GigaOM » Dalton Caldwell

The internet of BBQ: GigaOM hits SXSW

Tom Krazit — Sun, 10 Mar 2013 17:59:50 +0000

If you like technology, brisket and huge crowds of harried people, there’s no better place to be this weekend than SXSW. We’ve got five of our writers on the ground dodging raindrops and wacky startups in Austin, Texas, and here’s what they’ve found. (Check out this post for an idea of what we expected going into the legendary event.)

Thursday, March 7th

Friday, March 8th

Saturday, March 9th

Sunday, March 10th

Monday, March 11th

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Dalton Caldwell on our software choices: You are what you eat

Eliza Kern — Sat, 09 Mar 2013 23:11:51 +0000

Dalton Caldwell knows that a lot of people are doubting his future with App.net. But Caldwell? He’s not stressing over picking the harder path.

Dalton Caldwell talks about his App.net project on March 9 in Austin at SXSW.

“It’s important to question assumptions about why things are the way they are,” the entrepreneur said Saturday in Austin at SXSW to the crowd in his typically passionate style.

And Caldwell knows the road less traveled. After previous ventures in both an ad-supported music startup and a photo-sharing site, he launched App.net, a paid developer platform (that was commonly but mistakenly referred to as the “paid Twitter”) last summer to much fanfare.

Caldwell has been working since then to make something out of his pledge to grow a network where people pay for — and own — their data. “I think that you are what you eat,” he said.

But just a few weeks ago, Caldwell surprised some people when he announced a free tier to App.net, which seemed at first antithetical to the idea behind the service. But Caldwell pointed to business models for Github or Dropbox and said a freemium tier can be highly profitable when done right.

“I don’t think people will use software because they think it’s good for them, or that it’s better,” he said. “But my approach is that we will make better software that people will want to use.”

Caldwell said immediately before launching the free tier App.net had 32,000 paid members, and now just a few weeks later, they’re at 51,000 total users, both paid and free, which he thinks has big implications for convincing developers to build for the platform.

While it was initially called a “paid Twitter” by a good number of people, Caldwell has repeatedly emphasized that App.net is actually a paid developer network that can serve as a platform for a lot of different apps (think Amazon web services or the plumbing and infrastructure people build their houses on.) Some developers have questioned whether they’d ever use those services if the average user membership to App.net itself is so low (just imagine the contrast with Twitter’s 200 million active users). But if a freemium tier can attract some more people, it could grow the audience and thus give credence to Caldwell’s idea that social networks should find a way to support developers and do right by the user.

“Like, if Vine users can’t find friends with Facebook, that sucks. It’s stupid. It’s only to protect business model interests,” he said, of Twitter’s decision to protect its social graph. But then again, Caldwell knows that the path for Twitter, which is ad-supported, is not easy.

Someone asked how Caldwell would have negotiated Twitter’s relationship with third-party developers this summer if he himself were a Twitter employee. Would he have done things differently?

“I’m not sure I could do anything different if I were in his shoes,” he said.

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Dalton Caldwell’s experiment with a paid social network is going free (sort of)

Eliza Kern — Mon, 25 Feb 2013 18:00:37 +0000

Since he hit his fundraising target and launched App.net back in August, there have been few more vocal advocates for paid social networks and products than entrepreneur Dalton Caldwell. You and your data are not the product we’re selling to advertisers, he promised his backers and audience, as part of an experiment to see if users will pay for quality and ownership.

But when Caldwell’s “audacious proposal” of a paid social network opens its doors on Monday at no cost to users who receive invites from existing members for a freemium membership, it will no doubt raise questions as to whether Caldwell’s notion has failed. Critics will surely point to low membership numbers as evidence that Caldwell simply had to open his doors to stay relevant, and might say that providing the service for free totally invalidates Caldwell’s central premise.

