead to serious mistakes. Which, for many reasons, does make me wonder if I myself can be entirely ethical in regards to my own plans...


It's not like with books, where you have hundreds of years of bookstores to know that people value books.

Physical verses data copies? I got some interesting news about a recent B&N closure in my area, and for foolish reasons fans of a local indie store are celebrating. I'll post about it when time permits.

Personally it's not that I'm unwilling to pay, it just better have a lot of great features if its just a bookmarking service. I already pay monthly for Evernote and some other services, and a bookmarking service is competition for money from other services. Maybe a sliding scale option would work, or something.

[kaigou]

First, there is no distinction for me between physical versus data. They're both books. People have been buying them in one form or another for four hundred something years. They're a stable and proven form of business, even if the format and brickfront is different, the game's still mostly the same.

I think the key here is that you're talking to someone who is far more a capitalist than a cultural outsider, so I find the entire issue of attitude and subculture to be entirely academic. For me, they're not part of business. Either you have a service or product that people are willing to pay for at a price that intersects with the price you're willing to sell at... or you don't. Period. The rest is trappings.

[qem_chibati]

I'm thinking a lot of some of the free to play games that are out there, where content is a hook to have people pay. And people pay a lot for the ability to customize and look pretty or convience such as moving/leveling faster, or elite status over others. Socialising brings more players and makes existing ones want to play more which makes payment a more worthwhile feature. But I have to wonder where how you can bring in that break down of additional services.

Aarinfantasy is purely donation and gives a thank you to donators with a larger icon and flashy status symbol. You can also store slightly more features.
 
Diiago has better search for paid users, inboard has archive features, a service I am thinking of is planning on making it pay for inbuilt collaboration features and the ability to use it for things outside it's original market. (the major content it provides is free and will always be free)

On adverts, I actually don't mind ads, unless they are aggressive, lj current ads are so obnoxious that thy can make the site unfunctional for me. Perhaps that is part of banner blindness although some people use advertisements as a way of name brand recognition. The more you see that brand the ore likely you will eventually try it out.

[qem_chibati]

Hmm, some games also force heavy users to pay to increase allowance of some features, e.g friends list to increase from 50 to 100

I think it is important for any business with partical free/pay for content to decide what is billable and what isn't. Taking features away only leads to resentment, and confusion for those supporting, to accurately give information -which undermines and reduces credibility.

It's also part of ensuring stability with what you can and can't support.

[kaigou]

Taking features away only leads to resentment, and confusion for those supporting, to accurately give information -which undermines and reduces credibility.

Righto. Which is why I say Dreamwidth can't afford to change its gameplan, judging by the mistakes of LJ and Delicious. You're contradicting your mission (of a sort) when you suddenly do a bait-and-switch. Thing is, it's like many sites rely on advertising as the money-making fallback, but I have no idea if this is because adding new features is prohibitively expensive compared to what you'd get in user payments. Maybe?

But once you get into gamification, well, that's a whole 'nother ballgame, err, so to speak. I personally am not that crazy about gamifying things, but that's mostly because I work on the corporate side and have seen it used as a gimmick, where it's not truly the heart of the matter. I have no idea how you'd gamify a linking site, but I'm sure someone would come up with a version (if they haven't already)... and it'd probably suck, if done wrong.

[qem_chibati]

Well I was thinking more of - you have limits on particular resources that cost you to prevent them from being abused and taking down the whole site. But increasing those features is relatively easy, rather than making it a game.

Encouraging people to donate for "status" is also another simple thing to do, by highlighting those accounts as special and granting grater aesthetic control. Eg animated icons possible with a larger icon size limit, an 20x instead of 00x to stand out.(Aarin example)

[qem_chibati]

Bloody Mac mobile device products. :(

100x and 120x

So for example subs riptions to threads and external posts is a limited but pay to expand feature on dw.

Games are things people make up themselves any way with things like delicious. (most bookmarks on this resource, first to bookmark popular ones, I've seen people take it way too seriously before.)

