[iDC] Ello--Alternative to Facebook (Karyn Hollis)

[David Carroll]

Thoughtful responses, thank you. This is an interesting story to be following and participating in.

Regardless of whether or not you are excited about joining (or not joining) ello.co, or even indifferent, there is a compelling (historic?) network incubation in progress right now. Observe the emergent practices of this new network called ello.co, at the minimum. 

I'll try to respond in threaded questions, posed by Karyn and Matt.

> From: Karyn Hollis <karyn.hollis at villanova.edu>

> Here's a very basic question.  Why would vulture capitalists put any money at all into Ello if they didn't hope to get a return on it?  And if they do hope to get a return, then as many have said, Ello must make money from users, right?  So ultimately Ello doesn't sound like much of an alternative to FB.

Let's hear in their own words, what the VCs say about their investment in Ello. Maybe they'll slightly shift your perception as greedy "vultures." Maybe you're not buying it.

via http://katrynadow.me/shift-happens/ quoting a partner of FreshTracks Capital, the Vermont outfit leading the Ello investment:

“We practice venture capital in a way that very few people practice it. We’re a really small-town venture. We’re patient, we have long exit horizons, we’ve had some successes, we’ve been around for a while. This is not Kleiner Perkins.”
 – Cairn Cross

A quote from an Ello cofounder regarding FreshTracks Capital:

“We’re talking about 400 grand we took from super-lefty, forward-thinking Vermont guys, Our investors are just about the least evil people you’ve ever met. We have shareholders and a board, but how better to keep your founders in check than a manifesto?”

As posted from one of the founders, Todd Berger, quoting Ello user David Cohen, founding/managing partner of TechStars.
https://ello.co/todd/post/tD9JTO2zLn7rLHR2XEVKaw

/via @davidcohen https://ello.co/davidcohen

"It’s been interesting to see all the discussion of whether the goals of ello are compatible with the goals of their investors. Since my goal is simply to support great founders, I think there’s no issue. I’ve always been one to invest in people with great ideas who put their users first and are looking to make the world a better place. That’s why I’m a small investor in ello (our fund invested about 9 months ago). We were at that time and still are fully aware of and committed to the manifesto (https://ello.co/wtf/post/manifesto). In fact, I remember it being the first thing they showed me. Anyone that has worked directly with us knows that we never pressure exits. We're long term investors and we fundamentally believe ello's vision and beliefs are good for the world. This belief coupled with our relationship with the founders are the basis for our investment. Clearly ello strikes a chord, and we're glad to see that. In the end, it’s how ello behaves and stays true to themselves and to their users that will matter. I’m confident that this will play out well."

People have a lot more to say, with actual nuance, when you give them more than 140 characters, or 4 lines in a scrollfeed.

It's a peculiar notion: a leftist (in the popular sense)(or least a liberal/progressive)(ok, left-of-center) accredited investor with money to risk on absolute market uncertainty, and put it into companies that share your vision for the world. Perhaps there is a framework to consider how Ello is going to thrive because VCs invest in founders more than ideas or companies.

+++

Is the next wave of tech startups more-Commons-minded than the previous generation's? 

Are the "the least evil people" behind ello.co trustworthy to you?

I can understand the resentment of Ello on many levels. Ello is in its exclusionary state: the dreaded PRIVATE BETA. It is unfortunate, this technical requirement for throttled enrollment, to build the capacity for scale, in real-time. It makes people feel bad. 

If you didn't get invited to the first viral round, you feel bad. If you go on it and don't get it in two clicks, you feel bad. If you don't get the neurotransmitter squirts from the automated affirmations, you feel bad. If none of your friends are on there, it's lonely, you feel bad. If you have to declare social media bankruptcy and start all over and join it anyway, you feel bad. If it doesn't live up to the hype, you feel bad.

Despite this magnificent skepticism, a huge number of people are likely to continue to join and create an emergent community in record time under an experimental model of ad-free. It represents the next wave not only by way of manifesto, but more importantly because it subsumes the user experience and affordances of all the great social platforms into a simplified and unified context. Users draft and compose multimedia hypertexts again in a less constricted/less boxed-in convention of views and controls. (Way less dataveillance maybe too.)

ello = (Fb/Tw/Pin/Tumblr/LiveJournal/BBS)

HYPERTEXT IS BACK.

My instinct says we'll all be using this in the coming months, or during open enrollment, whichever comes first, because why not? 

Let me take it all the way now. If Ello can build the capacity to sustain a great migration, an all-at-once reset for a huge number of people, so that in an instant, maybe even on a day that is pre-scheduled and widely announced, the unthinkable could occur. Login with existing accounts of your choosing. There is a one time cross-indexing, those credentials are tossed. All-in-one network aggregation occurs. Ello remaps the connections across multiple networks into one, maintaining and migrating the network bonds back together across domains and integrated into ello.co — I believe this would be technically possible. Ello would be well-poised to invent this type of network portability having survived its surprise virality so successfully. They now have a better sense than anyone, what it would take to build that.