However, Caldwell argues that companies like Dropbox and Github have proven that you can grow a successful financial model based on a freemium membership tier, and adding those free users won’t ruin his central premise that users want pay for quality (users will still need to upgrade when they hit storage limits on free accounts). His primary reasoning behind the decision to introduce a free tier is that he’s built a decent-sized network of developers and apps so far, and now it’s time to introduce users to those apps and grow the scale of the entire thing.

“In terms of the grand experiment there was a huge chicken and egg problem. The question is, do you get users first or do you get apps first? So I think the apps ecosystem is really nice and really healthy,” he said. “What’s exciting is that that part of the experiment has worked nicely. So now, let’s start seeing what happens when we ramp up distribution.”

Central to the App.net premise was that developers of the most popular apps would then make money by taking a cut of the membership fees based on the popularity of their products. But the problem is that there aren’t enough paying members so far to support the developers in any meaningful way. As developer David Smith pointed out in a prescient blog post on App.net pricing, it’s not that realistic that an App.net developer would make money off the system — a fact that Caldwell said he understands at the moment.

“The current size that we are at is not enough to sustain the developers building for it. We are aware of that. But we are working on it, and we have been working on it,” he said. “I’m not sure a one hundred percent paid thing would ever get monstrously large. And the paid services that work tend to either do lots of advertising to promote it like Netflix or they have a free tier and they don’t do advertising.”

So on Monday, existing users of App.net will be able to send invitations to potential new users, who will be able to check it out without paying. (The full details of the changes and new plan are explained on the company’s blog.) And as for Caldwell? He’s excited to see how it’s received.

“I’m excited because, look, this is still a grand expeiremnt. We don’t know if the grand experiemtn will work. But what’s exciting is that in startups it’s all about making it to the next stage. You always have to look one step ahead. And to me this is one step ahead.”

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App.net to launch file storage API so you can host your own photos

Eliza Kern — Mon, 28 Jan 2013 18:30:57 +0000

Needless to say, photo ownership is a sticky topic. Just ask all the people who left Instagram in December over Instagram’s terms of service and the question of photo ownership and rights.

So not surprisingly, one of the biggest champions of personal data ownership and paid services when it comes to social networks is forging an experiment in file storage and ownership. Dalton Caldwell plans to announced Monday that App.net will be launching a file storage API, giving each of its existing users 10 GB of file storage space connected with their accounts, so they can personally host their own photos and files and then authorize App.net apps to access those files.

App.net launched in the summer of 2012, and it’s still a little unclear exactly how Caldwell’s vision for the network is going to play out. He is currently committed to a paid network strategy where users have access to all the apps created on top of the App.net API, including everything from group texting apps to a network that looks pretty much like Twitter. Developers are paid from users subscription fees based on the popularity of the apps developers build.

Central to Caldwell’s thesis is that a paid network creates more value for the developers and gives users more ownership over their data and information. For instance, if you have an Instagram or Flickr account, you upload photos to the services which are then hosted on those companies servers even if you retain copies of the photos yourself. With App.net’s storage API, you would host your own photos in the cloud, and give authorization to different apps to access your photos (just as you give an app access to photos on your iPhone’s camera roll, for instance.)

“It’s like your personal Dropbox,” Caldwell said. “You want to maintain the originals and feel like they’re yours.” He noted that allowing for photo and file apps will be an important part of growing the App.net developer network, which is now fairly focused on text-based apps.

Caldwell said he thinks moving into photo and file storage will provide App.net developers a good deal of flexibility in what they design with the service’s API, and moves App.net into a potentially more useful and lucrative area for both users and developers.

“It’s an attempt to get away from some of the downsides of a siloed data storage,” he said.

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Makers of popular Twitter client Tweetbot take their skills to App.net with Netbot

Eliza Kern — Wed, 03 Oct 2012 19:24:31 +0000

App.net, Dalton Caldwell’s proposal for a open developer infrastructure based on a paid model of users, won yet another note of approval Wednesday with the news that the makers of Tweetbot have developed an app for the network called Netbot. While App.net hasn’t hit anything close to mainstream popularity yet — and isn’t necessarily aiming for it right now — the fact that the Tweetbot makers have turned their talents to an App.net client just serves as further validation that Caldwell’s efforts could have staying power.

