There’s been a lot of buzz lately about Ello, a new mysterious invite-only social network that’s based on the idea that people are sick of advertisements and having their information sold to those advertisers.
Flocks of people are moving from Facebook to Ello. So many people are requesting invites, in fact, that SFist reported on Thursday that the site temporarily shut down invites because it couldn’t keep up with demand.
Ello’s arrival onto the scene is perfect timing, especially for people affected by Facebook’s “real name” policy. Facebook is now requiring people use their legal names on the site, in an effort to “keep our community safe,” but many users, — including drag queens and others who might be affected by this policy — are arguing against having to use their legal birth names.
That’s where Ello comes in. People can use whatever name they wish on the site, which is still in closed beta.
“Yes, we’ve been hearing about the Facebook drama, too, over the last few days,” the site’s creator, Paul Budnitz, told the Daily Dot. “Ello welcomes the LGBTQ community and we’re very excited to see so many people moving over!”
Ello hopes to make its money using a fremium model: Using the bare-bones site will be free, but if you want any embellishments (perhaps more profile templates, or other personalisation features), you will have to pay. It says it will never run advertisements or sell your information.
But Andy Baio, tech blogger and cofounder of the XOXO Festival, thinks this might become problematic in the future.
He found that Ello actually raised $US435,000 in a seed round from Vermont-based FreshTracks Capital.
“VCs don’t give money out of goodwill, and taking VC funding — even seed funding — creates outside pressures that shape the inevitable direction of a company,” he writes in a blog post on Ello. “Before they opened their doors, Ello became hooked on an unsustainable funding model — taking cash from VCs — and will almost certainly take a much larger Series A round once that $US435,000 dries up. (Which, at their current burn rate, should be in a couple months.)”
He says VC backers aren’t like Kickstarter backers, who just want to see the product being made. VC investors spend money on a product because they want a return on their investment. He says Ello will “inevitably be pushed towards profitability,” even if it goes against the original core principles of the site.
Mike Woolson, a drag queen based in Oakland, California, says that right now, Ello is reminiscent of Tribe, another social network that was popular with fringe communities.
“I certainly see a lot of my friends posting their Ello IDs on Facebook so people can contact them,” Woolson says. “It seems like it’s appealing more to the malcontented than the masses, but it’s a rapidly evolving situation.”
But Tribe fell out of favour with fringe communities after it changed its policies on sexually explicit content.
Budnitz told BetaBeat that the site is not only ad-free, but also “porn-friendly.” If it can maintain the influx of people, while sticking to its “no ads” policy, there might finally be an alternative to the mainstream social networks that already exist.
“Like everyone else here, I hope Ello can stick to their principles, resist outside pressure, fight market forces, and find a unique and sustainable niche,” Baio writes. “Let’s hope their investors feel the same way.”