[kaigou]

ahahaha FIRST REPLY!

I hate that. I really do





...mostly because I'm never fast enough to get to be the first reply.

[qem_chibati]

Also from experience new features that actually make a significant difference can be cost prohibitive (but also never afding new content can lose you people as they decide that some one else does it better/boredom. You generally can't completely ignore the free base that produces content either.)

[kaigou]

In the case of applications where the content is user-generated, that's what I meant by where LJ went really wrong: they started abrogating those users who were content-generators. That's pretty much doing what you're warning about: they reduced the content.

In a way, I see content-producing sites as self-fulfulling. If we get bored with what we're producing, we just produce something different. Like here, frex. If I get tired of one fandom, I just start writing about a different one, and now there's even more content (and more varied, at that) for others to consume.

[cimorene]

I think the some-users-paying-for-the-rest model looks... likely. I mean, that we-the-fandom should give it a try. From my admittedly un-knowledgeable viewpoint, that is.

I think we've definitely seen, from Pinboard and from the discussion posts, that fandom is full of people who are willing, even eager to pay for the service. And I think for many of us who balk at using Pinboard because of its lack of free option, it's because part of the content we want is the very large pool of fandom bookmarkers and we know that many of them can't afford to pay for the service, but we want to use their bookmarks and the bookmarks of, well, everybody who is willing to pay, together. I guess in this model the free users are the content and the paid users are the consumers, except that the value of the social network is in the interrelationships of everybody's accounts.

[kaigou]

Bingo!

I think that's what Diigo is trying to achieve, and might have, except that (a) its focus is on users, not content [notice which is easier to find/track], and (b) it's definitely made itself an unwelcoming place with its emphasis on NSFW stuff being shoved all the way to the back. Granted, it's not like the entirety of fandom goes around collecting pr0n-links (well, uhm, does 98% count as 'entirety'? heh) but still, it's a contagious kind of treatment. Getting tarred with the same brush, that is, to mix myself some metaphors.

The thing is, I think Dreamwidth itself is a proven test-case on whether fandom can create something -- that people will pay to use -- and yet also support its non-paying members.

[grey_sam]

When I first read the quote "If you're not paying for it, you're not the customer; you're the product being sold." -- blue_beetle, it was the one that stuck.

It brings it straight to the bottom line. Money.

How to be fiscally viable, without encroaching upon the usability/ethos which made old!delicious invaluable for fandom (whether or not you were actually a member of delicious), with fandom being the yup-we're-in-from-the-outset majority user-base of a potential new bookmarking site.

1. “Delicious is grounded in using content to find users, while Diigo emphasizes using users to find content.”

Agreed. New!delicious reverses its old function, with AVOS' business plan focused upon their users being the product. A product needing to follow trends, through the 'discovering yourself' model; yet in a tragi-comedic paradox, being lumbered with its own old!delicious user-base: said user-base presenting as the antithesis to the new model i.e. subject loyal, content happy, and 'old' in comparison to other social sites. Oops.

For AVOS' model to succeed, the old!delicious user-base must be replaced - or sufficiently proportionately subsumed - by newly attracted youngsters who are eager to switch-and-switch again, fulfilling the trending model, as new concepts, hormonal changes, and social interactions induce multiple waxing and waning of interests, expressed through online delving into subject, hobby and novelty matter.

Those who have already experienced these delights, and have settled, or semi-settled, into their long-term work/hobby/study areas, are by definition the been-there-done-that crowd, are no longer the product, and could be considered detrimental to the business plan.


2. Fandom is grounded in content. Always has been.

Fiction. Art. Discussion. As time passes, individuals' interests within fandom may change, but that which captivated initially, tends to remain. Fandom remains.

In a recent exchange of views (forget where, didn't bookmark it) there were allusions to fandom's Great Delicious Outcry vs. fandom existence being only attributable to the web and its software. i.e. take away the techie bits, and fandom itself would dissipate. It would all go away. The arguments seemed sound, but the conclusions were awry. Why? Because without an understanding of fandom and its history, those discussions were missing critical points.