> From: Karyn Hollis <karyn.hollis at villanova.edu>


> And another question--since web hosting is not free (or are there free web hosts?), is charging a user fee the only way to fund a FB alternative?  I for one would pay such a fee to avoid the "dataveilance" on FB.

Cloud costs scale upon usage so the more users you serve, the higher the cloud costs you'll incur. It's a good problem to have but it does cost real money. I estimate that Ello will spend about $10k/mo on the cloud at its current growth rate. (Quick/rough guess, pulling numbers out of the air, just to give you a sense.) I suspect they pulled support of GIF headers in fear of a jaw-dropping bandwidth bill when they multiplied for virality of that feature alone.

However, the cloud is just a slice of operating expenses. The lawyers make piles of money in fees with startups. Talent is expensive. Benefits, real-estate, accountants, etc. These "products" appear immaterial to us, reinforced with deceptive language (cloud, platform, service), but they are far more bricks-and-morter than we tend to acknowledge. I think we're starting to realize that it's crazy that we expect them to be free, and that we're paying with another form of currency — our identities.


> From: matt g <matt.lists at gmail.com>


> Well, there is/was the app.net model, which involved such a system. . .

I've heard App.net is on life-support. It didn't catch on like it needed to. Traction matters and sustainability is everything for social networks. If Ello fizzles out, it deserves to. However, the traction curve on Ello is steeper than App.net's initial launch, so its future looks much brighter because it's still got momentum toward critical mass even with invites frozen. 

I think App.net tried to to do much at once and never had a clear and simple value proposition. I fear it was way too nerdy for its own good. Ello is trying to do one thing and do it very well, with an earnest voice, a stylish face, and a value proposition that is resonating with people. No ads. I got two more Ello followers in the time that it took to write that paragraph, wow. 

As for other examples and models, let us point to an open-source social platform that started as a grant funded project, created by academia, and went on to become self-sustaining and continues to mature and thrive? Let's say 1 million active monthly users is viable minimum metric to qualify a platform as "thriving" because this scale is very attainable. We would question why a platform can't reach this milestone in a year or two if it has any kind of serious investment behind it. Ello met this metric in the time it took for my initial post to this list to get published in the digest, two days. Hypothetically, a product could go viral and saturate CUNY, in an instant, at this scale and virality rate. 

The first example that comes to my mind is ARIS Games from U. Wisconsin-Madison (D. Gagnon et al) and it publishes its stats transparently at http://arisgames.org/server/stats/
This is a hugely successful project out of academia. Why isn't it even more successful? What's holding it back from hosting 1m players/creators a month?

+++

It's still too early to say how Ello will earn revenue without selling users for ads but there are so many untested possibilities. The founders readily admit that the product was not ready for prime-time when it went viral. Read https://ello.co/cacheflowe for the candid reactions of a co-developer not being prepared for immediate traction at scale. 

The unfinished state of the product has already triggered emergent community practices as users publish manuals and devise a citation mechanism through social-text convention. Automated affirmation remains unimplemented. I've read comments speaking to the benefits of not having a "like" and "retweet" mechanism. It causes a return to the thoughtfulness that goes into responding and quoting to disseminate posts and fragments. It's a wonderful wild west moment. Call it ello fever if you must. The fever will burn off, but the community isn't likely to burn out if this energy builds. 

They should be releasing another round of invites. If they share their general traffic/metrics publicly like they did when they went viral, that is remarkably transparent for a private, VC-funded company. These folks are doing something differently as this data is usually kept as a trade secret. If they continue to remain atypically open about their otherwise proprietary information, you'll see other instances of the manifesto being applied to business practices and logic. If they lock this kind of information down right away, then, maybe Ello is more likely closer to business as usual (or the traffic slope dips). Eyes on Ello for the next seeding.

I'm bullish on the notion that users will pay a small fee when asked in order to keep things ad-free. Simply imagine 100m users paying $1 a year, the first year is free, and you have your answer. This was the price/model of What'sApp before it was acquired by Facebook because they were at massive scale and charging so many people so little it amounted to $billions. Ello cost cost $1 and grow to a $100m/yr business during the time it takes us to teach a semester of classes.

The model that produced Diaspora* was appealing to the subscribers of this list: opensource, distributed, decentralized, crowdfunded, opendata, the Commons. But it wasn't viral. More tragically, the most active userbase of Diaspora* is ISIS/ISIL. Is it not an abject failure because it's been harnessed as an engine of "evil" and no one is using it for any discernible "good?" 


TL;DR

The media and skeptics are asking for ello.co's business models but their investors and users are not. You basically have to be ok with TO BE DETERMINED and consider the possibility that that the manifesto can be upheld and new models created because of "next wave" VCs/entrepreneurs influenced by facets of opensource/distributed-creativity/commons culture. 

Ello makes us feel bad because a private beta is exclusionary and its rise places new risks our own investment pools in existing social media capital. Ello makes us wonder why open-source and grant-funded ventures are underperforming in relation.



- Dave Carroll
ello.co/profcarroll