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Comment by dalton | Hacker News Reader

In my announcement of this project, I argued that Github & Dropbox are the best examples I can come up with as examples of healthy, innovating platform companies.

I believe our approach is different in that App.net customers are developers+members paying for a service that is provided. This is different than customers being advertisers, and developers+users being treated as a product, or at worst collateral damage.

I think this all boils down to business model choices and financial incentives: http://daltoncaldwell.com/an-audacious-proposal

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Both Github and Dropbox offer a free plan plus they don't need the network effect. If I were the only user on Dropbox I would still find it valuable. Same on github.

However the service you are proposing does have a huge network effect. Twitter/e-mail without users is not valuable.

So whats your plan to get to a million paid users?

NOTE: Pandora had about 71 Million on October 2010 but only about 700,000 paying users. So not even Pandora has been able to get to 1 million paying customers. Just look at the financials. 14% of revenue came from paid users and 84.6% came from ad's. Which supports Fred Wilson point that the majority prefers ad supported services.

I am going to support App.net. I still want to see you try. But I am afraid you don't really have a good answer on how you plan to build the network and Fred Wilson is trying to warn because you will probably fail. But something tells me you don't care if you fail, thats why I'll support you.

I think you're wrong to suggest that having developers and users as paying customers qualitatively changes the conflicts between platform users and platform owners.

Even with paying customers you still face conflicts like:

- conflicts between serving different groups of customers (e.g. IIRC, contractors often complain about Github's pricing because it is more adapted to enterprises)

- conflicts over whether or not specific features are part of the core platform (Microsoft and Apple routinely run into this - and virtually all of their users and developers are also paying customers)

- conflicts over priorities/roadmap and so on

At best, having developers and users as paying customers is an additional weight on the same underlying scales.

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