Fandom was around long, long before the web. In essence, it was the same then, as it is now.

Way-back-when, there were pen and paper submissions to zines and newsletters, volunteer editing conducted through the post, knackered typewriters turning handwritten scrawl into text-on-paper, charity raffles, competitions, ancient duplicating machines, collating and stapling, mailing lists, conventions.... the processes were just streamlined with the arrival of the personal computer (big round of applause for the the Amstrad PCW 8256/8512) and then, finally, the web. What took months of collaboration in the Dark Ages, takes minutes today.

My point is simple.

Fandom... is.

That's a constant.

Constants bring big smiles to business faces.

Yet this one passes them by. Endlessly. Delicious/AVOS/Yahoo/pretty much the whole web minus Pinboard, don't appear to have the slightest understanding of this, never mind what makes fandom tick - so they keep throwing it away. They don't get it.

Fandom is a creative, producing entity. Has been, is, will be.


3. Funding methods for new site - Generated Advertising/Content/Users/Subscription (for those who can).

There might be another.

Take a look at fandom. Not fragmented into the individual participant, but taking the entity as a whole. The sum of the parts. This 'whole' comprises a very large number of people, swathing across the demographic board. It spends money. It purchases staggering quantities of bread, milk, tea, socks, towels, notebooks, light bulbs, toiletries, newspapers, magazine subscriptions, birthday/christmas cards and presents - unless it's making them of course, in which case it's buying circuit boards, printer ink, paper, wool, clay, wood, sandpaper, nuts, bolts, wire and paint... it buys books and dvds... deals with busted washing machines, worn-out jeans, cracked laptops, dodgy hard drives, exploding tvs, dead DVD players, flat tyres, dirty floors, broken windows and collapsed sofas. Same as everyone else.

Affiliates.

Fandom is a whole. Whether you read, write, draw or discuss, prefer gen or het or slash, low or high ratings, there's generally a niche within it that fits you. You need help, you ask, and up pop some people with answers. People say 'thank you,' a lot, and as maciej of pinboard relates "...if you actually fix something someone might knit you a sweater." Or a give you a picture, some desktop wallpaper, embroider a portrait, or gift you a story.

Fandom already has loyalty. It doesn't need a brand name or a brand identity. In fact, it's been branded as far too many things already.

Business and altruism are usually at odds. It's going to take money (business) to bring this project to reality, and money to keep it going, but without altruism, fandom walks.

"If you're not paying for it, you're not the customer; you're the product being sold." -- blue_beetle

What about a third possibility, where the fan is neither the customer, nor the product. Where the routine economic power of fandom en-masse might potentially be harnessed into a method of deriving an additional income stream for the project, at no direct cost to the individual fan.

Say a fan buys a second-hand book online. Through their usual source e.g. Powells, Alibris. It costs them a fiver. Buy it through the project site, by clicking the appropriate affiliate link on a dedicated affiliates' page and it still costs the fan a fiver to buy the old book... only now 5-7.5% of the purchase price will come back to the site. The most popular online shopping destinations have smaller % returns e.g. Amazon, Play.com, with the balance being an increased fandom use.

So, take a guess, just how many little online purchases/annum does fandom make?

Is it feasible?

[kaigou]

What I really wish were feasible were shared ownership -- that is, it's feasible but still not possible -- because it's not legal. Not sure if you're aware; it's called crowdfunding, I believe. That's where instead of donating, say, $50 and you get a nice t-shirt for it or a thank-you note, you get a share or part-ownership. A big online co-op... and it's currently illegal in the US (where I'm a resident, so that's the jurisdiction I know). It has something to do with SEC rules (based on preventing certain types of scams, I think, I'm kinda fuzzy on the exact details), so it's not allowed. There are various groups trying to get the FDIC/SEC to change their ways to allow crowdfunding, especially based on the success of crowdraising and crowdsourcing (which is effectively low-key, online-only, mass-but-low-amount fundraising -- like the indie...something site, argh, can't recall. The one where you can donate just $5, $10, little bits and pieces.) Even that, IIRC, is limited. I think there's also some issue of donations over a certain amount. (It also has to do with the fact that we're not talking about a nonprofit here, although there's no reason it couldn't be run as one.)

