Tag Archives: how does ello make money

(h)Ello or goodbye? What you need to know about Ello

This post is based on my experience with Ello so far (about a week), mostly as a non-posting participant. The aim is to give marketing professionals the key points about Ello, of course from my personal perspective. Opinions are mine. 

- Ello is not “the new Facebook”, the “Facebook killer” etc..

Of course, comparing and contrasting a new entrant in the arena with the world’s most famous social network is tempting for some of the media.  Also, it is true that much of Ello’s manifesto and its identity so far seem to stem from a reject of social media as corporate behemots (hello, F!) focused on capitalizing on users data. However, the reality is that the two are not even comparable by size and by nature. If nothing else because its target is vertical (people who are unhappy with “mainstream social media” generally fall in one specific demographic, whilst mainstream is universal by definition). In my opinion, Ello is far from constituting a threat to Zuckerberg’s creature but also a viable alternative for those with time and energy for one more platform. Let’s see why

- It is invite-only, but it’s growing fast

Reports are of up to 31k signups per hour, although each user is only allowed 5 invitations. Creating scarcity is a tried-and-tested marketing technique and Ello is no exception, generating a mild frenzy and even apparently a black market for invitations (I still have three of mine, if anybody is curious). The alleged reason is that the “servers” need to keep up with demand. Surely, the platform is still in its technical infancy and needs to iron out a few glitches and bugs if it want to expand further than the current limited, dedicated, on average tech-savvy user base of early adopters.

To put things in perspective,  other platforms such as Diaspora, AppdotNet , Path etc. also experienced a very high number of early adopters before stagnating and eventually dying off.

ello waiting list

- How does Ello make money? a “freemium” model

Of course, as of today, it doesn’t. But it will have to, and here’s what they say about it:

Very soon we will begin offering special features to our users. If we create a special feature that you like, you can choose to pay a very small amount of money to add it to your Ello account forever. We believe that everyone is unique and that we all want and need different things from a social network. So, we are going to offer all sorts of ways for users to customize their Ello experience.

So, Ello business model is meant to be “pay to unlock” – whilst access to the basic platform is free, users will be able to purchase “features”. It seems like a fair, well-intentioned plan: every time Facebook or Instagram introduce a new ad format, many users protest that they would “pay” for an ad-free version. In practice, I think it will be really hard to get a significant number of people to actually pay for social networking (even in the glorified “create and collaborate” Ello version), especially if the first impact with the free platform is not going to sweep them away. Which leads us to…

 - Ello’s user experience: not a Minimum Lovable Product (yet)

My own Ello user profile. As you notice, both cover and profile image are tilted 90 degres but i could not easily figure out how to fix the problem on my mobile so I gave up.

My own Ello user profile. As you notice, both cover and profile image are tilted 90 degres but i could not easily figure out how to fix the problem on my mobile so I gave up.

Ello’s UX and design are informed by the principle, as stated in the Manifesto, of “beauty, simplicity and transparency“. It certainly does look cool and trendy in 2014 web design terms; yet, some have called it a “design disaster”.

It is taking modern, fashionable design trends and applying it to a web application without any thought as to how it impacts usability and readability.

(Jeffry van der Goot, Medium)

Critics focus on its ample (excessive?) use of negative space, use of fonts and colour, mixed round/square graphic elements, annoying quirks (the “Ello smile” emoticon has no need for “:” , yet emoji are touted as one of the first upcoming features), confusing affordances, etc. Personally, I found it visually sparse, not intuitive and lacking on its very promise of being functional and beautiful. Sure, it may be that simply too many years of Facebook and Twitter and prompts had me brainwashed and I am wrong in thinking a user should be spoon-fed. But if I need to attempt three times to understand how to post and then discover I have to learn a few keyboard shortcuts to do things, frankly nobody ain’t got time for that. It does feel quite half-baked and clunky, and it does not have a mobile app for now.

As Italian digital expert Piero Taglia remarked in its interesting article about Ello,  a “Minimum Lovable Product” (as opposed to a “Minimum Viable Product” must be not just viable but also able to generate a positive first impression on early users – otherwise, there may not be a second chance for a “better” version later.

Also, I find the language and tone of voice is such a collection of hipster clichés it really grates me. The words “awesome”, “love”, “shit” and sparkling emojis are sprinkled liberally throughout, and the “about” section is called WTF. It’s so tongue in cheek it ends up sounding like a self-parody and it make me feel a bit ashamed of myself. In the middle of this general hippiedom, the harshness of the label “Noise” as the only alternative to the “Friends” list stands out a bit – plus, if it’s worthless noise, why would I want to have it on my feed anyway?

 - Who’s behind Ello and what’s the future looking like

For now, Ello has been build and launched by a small group of developers and designers with respectable backgrounds in arts and music – the most prominent being CEO Paul Budnitz and front-end developer and unofficial PR guy Justin Gitlin.

Sure, it is “ad-free” and state with a certain smugness that “you are not a product”, however, like all large scale Internet projects, it does not run on unicorns and rainbows but requires money.  Ello is backed by venture capital with an initial investment of $435,000 from FreshTracks Capital, a Vermont-based fund and this has been enough for some early advocates to say goodbye to Ello already, in the name of true independence.

ello new features

An email from Ello announcing improvements to the platform and new features

Conclusions: the ups and down of Ello

Ello is not posing a threat to Facebook or to any other mainstream social network; however, its very existence and the amount of attention it has attracted signals that there is (still) a space for “non-mainstream” social media. The question is – will Ello manage to transform that space into a viable market? For with all its revolutionary, pure intentions, Ello is a business that needs a plan to generate ROI – it may be with its users as paying “partners” rather than being treated as “products”, but still it needs to be a market. It may be that Ello will find its own niche of happy paying users – or maybe it will die off like Pheed or Path in the midst of growing privacy concerns (even now, their policy states that they “may” pass on your details to future partners) and users fatigue.

Quoting one of @scobleizer posts on Ello,

Most will not join for a while. It’s too sparse. But I’m sure it will find a niche. I’m already noticing that the Facebook-hater crowd is quickly coalescing here and advocating it. That will kill off Google+. […]

But it is a fresh start and we’ll see how far it goes. I don’t think anyone answering this question really knows. We need at least a month or two for the hype to calm down and for the real users to show themselves (and the real use case).

Are you on Ello? What do you think? I’d love to hear from you.