RIP Social Networking, Long Live Social Networking

A couple of weeks ago, a little-known company called App.net publicly launched a grand experiment. Founder and CEO Dalton Caldwell announced a crowd-funding campaign to raise $500,000 in 30 days, for a new social networking platform that aims to compete with the likes of Twitter – except without the help of advertising.

“We will never be ad-supported. Our product is the service that we sell; it is not our users.”
-Dalton Caldwell

If you think Dalton Caldwell sounds a little kooky, you’re not alone. The announcement alone sparked a firestorm of controversy over on that other popular social networking site, where reactions ranged from ecstatic to skeptical to downright scornful. “No one would pay to use another Twitter,” the objections essentially went. Additionally, a lot of people think App.net is reinventing the wheel – and needlessly so, considering Twitter’s success to date. But in the two weeks since Mr. Caldwell launched his project, it has experienced unanticipated success as +15,000 users rushed to pay $50-$100 apiece to get a place in line for a year’s access to the service. His plan, it appears, is working.

It is unsurprising that App.net appears to be taking off. The timing couldn’t be more conducive.

First of all, its announcement comes at a time when Twitter is busy alienating the very developer community whose devoted effort filled its sails with their wind and made it accessible and fun enough to enjoy mass-market adoption. Existing and would-be developers of who-knows-what are furious at Twitter for upcoming policy updates that will restrict API access, and are aggressively looking for better options.

Secondly, an old and broader discussion is taking place in social media, concerning the relationship of services, products, and customers. You know the deal: a service (such as Twitter or Facebook) that is free for individual users cannot survive without customers. Paying customers. Namely, advertisers. And if advertisers are the customers, users are the product. The service itself is simply part of the machinery that delivers product to the customer. Now, it’s not like there’s anything particularly new or sinister about this arrangement, but frustration with service quality is on the rise among users, and developers – increasingly prohibited from innovating to improve these services’ user experiences – are losing their incentive to try.

Thirdly, App.net isn’t the only service to grow out of the yearning to build more integrity around users and content. Upstarts like Medium and Branch are building innovative communities of writers and photographers, devoid of (in Medium’s case) ads and other echo-chamber features familiar to users of Facebook, Tumblr, Twitter, and more.

Yeah, but is an ad-free Twitter replacement worth $50/year?

To eager developers (who pay $100 for API access) and other early adopters, it certainly appears to be. But the longer-term question is whether a membership cost will prevent the company from getting significant enough sign-ups to be self-sustaining. There are raging skeptics and wide-eyed dreamers and if you want to read their predictions, just google “app.net will fail” and off you go. But don’t bother. If toll roads and cable television can succeed in a country abundant with free interstate highways and broadcast TV, so can App.net.

What does this mean for me?

If you’re an advertiser or marketer, take heart: It’s a little early yet to start hyperventilating. App.net is in its infancy, and even if it’s wildly successful, it has a long way to go before it poses a threat to Twitter. Your promoted tweets will remain as effective or ineffective or adored or reviled as they are today – for now. But just as social networking turned advertising and marketing upside down during the past five years, the coming era will put users and their content in a far more powerful position than they are today.

Some will see this as a threat, others as an opportunity. There will be plenty of hand-wringing and debate about what it all means to businesses. Because, right now, nobody knows. All that seems certain is that the winds of change are blowing again, and this time it’s feeling like a mighty stiff breeze.