I need to sit down and crunch the numbers, but that really means sitting down and figuring out which features would be premium, and seeing if I can't find some numbers on the traffic of the old!delicious (to get a ballpark userbase), plus maybe an idea of AO3's userbase as comparison. With that, I could definitely crunch the numbers a bit more.

I don't actually have an issue with advertising... but it just would need to be advertising that matters to fandom. Like letting fanartists advertise or archive-owners or whomever. Haven't really thought that through, but where I get annoyed at, say, "you can earn $500 a day from home!" (oh please) I actually rather feel good about seeing ads from various artists or people offering to edit or, I don't know, people selling their related-to-fandom stuff. It's like, they're fandom, like I am, so they're not obtrusive.

Or we could even do it as, hmm -- totally brainstorming here -- if you start a community, it's, random number, $12 for the year for all the network and community and whatever account... but if you pay $24 (again, totally random) then your community also gets put in the rotation as an advertisement-box in the side column, to let people know you're there & welcoming members. If six of us wanted to start a community for, oh, Nobuta wa Produce, we just might say we could spare a few extra dollars to have a little graphic & link to our community page o' links. It'd be like if I advertised on Dreamwidth -- I'd be seeing it as contributing, not competing, as my way of showing support. I may be alone in that attitude, but I really don't think so.

Actually, now that I think about it (and considering I have a degree in this, I'm kinda embarrassed for myself), it'd make a lot more sense to do it as a nonprofit. After all, if the site provided a service to everyone (regardless), then that's its mission (catalog the internet for/by fandom), and those people who pay get a few perks (similar to the way that donating will get you a free pass to the park, or a t-shirt, or other membership benefits), and that donation can -- I thnk -- be written off in part or whole. Would have to check to see what the laws are now, and of course there's the mission requirement. But I think it could be done, and it also means fundraising wouldn't raise the SEC-related issue of ownership, because any funds raised could be written off (depending on jurisdiction rules, of course). I'll do some research on that as a possibility and come back in a few days with more concrete info.

A'course, there's still the requirement for money, but I can't think of a better way to tie together the fandom requirement of altruism with the basic need to pay for servers... and I guess I should call my hosting service & get some numbers from them, too, for some realistic costs. And we still need a project manager! Because me, you don't want as a project manager. I can do your BA, your PA, your RA, your IA, your UX, and some of your UI, and a bit of dev depending on backend... but I'm so not a PM. I'm just all the other letters of the alphabet. Except QA. My eyes glaze over when it comes to QA.

threadjumjping

[drunkoffthestars]

While generally opposed to all advertising, if you were looking to supplement the funding of a fanish service, I'd look at the Ravelry advertising model. They only accept exceptionally targeted advertising, and as such, can sell their adds for much more than they otherwise could. And in general, they are ads that people are interested in seeing.

It would be a bit trickier on a fanish service than on Ravelry, because the targeted interest is pretty obvious there: YARN (and knitting needles), but there are a few obvious starting points.

For people to write off donations to your non-profit you have to be a special kind of non-profit. But my knowledge on these things ends precisely THERE.

But I like the idea.

Having no concept of what a PM does, I can't help you there.

[kaigou]

I don't know your jurisdiction (US or not), but I do know that in the US, there are several classes of nonprofits, but that donations are tax-deductible to all of them. That is, donations of cash or materials. You can't donate services or time. As for classes, there are religious nonprofits, fraternal/sororal nonprofits (like the Masons or the Elks or the Shriners), hmm... educational, I think, and then the general class which has its own name that I can't recall right now.

