Social networking: all about the money

An interesting topic comes up at almost every session of Pitch Practice, when we’re going through the six key elements of the 30-second pitch:

  • Name
  • Company name (if you have one yet)
  • Problem you’re solving
  • Solution to the problem
  • Who’s your customer
  • Ask

When we get to “who’s your customer”, many entrepreneurs have not yet been able to articulate the difference between a customer and a user.  I teach the difference using the Facebook example.  Facebook has north of 1.3 BILLION users, but who are Facebook’s customers?  Who pays Facebook money?  Advertisers.


And when a company grows and changes and expands, who is that company loyal to? Its customers.  Who pays the bills? Customers.  Who is Facebook beholden to? Its customers, the advertisers. Not us, its users. Yes, I am a Facebook user; have been since 2008. I really like Facebook for keeping up with friends and sharing personal life events.  I do have a pretty thick line between my friends on Facebook and my LinkedIn and Twitter worlds, though there is some overlap.  That said, I will say that I like Facebook less and less each day, and I’m not alone. Furthermore, I firmly believe that many users’ distaste for the Facebook user experience stems from the fact that Facebook is primarily serving its advertisers by organizing and displaying my “timeline” and UI for the sole purpose of generating more advertiser revenue.  My biggest complaint about Facebook as it moves more and more towards mobile is that, on my mobile device, the default is “Top Stories”, rather than “Most Recent”. In other words, Facebook will show me what Facebook wants me to see, not what I want to see. Yuck.


But, as per the title here, it’s all about the money. Facebook is a publicly traded company, secondarily beholden to its stockholders, and they’ve done very well.  Twitter just announced a “Buy” button, which will allow you and me to make an ecommerce purchase from within a tweet, because most people on social networks make the majority of their purchase decisions based on the opinion of those they trust within their social networks.  It’s the easiest way to get feedback in our super-sized, fast-food, gotta-have-it-now culture.


Enter Ello, the “anti-facebook” social network, “Simple, beautiful & ad-free,” because “You are not a product.”  Apparently, Ello has hit a nerve in the social networking world. At last report, Ello is getting tens of thousands of invite requests per hour since they published their Manifesto.  Good!  Competition is awesome and forces everyone in the game to UP their game, including Facebook.


But, as per the title here, it’s all about the money. So how will Ello make money?  Keep in mind, that as a business, if you don’t make profits, you die, unless you’re a “green” business founded in the last 6 years or so, but that’s another rant, though also “all about the money.”  I can see from the opening page that Ello is already showing you who ELLO wants you to see.



Ello is currently by invitation only, a la Google’s previous products, namely GMail, which causes a perceived exclusivity, making the offering seem more and more inviting.  I am curious to see what Ello’s play will be, and how they will continue to grow as the “anti-facebook” without serving up ads.  Because, remember, if you don’t make a profit, you die.  And when you take on the 1.3 Billion user behemoth, you had better bring your A-game, and a few billion dollars, to the fight.  From what I hear, Zuck can be pretty competitive.

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