The developers behind Tapbots have created one of the most critically-acclaimed Twitter clients, Tweetbot, that users have praised for its clean design and useful tools. However, the popular app’s days are probably limited, with Twitter cracking down on third-party clients and limiting just how many new users will be able to register with Tweetbot going forward. Netbot for App.net looks much like the Tweetbot for Twitter app, with minor differences. Netbot is available for $4.99 on iPhone and iPad, slightly more expensive than the $2.99 Tweetbot for iPhone and iPad.

Caldwell introduced App.net this summer not as a “paid Twitter,” as some have called it, but rather as a paid developer ecosystem. While App.net looks very much like Twitter right now, it could in the future could take the form of games or search clients. App.net’s product is the infrastructure, meaning users and developers must pay for access and the platform, in contrast to Twitter’s product, which is the ad-supported content created by users.

Under Caldwell’s model, the pricing for entry is high, but once users join, developers are paid to produce useful, well-liked apps, which gives them the incentive to build quality products for the network and keeps App.net from competing with developers and building its own apps. Adding Netbot to the lineup of apps on Caldwell’s platform is a significant moment of validation that the system could take hold.

Right now, Caldwell is focused on bringing in paying users who will contribute revenue to the model and allow App.net to in turn pay developers, which explains the high price of entry (although it’s getting cheaper as the user base grows.) App.net hasn’t seen wide adoption outside of nerds and journalists at this point, but if those early adopters are paying and growing slowly, that’s okay, according to Caldwell. App.net as something like computers in the early days — nerds were the first adopters, but eventually average people started buying them to play games and run software.

The Tapbots makers explained in their blog post announcing Netbot that Caldwell’s user-centric model appealed to them:

We’ve been working very closely with App.net. Their goals of always putting users first resonates with what we believe at Tapbots. Even though App.net is currently a small network, we expect big things from them and are proud to be a part of the community.

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App.net lowers entry price and adds monthly option as membership grows

Eliza Kern — Mon, 01 Oct 2012 21:37:54 +0000

Coming on the heels of Thursday’s announcement that it would begin paying its developers based on user reviews, Dalton Caldwell’s App.net announced Monday that it will be lowering the price of entry for users on a yearly basis and add a monthly subscription option as well.

Caldwell launched App.net this summer as an “audacious proposal” that was commonly referred to as a paid version of Twitter, but actually serves as a paid developer ecosystem for the open web — think of it like the plumbing and infrastructure that supports a city, rather than the actual buildings, or content. App.net initially charged $50 for a yearly membership, which some people criticized for being too expensive and exclusive. However, Caldwell has maintained that the high initial price was critical to keeping App.net sustainable and appropriately scaled, and had said they would drop the price once membership grew.

Now that the service has almost hit 20,000 members, users will be able to join App.net for $36 per year or $5 per month. There is an adjustment available for current members who paid the initial $50 price. Caldwell noted in the blog post Monday that the initial price was based on a user base of 10,000, so the shift to a lower price makes sense.

Caldwell’s theory is that by charging a price proportional to the size of overall membership, App.net can return some of the money to developers to keep them building for the service. Users will be able to rate and review their favorite apps on App.net, and those developers will be paid accordingly. This system is meant to be the opposite of a content distribution system like Twitter, which does not pay its developers and is closing down the third-party ecosystem to support revenue through advertising.

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App.net developers to be paid based on strength of user reviews

Eliza Kern — Thu, 27 Sep 2012 20:17:17 +0000

Dalton Caldwell’s audacious proposal for a paid, open developer ecosystem called App.net has already started shaking things up in Silicon Valley, as Caldwell tries to capitalize on developer frustration with Twitter to propose a new business model for an information system. While App.net remains fairly new at this point, Caldwell took another step further in pushing the envelope Thursday, announcing an intriguing new way for developers to make money under App.net’s structure.