Unlike a sole proprietorship, there is an outlay to set up a nonprofit, because you do need someone legal to do the paperwork, IIRC. Generally speaking, though -- very very generally because it's late at night and I'm kinda fuzzy right now, so hopefully someone will come along & correct me if needed -- I believe the major requirement is that you must have a mission statement, and be able to prove that all work you do (including outlays) are somehow related to that mission.

That said, there are quasi-businesses I've known that are nonprofits, like spinning/weaving guilds. One back in DC had classes (that you paid for), and a shop (where you bought stuff), but the guild itself was nonprofit. It's not like you can't exchange money for goods with a nonprofit (who sell stuff all the time to raise money), and the range of nonprofits is incredibly broad. The real issue is that you want to provide a service that the govt can't provide and businesses won't provide, and I'd say that fits, here.

The catch is that I don't know of any NFPs that are entirely online. I mean, I'd think there'd be some by now, but that means research. And by entirely online, I mean nothing tangible in terms of, idk, like annual donation drives for children-in-poverty holiday gifts, or food drives, that kind of tangible benefit. Yet there are NFPs whose mission revolves around engendering education in some way, so I'd imagine someone has to have taken that online.

The other catch is that people rarely invest in NFPs. They invest in something where they can get a return, but then we're back to the SEC and its issue with crowdfunding into shareholders... but at the same time, opening the door to investors means opening the door to other people making the decision that may or may not reflect the userbase. An NFP only answers (by US tax law) to its mission; if it deviates from its mission, it can have its status revoked. Like if I'm on the board of an NFP and I use $500 of NFP money to, say, take my dogs to the vet... that's not part of the mission. But if I use $500 to take five people to dinner as part of convincing them to donate money, then that's fundraising (which is considered "working towards continuing the mission", in the sense that you do have to fund these things, so fundraising is a kind of earning money to keep the NFP going -- which covers a lot, including mailings, radio ads, billboards, and so on).

Back to the advertising: I think the best would be starting with general targeting -- ie, these are fanworks (of whatever type), and you're a fan. I think it'd be best to only accept advertising from members and/or active communities. Or maybe instead of thinking of it as selling items, the column space could be for "sponsored" communities -- that is, groups (or single people?) who donate a little extra, and they get a public thank-you, just like any NFP does for those who sponsor, gift, donate more, etc. Then it's not advertising, per se, it's a public thank-you. One NFP I'm currently working with is now doing that on their website, where sponsoring businesses get what could be considered an 'advertisement' but is really an extra way to thank them, by having their name/logo be larger on the main page.

Thing is... the advertisement-by-members means there'd be the risk of some company starting its own mediocre one or two link community, and then purchasing a bunch of advertising, seeing it as a space with little to no competition. That, I'd be not so keen on, but how to prevent it, I'm not sure -- unless it were simply treated like any other NFP. You got your people who donate above X amount, they're "patrons", and people who donate above Y amount, they're "supporters", and down the line. (Just think of what you see in the general handbill at your major city live theater or art museum.)

Sorry for the rambling, it's been a looooong day. Ah, also, about NFPs... I'm almost positive that one requirement is that you be open to the public and/or non-discriminatory in your mission for the public. Like the Shriners, who are invite-only per membership -- but their hospitals are definitely for everyone, and they do a lot of work reaching out to people who'd otherwise be unable to afford childrens' medical bills. So on the one hand, there's a private element, but on the other hand, who they help is public -- and I think a website on the structure discussed here (free for everyone, with option of paying to receive extras) does qualify. I just haven't had a real chance to sit down and puzzle out what the mission would be, towards that end. Time for research!

[shadytail]

The catch is that I don't know of any NFPs that are entirely online.

OTW is already 501(c)(3) organization. For fandom use, spinning off AO3's bookmarks into a separate but interoperable project under the OTW umbrella seems like the most sustainable long term option. IMO the OTW has a good track record to date, but I'm a member and therefore biased, plus four years isn't all that long. Also, some portion of fandom will refuse to use an OTW service on principle. On the other hand, I don't think fandom can support two nonprofit infrastructure orgs. So ultimately I don't know.

