Dalton Caldwell made some serious waves earlier this month when he announced “an audacious proposal” to refocus his company App.net to build a real-time feed API and service that would essentially be a new, more open version of Twitter.
Perhaps the most unique thing about App.net’s new direction is that it aims to be something that users will pay for, rather than another ad-supported social platform. Dalton has set up a Kickstarter-like fundraising effort to attract $500,000 in necessary backing from some 10,000 potential users of App.net’s service. App.net has a self-imposed deadline of August 13th to meet its funding requirement. With two weeks to go, they’re a little over a fifth of the way there in terms of money raised — so the pressure is certainly on.
It’s always fun to hear about big ideas like this, so it was great to have Caldwell stop by TechCrunch TV last week to tell us in person about App.net’s new mission and clear up some common misconceptions about what they’re up to. You can watch our whole conversation in the video embedded above, and below I’ve excerpted some of his points.
Electricity, Water, And The Social Web
Caldwell says that if social web services like Twitter want to be treated like platforms for an ecosystem (which they clearly are, as evidenced by the freakouts that occur when Twittter goes down), we should get used to paying for them like we pay for other infrastructure services:
“If you think about things we take for granted that are infrastructure — electricity, water, cell phone plans, phone plans, you name it — these are things you pay for, and you expect that when you turn on the faucet the water comes out, and that it is what you expect.
…My thesis is that if you are a social platform, platform being the imperative word, you are telling developers to build their businesses on top of you. You are telling websites to link into you. You’re telling them, hey, I’m going to enable social interaction and communication, and I’m going to be a rock-solid thing that you can depend on. My thesis is that if you purport to be a platform, your business model needs to reflect your platform-ness. Because if you instead have an ad business model, and you’re not making enough money, you can end up slaughtering your ecosystem.”
Millions Of Dollars And Users Not Required
If App.net is thinking so big, why is it only asking for $500,000, a relatively small amount of money by modern web standards? Caldwell explained it like this:
“We chose the number $500,000 because of a Paul Graham post. Paul Graham wrote in this post called “Really Ambitious Startup Ideas” that if you built a search engine, a Google competitor, that was used by the top 10,000 geeks… even though it’s really nerdy and will only appeal to those 10,000 geeks, you can build something that will ultimately displace Google. Because when you think about Google displacing Yahoo, [at the time] Google was only used by 10,000 geeks. It was made for power users and trickled down.
If I can build something that appeals to a relatively small number of people, but make them passionate about it and make them believe in it, then that will validate that this market actually exists.”
Will It Actually Make It?
In short, Caldwell says, maybe yes, maybe no:
“If you look at the people who [have invested in] Join.App.net — John Gruber, Marco Arment — people that I look up to have pretty impressively supported this and agreed with it. And that’s been inspiring. So I think it’s gone quite well. But I have no idea if we’re actually going to get to 100 percent [of the funding needed to take App.net forward]. I think that a lot more needs to happen.
..There’s a great deal of skepticism, and again, I am completely sympathetic to that. Remember Diaspora? …It captured people’s imaginations, and then they weren’t able to do the thing that they said they would. So I actually really relate to and understand people’s skepticism.”
Network Effects Work In Mysterious Ways
The most common misconception Caldwell says he’s heard is people saying App.net is ignoring the phenomenon of “network effects,” where services go up in value as their user base grows. Caldwell says he definitely gets that concept — but that he’s seeing the potential for it to work in unique ways:
“People seem to think that I don’t [understand] network effects at all, and that I’m just totally crazy… Look, the way I think about this is that if you have a sustainable business on a small user base, that will give you the time and momentum to get you where you need to go. Look at the iPhone: Very small market share out of the gate, but had runway to build the momentum of the platform, despite the fact that it was very expensive and very esoteric when it came out.
And the other thing is, I would argue there is such a thing as negative network effects, where as communities get larger the quality of the community gets diluted. And if you look at what a lot of the people that built large social networks previously are doing now, it’s smaller, more curated communities.”