Beginning Oct. 1, developers writing apps for App.net will be eligible to participate in the “Developer Incentive Program,” which will financially reward those developers who are creating the most popular and valued apps as determined by those app’s users, bringing revenue back to both the original platform and the developers who write for it.

In a blog post Caldwell said eligible apps could earn a portion of $20,000 per month, depending on how popular their app is and how many total eligible app developers choose to participate. Developers don’t have to participate at all if they’re not interested.

In an interview last month, Caldwell explained the rationale behind the idea: In Apple’s iTunes app store, developers usually only get paid once — when the app is downloaded — not continually, unless they incorporate in-app purchases or advertising. For apps that are free or only charge an initial download fee, the developers aren’t paid based on how much the users like or value the app over time, Caldwell argued.

With App.net’s program, users will provide feedback on the apps they use and like most each month. App.net will then proportionately allocate money to the developers from the App.net yearly membership fees (currently $50, but that could change). It’s like if you could take your monthly gym membership dues and tell the gym which pieces of equipment you want them to spend your money updating and repairing.

In the blog post explaining the incentive program, Caldwell noted that the system is subject to intimidation from developers asking users for good reviews, and developers who do so will be booted from the program. And presumably App.net will need to continue signing new members to provide the platform with revenue to distribute, although based on how quickly Caldwell met his initial sign-up goals, this might not be a problem.

This post was updated at 11:57 AM PT on Friday after the company clarified that all eligible developers building for App.net could earn a portion of the $20,000 per month, not $20,000 individually or per app.

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Think App.net is just a Twitter clone? Then you’re missing the point

Mathew Ingram — Mon, 13 Aug 2012 18:35:53 +0000

Much of the coverage of App.net — the ambitious project from entrepreneur Dalton Caldwell that just raised $500,000 through a Kickstarter-like crowdfunding campaign — has focused on the idea that Caldwell is building a “paid version of Twitter.” That has led a number of critics to complain that no one wants an alternative to Twitter and therefore App.net will almost certainly fail. But whether it succeeds or not, the idea behind the venture is actually much bigger than just building a paid Twitter clone. What Caldwell wants to do is create what he and others think Twitter could have been before it decided to become a global media entity: namely, a unified message bus for the social web, or a way of tying together multiple apps and services into a single real-time information delivery system.

This is a much more ambitious goal than just cloning Twitter or duplicating some of its features. And while Caldwell has beaten many people’s expectations by even getting funded in the first place, it remains to be seen whether enough users and developers will be willing to pay for the service to make it an effective resource — especially since similar efforts to create an open ecosystem for the social web have mostly failed. Are there enough supporters of an open standard to make a difference, or is the social web doomed to be a world of competing proprietary walled gardens?

App.net wants to be a platform, not just an app

Orian Marx, the creator of New York-based startup Siftee, does a good job in a recent post describing the difference between what the alpha version of App.net looks like now and the broader ambitions of Caldwell and his partners. What you see when you go to the site appears to be a very stripped-down version of Twitter, but with far fewer users and features, and that has led many to dismiss it as a short-lived clone — one that will die because it won’t be able to compete with the kind of network effects Twitter has developed (although Caldwell argues network effects can be a negative as well as a positive). As Marx describes it:

“App.net will combine the simplicity of cloud infrastructure with the power of web frameworks to deliver the best platform for developing social web applications.”

In other words, the alpha is more like a test case or prototype of what could be built by using the platform App.net is trying to construct — one that uses open standards such as PubSubHubbub and ActivityStreams and other protocols that make it easy to distribute information through multiple networks, as well as allowing users to find and “follow” other users, and other things that we associated with Twitter or social networking in general. One comparison would be to Amazon Web Services, which is a collection of tools like the Elastic Compute Cloud or EC2 that developers and companies can use to build services on top of.

Another way of thinking about what App.net is trying to do is to think about what email used to look like, or (for those who aren’t quite as old) what instant messaging used to be like. There were competing platforms and competing standards, and nothing like an open API or any of the other things we associate with allowing different services to exchange information. Users of CompuServe Mail couldn’t easily send mail to other mail-hosting services, and later on users of ICQ or AOL’s Instant Messenger couldn’t easily chat with users of other competing platforms such as Microsoft’s MSN or Google’s GChat.