I wish Delicious had held on a few years longer until AO3 had a chance to beef up bookmarks. As is, I'm afraid they're not really in a position to take advantage of the current bookmarking vacuum.

From discussions, it seems like most people would prefer to keep all their bookmarks on one service, which argues for a DW-analogue business instead. Maybe DW itself will finally implement the memories redesign they've been promising and allow saving offsite links?

[kaigou]

I think I get the doghouse for forgetting AO3 when I wrote that. Or whatever the intarweebs version is. No cookie?

AO3, I'm guessing, qualifies because of its archival aspects, and holding the content itself is part of that. I suppose linking the rest of the 'net could be considered part of that mission (not really up to me to determine, after all). I think -- coming at these kinds of things from a very IT-based perspective, as pertains to applications (and incidentally, to NFPs) -- is that you find something you do, and you do that thing really well. If something is outside the mission, not directly part of mission or the basic scope, you don't go there. That way lies madness, or at least eventual disaster, especially for smaller organizations/companies. Not saying someone can't attempt to be all things to all people, but even Google -- which does -- at least breaks its different be-all-things into different parts, and tackles each at different speeds. Google mail, google maps, google plus, and so on: you could consider each of these independent subsidiaries that might tie in together, but they're not co-reliant. That is, if google mail collapses tomorrow, it won't affect the reliability of google maps (as a distinct application, not talking about the intra-monetary company aspects).

Which means for me, at least, scope is a major issue and one to be curtailed, hard. Pick one thing to do, and do it well, to survive. Scope creep kills.

[shadytail]

Scope creep kills.

Word. A strictly-fannish bookmarking site would fall squarely under OTW's infrastructure mission, but yeah, it would need to be a sister-project like Open Doors or the academic journal. And then practically speaking, lots of people would balk at splitting their bookmarks between two or more places. So I don't think such a project would get enough takeup.

TBH Pinboard + planned features - setup cost would fill the niche pretty well.

[kaigou]

I take it you mean "- setup cost" as in not having the "pay-to-use" requirement? If so, yeah... That's the one thing that I don't like about pinboard, for all else that I hear (and read) good things about the management. There are enough barriers to joining online fandom (internet access, language, skills, computer/mobile levels) that we don't need to add more.

[denise]

Hit me up in email (denise@dreamwidth.org) if you're curious about this further -- there's a bunch of issues surrounding the junction of NFP + accepting user-generated content. We looked into it for DW at the start, but it's a lot messier than it looks, and the opinions of several lawyer friends of mine is that there's no real way to take a social network/Web 2.0 type site to 501(c)(3) status without getting screwed.

(BTW, this whole thing was very, very interesting to read!)

[kaigou]

Thanks, but NFPs are crazy enough as it is. Don't need to make them any worse! Can't say whether someone else might take you up on your offer, but me, I think something more like cooperatives are one way to go, to prevent selling-out or buy-outs. Or just make sure the company's started by someone absolutely determined never to sell out for a million dollars, but frankly, I'm not sure I could make that promise myself. I mean, a million dollars is really hard to turn down... so I'd rather build into the framework that buyouts aren't possible without member okay, hence cooperative.

That said, I wonder how AO3 is set up, given it's an NFP and it's an archive of user-generated content. Or do you mean something other than that, when you say "social network"?

[denise]

Yeah, I think I'm a definite minority in that I wouldn't give up control of DW for ten million cash on the barrel. *g* (I once baffled my mother with that statement.)

The OTW has some leeway in that membership in the org has no connection with having an account on the AO3, and they have other projects other than the Archive. I still wouldn't want to risk it if I were them, though.

[kaigou]

Oh, I think our reluctance to sell depends mightily on where we are, life-wise. When I had a bookstore, I wouldn't have sold it, either, for any amount of money on the barrel. Now, though, I have over 80K in grad school debts to pay... and a million or more would be really, really hard to pass up -- because it's that, or be paying for the rest of my natural life.

