Hyperbolic headlines heralding a mass exodus from Facebook to Ello gave way to tears and rending of cloth on Thursday when it became clear the shiny new social network does not, in fact, fart unicorns and rainbows. Though celebrated as the scrappy band of gay rebels to Facebook’s Darth Vader, Ello is a business. And like everything else in a capitalist society, it requires money.
Ello, the alleged Facebook-killer that doesn’t want your real name and says it will never ever sell your personal information or show you ads, may be forced to renege on its promises, Andy Baio suggested in a post on the very social network he questions.
Ello, Baio posted, didn’t materialize from a founder superhug of goodwill, but rather received $435,000 in seed funding from Vermont-based VC firm Fresh Track Capital. (Technically, what we know at the moment is that Ello notified the SEC that it had sold $435,000 in equity to an unknown party a few weeks before Fresh Track announced an unspecified investment in Ello. Dots, connected!)
“Unless they have a very unique relationship with their investors, Ello will inevitably be pushed towards profitability and an exit, even if it compromises their current values,” Baio wrote in a post viewed more than 68 thousand times.
Dragged Into The Spotlight
With timing on its side, Ello hit the spotlight just as a vocal number of drag queens and transgendered people got the boot from Facebook, victims of the social network’s latest iteration of its long-standing real-name policy.
This alleged haven for a small percentage of the population exploded in popularity like the latest iteration of “Tickle Me Elmo,” at Christmas. Ello processed more than 34,000 invite requests an hour on Thursday alone, the site reported. Yet none of its financial responsibility is disclosed on the site. You won’t find it anywhere its anti-Facebook manifesto, which insists, “You are not a product.”
“We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate—but a place to connect, create, and celebrate life,” the manifesto reads.
Like Exxon’s claims of saving polar bears or the long-running gag on HBO’s Silicon Valley about start-ups that “make the world a better place,” do-goodery has long been a marketing tool. For realists, Ello’s lack of disclosure and transparency (a criticism Facebook’s long weathered) is telling, along with the obvious fact that the cash has to come from somewhere.
Freemiums is how Ello plans to make its money, charging users for premium services. “If you think about the gaming industry, the freemium model is not necessarily a problem, it just hasn’t been applied as much to social applications,” Fresh Track Capital’s Cairn Cross told GigaOm’s Carmel DeAmicis in an interview. “We think it will work.”
Without the dopamine brain dumps that fuel gamers to drop thousands of dollars leveling up on Candy Crush or Kim Kardashian: Hollywood, it’s hard to envision how Ello will inspire financial support. Internet users expect everything for free, and we don’t go to Freecycle to get our social networks.
Money, Get Back
The only way Ello can remain your adorable Lisa Frank-draped social network experiment is if only a handful of people use it. As a company gets bigger, the ravening beast needs to expand. And that’s hard to do without cutting ethical corners.
When Google said that it didn’t want to be evil, it probably meant it. But inevitably, the short-term profit incentive rears its ugly head. Those who abandon Facebook for its perceived evils will, by necessity, encounter something different, but equally distasteful on Ello. Sure, you can be Princess Candy Apple, but don’t be surprised if you have to pay up to Ello-friend your mom.
Maybe Ello isn’t the Beanie Babies of social networks, and it arrived at the right time in an Edward Snowden-influenced history when we’ll sacrifice Network Effect for promised privacy. Ello may very well be the next Facebook, and if that’s the case, it’ll be the next Facebook in more ways than one.
Lead image by Vic Mullin