As Albert Wenger of Union Square Ventures notes in a recent post about the potential benefits of App.net, what the social web lacks is a way of tying together various standards and protocols that allow anyone to integrate or exchange information easily with any other similar service — in the same way that anyone can send email to anyone else on the internet:

“It would a huge benefit to society if we can get with social networking to where we are with email today: it is fundamentally decentralized with nobody controlling who can email whom about what, anyone can use email essentially for free, there are opensource and commercial implementations available and third parties are offering value added services.”

Will the promise of an open platform be enough?

While Twitter has become a powerful information-publishing system and a kind of real-time newswire, it is still a private corporation with its own commercial interests, and as it expands its attempts to control more of its network — in order to monetize it more effectively — it is clamping down on the use of its API in ways that have caused friction with both developers and users. Much of the impetus for Caldwell’s project came from that dissatisfaction, and the feeling that Twitter at some point gave up on its desire to be an information utility and chose to become an advertising-based media entity instead. As one App.net supporter put it:

“[App.net] provides a solid API platform that is less likely to be yanked out from under our feet when the VCs get antsy and want to see a profit or acquisition.”

There have been other efforts to create a kind of open platform for the social web, however, and most have not ended well: one was an attempt to create a public standard for social connections called OpenSocial, which was driven by Google but designed to be an open protocol. Although the project still exists, it made very little headway, and was more or less doomed when Google recently killed off its Social Graph API. Rightly or wrongly, the project was seen as Google’s attempt to compete with Facebook — but its efforts have since been diverted to promoting its own Google+ network (which ironically still doesn’t have a fully open API of its own).

In some ways, Caldwell’s App.net also has similarities to FriendFeed, the federated social network that former Google staffers Bret Taylor and Paul Buchheit (one of the original developers of Gmail) created in 2007, which allowed users to pull in messages and updates from multiple networks such as Twitter, Facebook and Flickr. FriendFeed was eventually acquired by Facebook in 2009 for $48 million and Taylor became the company’s chief operating technology officer and one of the architects of its market-dominating “open graph platform.”

Will App.net ultimately wind up on the scrap heap along with other attempts to create an open social ecosystem, a victim of the market power of incumbents like Facebook and Twitter and/or the ambivalence of users? Or will it gain enough support to become a real alternative to the walled gardens that currently make up the social web?

Post and thumbnail images courtesy of Flickr users Rosaura Ochoa and See-ming Lee

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App.net financial backers show they’re open to a paid Twitter alternative

Eliza Kern — Sun, 12 Aug 2012 19:34:32 +0000

Is the world ready for a paid version of Twitter? Maybe so, backers have shown. Entrepreneur Dalton Caldwell’s Kickstarter-esque campaign to develop a paid alternative to the social network hit its $500,000 funding goal on Sunday, well ahead of Monday’s 11:59 PM deadline, raising questions as to what consumers really want when it comes to paid versus free internet services.

Twitter’s recent warning to developers that they’ll need to think twice before creating third-party Twitter experiences with the API has encouraged Caldwell and others to think about whether there’s room for an alternative service. Whether or not Caldwell’s efforts will succeed is still yet to be determined, but it shows both developer unhappiness with Twitter and just how far a Twitter alternative could go.

In a blog post, Caldwell thanked supporters for believing in his idea:

Thank you for believing. I know in my heart that what made join.app.net succeed was your willingness and openness to give App.net the benefit of the doubt, to read our github documentation, to ask to participate in the alpha, to write blogposts in our support. Thank you. We couldn’t have done it without you.

