January 13, 2009

Does a Service Need a Business Model to Have You as a Customer?

Yesterday, following on to our discussion from earlier in the month on what further efforts FriendFeed could make to attract and keep new users, a commenter wrote:

"I'm a little nervous about investing a lot of time and effort in, or become reliant on, a product that has no business model - whether it's FriendFeed or Twitter. Sure it has plenty of VC money, but who knows when they'll pull the plug."

Given the uncertainty we've all seen in the greater business market, and with Silicon Valley in particular, there is no question that some Web services are in dicey positions. Pownce recently closed after its acquisition by Six Apart, and users weren't given a whole lot of time to extract their information. So, for some, it makes sense not to take a risk with their time and their data.

I tend to be of the opinion that as consumers, we should use those products that give us the best experience, community or enable us to do things that no other sites do. I feel that it's not typically our role to choose what sites are going to be successful and which ones are not. We don't always know the financial underpinnings of a company. We can't forecast whether something will succeed or fail. And often, if you like a product, so will many others like you, meaning that if the time comes to eventually shut the site down, there will be a buyer, and more likely than not, the service, and your data, will be retained.

As much fun as it can be for us to try and predict if Twitter will go mainstream, and much of the conversation in the echo chamber today was around the company's hiring of a new business development manager, seen as the first step toward getting revenue, I don't really care all that much what these companies' business models are - so long as my data isn't being sold or manipulated, or ads don't obscure the product itself. But that's my less conservative side showing - and maybe my position is wrong.

Have you ever liked a product, but steered clear of it because you didn't want to get attached in the event you might later have a costly breakup?