Ello versus the Mountain

The anti-Facebook (and anti-Twitter) social network named Ello, has been making noise for a little while now. Their vision and enter-the-market strategy of having an ads-free social network with no risk of your data being sold and no obliging members to use their real name, certainly appeals to a lot of people and that´s why it´s growing like crazy at the moment (30,000 new subscriptions per hour have been reported).

The manifesto is probably the best part from a marketer´s point of view, as it communicates in a creative, concise and transparent (clearly important values to Millenials) manner how Ello is supposed to be disrupting the social media industry. The invitation-only ´limitation´, seems to be working psychologically as to make users feel all the more special (while it really isn´t, every user gets 5 invitations to give away).

So, will this Ello thing that everybody is talking about be the next social media giant and beat Facebook to it?

It´s all about the business model

Just like Ello and most social networks, Facebook and Twitter started without showing you any ads, optimising the platform for the product (it´s user base). They created and continuously improved a platform that enables people to connect with each other and to share stuff. Even now Facebook Ads are booming, they are still improving their user experience with small tweaks and big changes.

For Ello, one thing we know for sure: eventually they will need to make money. Enough money to satisfy FreshTracks Capital, the venture capitalists that invested 435K in the social network. Ello´s promise to not sell user data and to not show you any ads ever is an inspiring vision, but what´s the foundation of it? In other words, how does Ello plan to get rich?

This is where things stop being as transparent and as clear as they are in the manifesto. This is what Ello says on ‘supporting Ello’:

Very soon we will begin offering special features to our users. If we create a special feature that you like, you can choose to pay a very small amount of money to add it to your Ello account forever. We believe that everyone is unique and that we all want and need different things from a social network. So, we are going to offer all sorts of ways for users to customize their Ello experience.

So Ello will not only stay ad-free, the basic Ello will also stay free for us to use! However, if we want any ‘special features’ (Anonymous messaging? Emoticons? Super Mario running over you’re screen every time you talk about Pizza?) we ‘can choose’ (or do we have to?) pay a ‘small amount’ (small because hey, it’s all relative).

Not only is this vague (at least to me, but if you think otherwise please do speak), it also doesn’t seem to be a very viable business plan just yet. I for one, highly doubt that the amount of people paying for those special features, will be enough to please investors. Of course, the future might prove me wrong; innovative business models of the past have received loads of skepticism before they lifted off and got huge. What brings me to the next question: Will Ello be able to grow huge?

The mountain it needs to climb

Let’s first consider Facebook’s active user base of 1.32 billion monthly active users in June 2014 (almost 20% of the world’s population). If Ello’s actual 30,000/hour pace of new user subscriptions would remain steady, they would need 5 years (!!!) to catch up (feel free to do the math). Obviously, if they get mainstream, the pace might be exponential and they will catch up sooner, but even then: one thing is to have users and the others is to have active users.

These are just numbers, but what about all your Facebook friends versus the few you have on Ello? Part of the value Facebook nowadays is offering to its users, is having all your friends already there. This is also called the Network Effect, as displayed in the image: the more telephones in the network, the higher the value of the network to its users. The same can be applied to people in social networks.

Also, for Facebook we have been talking about active users. This means they need to come back regularly. Ello still needs to prove it can retain its users. I for one, ever since I created my profile and added some friends to Ello, have been back on Facebook on a more than daily basis. And haven´t been very active on Ello just yet. The hype to build a user base has been created. Now, the big question that remains is will users churn or will they become active?

There is one other issue I have that I will not spend too much text on, because I’m not a UX expert (not at all). But I’m a user and if I as a (quite tech-savvy) user found some features annoying or very limited, then most probably I’m not the only one. Of course, it´s a beta version and this will most certainly improve. Facebook has had a decade of iterations and continuous improvement on UX. Ello might be a big step back for many users and it will not be easy for Ello to bridge the gap.

And in the end, do we want to pay money for special features and if so, how much would that be? Aren’t we all used to social networking for free? Ok, the ads might be annoying at times, but people’s personal publicity filter is ever improving. LinkedIn has proven that it is possible for a social network to make users pay for certain features. However, for LinkedIn this is not the only source of revenue. Many people will prefer using their already developed ad-filter techniques, over paying for ‘special features’ on an ad-free social network, with less of their friends being active, a very limited user experience

Let me know what you think.