Imagine going on your local Hy-Vee grocery store, pushing your cart through the aisles, stocking up on food for your family for the next week or two. Just as you reach the last aisle and with your basket almost full, an announcement comes over the intercom:
“Due to economic conditions, Hy-Vee will now begin charging $25 for the use of our grocery carts. Thank you.”
Seems ridiculous, right? But that’s exactly what social network service Ning essentially did this week when they announced that they would no longer support the free social network service that most of its users have used to establish their own niche “facebook” type online communities.
[tweetmeme source="admavericks"]
How do you blow through 120 million dollars in venture capital funding over six years years with only 170 employees? Give the Ad Mavericks that kind of dough and we could start a vegetable garden in our parking lot that would have a better return.
Never heard of Ning? There’s a good chance you’ve seen or even joined one of their more than 2 million community sites. Meredith (one of the largest magazine publishers in the world) has used Ning sites to build niche online communities – like their 3,000+ member Farmers for the Future community site. The new 200+ member Des Moines Social Media Club also built their networking site using Ning. Ning communities range from those with more than a half-million members, to those with fewer than a dozen and they cross nearly every industry – from healthcare to government to employment to movie fans.
The problem is, Ning didn’t just abandon those smaller networks that were using their service for free (and allowing Ning to sell advertising on the sites), but also has shaken the confidence of even their premium networks that supposedly won’t be affected. Bad move … unless, perhaps, you’re looking to clean up the financials and preparing to sell out to someone who has already figured out how to convert online eyeball counts into cash.
Do companies have the right to change their businesses in order to increase profit? Of course they do. But when you make changes so significant that it completely changes the relationship you have with your customers, that’s a sign that your business wasn’t really a business. It was an idea looking for a business plan.
Note to venture capitalists: if you’re looking for a better place to invest your money, you may want to check out the place Forbes Magazine just named best place for business in the U.S. You might even find startups that are looking to generate a profit rather than just another round of funding.
Congrats Ning, you’re our worst of the week.
Author: AdMavericks
www.lessingflynn.com
{ 3 comments… read them below or add one }
Unbelieveable! Or not. How do you see this affecting the Des Moines Social Media Club (of which I am a member)? Will this fledgling group be forced to step back and search for another platform?
Agreed. But less upset with the move to the pay model than with how they’re handling it – abruptly and insensitively, with little to no transitioning conveniences (thus far) for their previously-free networks.
There are plenty of free alternatives out there – we use WordPress / BuddyPress to accomplish the same (and we think much better) community experience.
The *big* problem isn’t moving people to a new system…. it’s migrating all the content and collaboration (data) that is in Ning.
Posterous, for instance, is working hard on a Ning import tool
http://blog.posterous.com/posterous-commits-to-building-a-ning-blog-imp
Look forward to seeing similar plugins coming from the WordPress ecosystem for user and data migration.