But still, it seems to me that if it's something you want to keep control of, then you write that control into the program from the get-go. Rather than risk having, idk, something catastrophic happen, or just the bleary-eyed daily grind getting your down, at which point cash can start to look far more attractive than the app or business you've created. Better to shut off the risk than assume that it'd never be me who gives into it, at least imo.

[denise]

Yeah, makes total sense. And, I mean, I know myself well enough to know that I'm a stubborn, cantankerous bastard who won't give in to anything, but we still put a bunch of failsafes in the setup when we were incorporating DW in the first place!

[sara]

There are more classes than that, actually, under different parts of the 501(c) setup -- for example, you can register a nonprofit cemetery as a 501(c)13. The hitch with doing that is that if you plan to pursue grant funding, most grant funding in the U.S. is only available to 501(c)3s.

To be a nonprofit, generally you have to provide some kind of public benefit. I don't know that a service which would mimic functions provided by for-profit services would qualify.

And you don't actually need a lawyer to register as a 501(c)3. I am not a lawyer and I've done it (I was assisted by a friend who's a teacher). There's a common perception that you need a lawyer, and most people do have one, but it can be done without.

(And this has been interesting to read through, thanks.)

[kaigou]

You can also set up many types of companies without a lawyer, too... but if you're going to do it right, it still seems wisest to me that if you're not experienced, then you find someone who is. Most of the time, that someone is a lawyer.

I figured I wouldn't go into all the myriad crazy types of NFPs, though, since that might make brains start hurting. Although... if I were making this post now, I probably wouldn't even mention NFPs, to be honest -- not with the current wank going on with AO3/OTW/whatever.

I wouldn't be surprised if a lot of people currently have the impression that NFPs are just a surefire path to self-destruction, which is really a pity. Certainly, NFPs have some serious growing pains what-with founder's syndrome, and the whole "I do this because I BELIEVE so I don't HAVE to be sane about it" wackiness... but there are a lot of successful, quietly hard-working NFPs out there. Possibly a lot more than the crazy imploding ones, but it's only the crazy imploding ones that get the negative wanky attention.

[kaigou]

Cripes, it has been a long day, because in rereading I realized I just went right past your final point in my reply. Err, sorry about that -- had a three-hour meeting this afternoon and that much talking (and meeting of people) tends to send my brain into a dull state when I get home. Introversion regroup time! (And what do I do? I sit on DW and REPLY TO PEOPLE. Logic, there.) Anyway!

I have no idea how much fandom spends online, via clicks. I know that most smaller sites using Amazon have to target very specifically -- the Amazon bookstore isn't really kind to the process of adding new titles, last time I checked (that is, I don't think it'll randomly bring stuff up; you have to log which titles you'll be listing). But thinking about it now, I don't see why it couldn't be that, say, a community suggests (or maybe even adds, itself) five or six titles that pertain to its fandom. Then, when someone clicks a tag that's the same as whatever the community's chosen as the item-tags, those particular selections would show up. Hmmm. That's targeted based on your current page-reading, but at the same time, it's not just Amazon being random. It's a community of fans who know this stuff saying, "this is good stuff!" or whatever.

I'm not sure I'd put all my eggs in that basket, but in terms of bolstering the site -- and letting the fans speak for themselves in terms of which copy/format/whatever to buy, in their fandom -- I think that works better than the alternative of just opening up advertising to any/all. I mean, if it's "so-and-so community recommends..." then, hm, I think I'd be more inclined to at least give it the benefit of the doubt, if I'd already thought about purchasing or were open to it. It's kind of like how we're more willing to spend money on an unknown if a friend swears by it... so I wonder if some geek could come along and tell me whether it's possible to link all that together: the Amazon books, the Amazon (or Powell's) sales-API, and the recommending community. I imagine it is, but it'd be nice to have someone say they know how to do it!