App.net was originally envisioned as a platform for mobile developers but morphed into a paid version of the increasingly ubiquitous social network, Ryan Kim wrote for GigaOM:

The product will offer a real-time feed and a social graph similar to Twitter available from a mobile application or website. Ultimately, App.net will support third-party apps built on top of the App.net ecosystem. Caldwell said the consumers aren’t given much choice right now in social startups, which are largely dependent on advertising for revenue. That leads to businesses that work to ultimately sell their users and their data to advertisers, he said. He believes there’s enough of a market for another business model that puts customer and their trust first.

Mathew Ingram has written for GigaOM on the relative merits of paid versus free but ad-supported services, noting that the biggest advantage Twitter has is its existing user base:

If you are a user, the main concern (I think) would be not just what kinds of cool apps you could use but also whether the rest of your social graph was using it. I have argued in the past that this built-in network effect is one of the biggest weapons Twitter has, as it is for Facebook and any other large-scale social service. Of course, App.net could integrate its network with Twitter’s, so that messages would flow through from one to the other (as they do from similar alternatives such as Identi.ca), but then all Twitter would have to do is kill its access to the API, the same way it did with a projectlaunched by Bill Gross’s UberMedia.

Users can still choose to back App.net for another 35+ hours, and for $50 can both show their support for the project and earn a one-year membership to the service, which will allow them to either “claim” their Twitter handle or choose a new one.

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Are you ready for a paid Twitter?

Ryan Kim — Fri, 13 Jul 2012 22:30:55 +0000

Dalton Caldwell, the man behind failed startups Imeem and PicPlz, recently ruminated on what he wished Twitter could have become. Now he’s moving ahead with his own paid alternative that promises to shun advertising and focus on customer trust.

Caldwell unveiled his big venture called App.net in a lengthy blog post Friday and kicked off a month-long Kickstarter-esque pledge campaign aimed at testing his theory about the need for just such a platform. He’s looking to raise $500,000 from 10,000 people, which he thinks will be enough money to get started and also validate his idea. App.net was originally envisioned as a paid service for mobile developers but has been repurposed to tackle this larger goal of creating a paid version of Twitter.

The product will offer a real-time feed and a social graph similar to Twitter available from a mobile application or website. Ultimately, App.net will support third-party apps built on top of the App.net ecosystem. Caldwell said the consumers aren’t given much choice right now in social startups, which are largely dependent on advertising for revenue. That leads to businesses that work to ultimately sell their users and their data to advertisers, he said. He believes there’s enough of a market for another business model that puts customer and their trust first.

Why isn’t there an opportunity to pay money to get an ad-free feed from a company where the product is something you pay for, not, well, you. To be clear: I’m glad there are ad-supported options, but why does that seem like the only option? For example, I have the option of buying a Mac if I don’t want to buy a crapware-infested PC, right? I have no interest in completely opting-out of the social web. But please, I want a real alternative to advertising hell… I would gladly pay for a service that treats me better. (Emphasis Caldwell’s)

App.net promises to never run ads or sell user data to advertisers. Users will be able to export, back-up or delete their data. The service will supposedly provide developers with a predictable business to build upon and will be focused on satisfying paying users and improving the experience.

Caldwell’s proposal follows a Kickstarter project from Penny Arcade, an online comics publisher, who is looking at replacing the revenue it currently gets from advertising with funding from fans. The two projects raise new questions about whether traditionally ad-supported services can build a viable model by charging users up front in exchange for a product that eschews ads.

I’d personally like to see new alternatives emerge though any competitor ultimately needs to get people in the door to work. 10,000 believers might be enough to get started but you have to recruit the masses to succeed and that can be hard when the experience on Twitter is still very positive for most people. People are increasingly aware that their “free” social networks are really making their money off users and their data. But for the most part, inertia, familiarity and data lock-in keep people from looking elsewhere. And App.net ultimately can’t just be an ad-free alternative, it will have to be better somehow, more compelling, with some kind of killer features or such a radically better design, to get people to switch.

So I’m not very optimistic about App.net’s chances. And the truth is, it may be hard for any big social network to become profitable, as Derek Powazek wrote today. But I’d like to see Caldwell take a stab at shaking up the current dependence on ad-supported services.

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