Ello: the social network with investors and no revenue model

You may have heard of Ello. It's a new social network with no users and no revenue model.

OK, so it does have a fair amount of users and it continues to grow rapidly by invite.

The curious thing about it, though, is their claims that:

  • they'll never have adverts
  • they'll never sell user data

They have investors. They wouldn't have investors if they didn't have a plan to make money down the line once they've grown their user base.

The way I see it they have two options.

  • Charge users to use the service.
  • Charge for premium features.

The former would likely not be accepted by their users, who would disappear in droves.

The latter poses an interesting challenge: how to create premium functionality for a social network site that doesn't offer its users much in the way of added value compared to the others.

LinkedIn charges for its premium accounts but the difference there is that LinkedIn premium users are directly realising added value by having premium accounts. They wouldn't subscribe otherwise.

People are used to seeing adverts on things they've not paid for, from radio through to TV, websites and mobile apps and games.

Satellite/cable subscribers and Hulu Plus users (but not Netflix users!) are also familiar with seeing adverts despite having paid for those services.

For Ello to be able to charge enough to run its servers and satisfy its investors based solely on not having adverts would be quite an achievement.