Ello, the self-proclaimed “Anti-Facebook”, has gained much virality over the past few weeks. After discussing this new social network in class, my curiosity was piqued and so I decided to do some research myself.
There are several things that are helping the site generate buzz:
- It is currently invite-only, and exclusivity breeds curiosity. Ello is reporting 40,000 sign-up requests coming in per hour.
- Its manifesto promises zero ads, no data-mining, and most of all, no turning users into products. It aims to be “simple, beautiful, and ad-free”.
- The site will be free for basic users, with one-time costs for premium features that can be added at the user’s discretion.
My biggest concern isn’t with its interface, its exclusivity, or its functionality. My problem is with Ello’s value proposition. What is Ello’s competitive advantage over other social networks? Its promise of being an ad-free experience. But can it stay ad-free? Where is the revenue going to come from? According to Gawker, Ello secured $435,000 in venture capital funding earlier this year. There will certainly be pressure from their investors as well as internally to make money.
It is near-impossible for a digital entity to remain 100% ad-free, as this makes up the bulk of the revenue streams for most companies. At the end of the day, it is a business, and every business has a bottom line, and stakeholders to keep happy. Their introduction of new premium paid features demonstrates their intentions to keep the site ad-free, but can one-time costs by an unknown percentage of users really generate enough money to keep the site afloat?
This is a story in development- the digital world will most certainly keep its eye on Ello to see what it’s next moves are.