App.net: 'Good news, we've made money; bad news, we're all fired'
Subscription renewals will sustain site, but not employees
Ad-free social network App.net has clawed enough cash from subscription revenues to let it be "profitable and self-sustaining," – albeit without any employees.
The surprising news was disclosed by App.net chief Dalton Caldwell in a blog post on Tuesday. Though the post indicates App.net is in rude health, it is not quite strong enough to bear the weight of having any full-time employees anymore.
"Operational and hosting costs are sufficiently covered by revenue for us to feel confident in the continued viability of the service. No one should notice any change in the way the App.net API/service operates. To repeat, App.net will continue to operate normally on an indefinite basis," Caldwell wrote.
"The bad news is that the renewal rate was not high enough for us to have sufficient budget for full-time employees. After carefully considering a few different options, we are making the difficult decision to no longer employ any salaried employees, including founders."
App.net will employ contractors for support and operations, plus some new development projects, he said.
Along with getting rid of its full-time employees, App.net is also having to shut down its Developer Incentive Programme, which paid developers based on the popularity of their apps on the service.
When the service was announced two years ago, it was originally a pay-to-post social network, but in February 2013 Caldwell softened his stance and introduced free accounts in an attempt to bring more people into the site.
The hope was that the "freemium" model combined with robust developer community would let it became far more than a Twitter also-ran, and develop into something of genuine merit. That may still be possible, but it's going to have fewer resources, and as mentioned, can no longer pay developers cash for popular apps on the platform.
"If revenue rates start to tilt upward we would be excited to budget additional development resources," Caldwell wrote. "In any event, our intention is to have the App.net service continue to operate for as long as there are customers willing to support it."
Translation: if we get more money we might be able to have staff. Please stick around in the meanwhile.
"The market conditions that were the driving force behind App.net's creation have not changed," Caldwell wrote. Something that he appears to find reassuring but, given the news, we would find discouraging. ®
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