Ello wants to make money too, just not in the Facebook way

Ello, the social networking site that has currently become the toast of town with as many as 31,000 join requests an hour last Thursday, is going to rely on the freemium model of making money. As Ello co-founder Paul Budnitz told Mashable “the aim is to go with the freemium model app makers are increasingly adopting: Offer core service for free, and additional, “premium” features at a cost.“LinkedIn has this feature as well, but remember while users are always complaining about data privacy and ads, the fact is that very few of us are willing to pay for premium features. As while Ello’s ad-free policy is great for now, if you think that this means that Ello doesn’t plan to make money well you’re wrong. Budnitz also told the website, that, “We want to make a successful business that makes money, but it doesn’t have to be a $30 billion company.” In other words, they plan to make money, just not in the obscene manner that Facebook has been doing. So what is Ello? Well, thanks to Facebook’s new real names only policy ( we all know how well that went for Google Plus), the LGBT community in US started looking for a new social network and found itself better suited for Ello, which doesn’t insist on real names. Ello has kind of exploded since then and has managed to generate a serious buzz. As we had noted in this earlier post , Ello is currently in beta testing and you can only join if you get an invite. You can request one by sending an email. Once you join you can send up to 5 invites via email. In an interview to BetaBeat, Budnitz, who incidentally also launched a luxury bicycles company in 2010, says that idea for the social network arose due to the disillusionment with other social networks. He told the website, “My partners and I had lost interest and were fed up with other social networks — exhausted by ads, clutter, and feeling manipulated and deceived by companies that clearly don’t have our interests at heart.” According to Budnitz,“Facebook, Google+, Tumblr, etc. aren’t really social networks — they’re advertising platforms. They exist to sell ads. That’s it.” Ello’s policy is that they don’t believe that the user is a product, and have gone for no ads, which seems to have appealed to a lot of users for now. But that doesn’t mean Ello is running on thin air and good wishes. As this Gawker piece points out Ello did get VC funding close to $435,000 when they started in March, and given that this will dry up soon, they will have to raise another round pretty soon. The piece notes that while they are likely to raise the second round successfully the VC’s will expect some return, so if Ello does plan to continue, it will need to find a sustainable revenue-model. As far as Ello is concerned, it offers the same features as a Facebook or Twitter, you post content, photos, you talk to your followers, you search for interesting content, except that with Ello the emphasis is on the interface and according to Budnitz it is “designed to almost disappear — it’s very refined.” Interestingly where privacy features go Ello will let you choose between making your profile a public one, meaning that it would searchable even outside of Ello. Kind of like what happens with Facebook and Google Plus already, where your profile can appear on search engines. Like with Facebook, you can tweak this to say no and keep your profile private. Ello also has a little header image, the cover photo which is similar to what Facebook and Google and Twitter also offer, as well a round profile picture option. To get more content on your Ello feed you can start following people, which is similar to Facebook. You can put people in the Friend Zone or the Noise Zone. Noise is basically the equivalent of Ello communities, like the people who choose to follow on FB. As far as design goes, it is very fluid and smooth and has none of the boxes that you might be used to with Facebook and Twitter. But will Ello be a Facebook killer? The truth is that it’s very hard to say at this point. As noted earlier,  Facebook’s growth is slowing down and people are tired of the privacy issues drama that seems to play out each month. The only problem is that Facebook still has massive user engagement meaning that people are still sharing on Facebook, ironically even the news about joining Ello. As this Vox piece points out, from Path to App.Net to Diaspora, “there have been several startups that have tried to reimagine the social network,” but didn’t take off and they were trying to do what Ello is currently. Ello’s true success will depend on how well it does after this phase of hype. What sort of user engagement Ello sees a year on from now will define its success.