This lecture looks at how Ning, the Marc Andreessen Social Network company initially started with a Freemium model but later switched to a fully paid subscription service
4. Timeline
2004
- Founded 24hr Laundry
2005
- Launched platform to create social apps
2006
- Pivot to focus on 3 apps: Videos, Photos, Groups
2007
- Ning launched based on combining these apps
2009
- 1M social networks
2010
- 2M social networks
- Jason Rosenthal takes over as CEO
- Free -> subscribed
2011
- Bought by Mode Media (formerly Glam)
7. Funding
Unknown amount - Series A
- Jan 1 2007…(possibly earlier)
- Investors: Marc Andreessen, Reid Hoffman, SV Angel
$44M Series C
- Jul 1 2007
- Investors: Legg Masson
$60M Series D
- April 1 2008
- Investors: Allen & Company
$15M Series E
- July 1 2009
- Investors: Lightspeed Venture Partners
Total: $119M
8. Platform for building
Social Apps
Toolkit for building and hosting social network
applications
Build your own Facebook, Linked-in, Myspace
Underlying functionality
- User accounts
- Friends
- Blog posts and discussions
- Messages
- Photo, Video and music sharing
Mix and match and add your own
10. Pivot
Hosting other people’s code is hard
- Poorly written code hard to control
More interest in the application than in
developing
After several years of not being a social
network company…
Ning was born, a provider of social networks
11. Product turning points
2007
- Ning launched
2008
- Shut down API
- Ban Porn
2009
- Ning as a hub
13. New CEO
2010 Jason took over
Changes
- Laid off 40% team
- Move to paid
- Building subscription
business
Jason Rosenthal
14. Ning bought by Glam
Media
Tech-crunch estimates they paid $150M
Glam (now Mode) Media
- Advertizing
- Specializing in the long tail
- Potential monetization engine for Ning
Ning 3.0
- Relaunch of subscription product
- Totally new user experience
16. Early Freemium
2007 Premium Services
Place holder
- Show users they would
have to pay for something
someday
Created two classes of
customer / user
Plus additional
monetization challenges
down the line
21. Why Subscription?
Ads
- Best inventory sold
- Hard to target the log tail
- Hard to identify brand-safe content
Value conflict
- Free sites – maximize page views
- Paid sites – want control
User generated content policing
- Costly and risky
22. How did the new model
fair?
Only lost 15% of traffic
- Although millions of networks
Careful management of customer
communications paid off
26. Successes
Successful product
- Rapid growth
- Diverse and fascinating use-cases
- People loved it
Scale
- In the top 20 websites in the world
Hot area
- Social networks
$119M funding
27. Challenges
Too many pivots
- Long-time users fatigued
- Flip-flopping on white label
Limited cross-site network effects
- Each Ning was an island
- Tried to fix it but failed to find the right product
Building communities is hard
- Not just a technology problem
- Needs an “abundance” approach
Market perceptions changed
- Early on Social Networks were being discovered
- Today: Facebook + Twitter
- Harder to create mindshare foothold
28. Lessons – Scale isn’t
everything
Internet scale does not guarantee monetization
Ning had scale, engagement and growth
Still failed to succeed at Monetization
29. Lessons – Think Ahead
It pays to think about Monetization early
Sold premium ad inventory
- Worth $1000’s per month
- For $19.99
Hard to put the Genii back in the bottle
Early paid networks include Marquee VIP
customers
30. Lessons - Pivots
You only have a small number of pivots – use them
wisely
Hard to bring existing customers along
Each pivot reduces user faith
Bigger you are the harder the pivot
Be lean
- Treat each model as an experiment
- Understand clear criteria for success
- Pivot early
- Fail fast
31. Lessons – Network Effects
Network effects
Double viral loop
- Networks pull in users
- Who create networks
However
- Unable to leverage cross site traffic
- Each site had to build its own following
- We needed something like the Tumblr model
32. Lessons – Two Customers
Paid and Free users in opposition
Different user segments
Different expectations
- White label
- Ownership
Early premium offer created more problems
than value
33. Lesson – Customer
Expectations
Manage Customer Expectations
Move from Free to Paid managed well
- Consultation with customer council
- Overall transparency
- Advanced notice
Creation of Paid customer segment
- Created unreasonable expectations
- Charge was way too low
34. Summary
Ning history
Monetization
Analysis
- Successes
- Challenges
- Lessons
Disclaimer: My view only based on limited info…