A Geek With Guns

Chronicling the depravities of the State.

The Importance of Business Models

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When Google announced that it was killing Reader I went on the lookout for a new Really Simple Syndication (RSS) service. During my quest I came up with several “must have” features including Reeder support (either current or upcoming), a decent online interface, and a coherent business model. The last requirement may surprise many people who sought a free service to replace Google’s free service but I didn’t want to again encounter the hassle of finding an alternative service anytime soon. I settled on Feedbin, in part, because the developed had a business model (at the come I signed up he charged $2.00 a month or $20.00 a year, now he charges $3.00 a month or $30.00 a year). Since the developer of Feedbin makes a profit from his service I doubt it’s going to go away anytime soon so it’s unlikely that I’ll have to deal with this:

Since we launched first public version almost a year ago up until March 2013 we have been working on The Old Reader in “normal” mode. In March things became “nightmare”, but we kept working hard and got things done. First, we were out of evenings, then out of weekends and holidays, and then The Old Reader was the only thing left besides our jobs. Last week difficulty level was changed to “hell” in every possible aspect we could imagine, we have been sleep deprived for 10 days and this impacts us way too much. We have to look back.

The truth is, during last 5 months we have had no work life balance at all. The “life” variable was out of equation: you can limit hours, make up rules on time management, but this isn’t going to work if you’re running a project for hundreds of thousands of people.

[…]

That’s why The Old Reader has to change. We have closed user registration, and we plan to shut the public site down in two weeks.

It’s unfortunate that the developers of The Old Reader felt as thought maintaining the site was, in their words, hell. But the part that made me roll my eyes was the following:

For those who would like to start the usual “VC, funding, mentor” or “charge for the damn thing” mantras — please, spare it. We’re not in the Valley where it might be super-easy, and, after all, not everyone wants to be an entrepreneur. We just love making a good RSS reader.

It’s true, not everybody wants to be an entrepreneur but it’s also true that working on a project is much more fulfilling when one gets paid to do it. I have a lot of hobbies, and they often cost a fair amount of money, but I put my truly useful skills, the ones that can be used to provider services that other people want, to work in a manner that makes money. Getting paid motivates me to do a good job and continue on with the job even during those times that it sucks. In all likelihood the developers of The Old Reader wouldn’t find their work hell if they were receiving a decent paycheck for their efforts. When Feedbin began to gain subscribers the service started to become slow. Did the developer quit because the complaints ate away at his soul? No, he improved the service because he was making money from his efforts. It was a win-win situation. He received money for his work and his users received a kick ass RSS service.

Business models are too often undeveloped in the technology field. Great developers create great services without having any workable strategy to monetize their efforts. This lack of foresight tends to have one or two results: either the service is purchased by a large service provider, such as Google, or the service is shutdown when the hassle of maintaining and improving it becomes too great.

If you create a great service don’t be afraid to ask for payment. It’ll work out better for both you and your users. Likewise, if you want to utilized a great service don’t get angry when the developer asks to be paid. It’ll work out better for both you and the developer.

Written by Christopher Burg

July 31st, 2013 at 10:00 am

Posted in Economics

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