In May of 2008 Fast Company put Gina Bianchini on the cover and heralded the "infinite ambitions" of the social network builder NING. The article called NING a "Perpetual Growth Machine." Ouch. One month ago Bianchini stepped down as CEO, and yesterday NING fired 40% of its workforce and announced it was killing the free community building platform -- moving to premium services.
There's no doubt that the decision NING made is going to make some folks hopping mad. Pulling the plug on a popular, growing, vibrant free community product couldn't have been an easy decision. But does this really mean that 'Free' doesn't work?
Before we theorize about the whys and wherefores, let's take a moment to point out just how many things NING did right.
1. Small Is Beautiful. From the very beginning, NING was conceived to embrace, support, celebrate, and power small communities. While lots of media folks were looking to embrace big media, Marc Andreessen and Gina Bianchini were out front in understanding that the very nature of the Web was empowering groups with shared interests, making possible the creation of communities with shared sets of interests that were often geographically diverse. Creating user-friendly tools for these groups reflects Marc's deep understanding of the Web. Not surprising, given the fact that he built what would be the very first software that facilitated the graphical Web that has grown to be a central part of our lives. NING was in its conception, very clearly tied to the early ideas of Mosiac and Netscape Navigator.
2. If You Build It They Will Come. NING was in many ways a peer to Facebook. And while Facebook's decision to focus on college students gave it a fast start that turned out to be rocket fuel, NING's focus on a multitude of smaller groups and the need for those groups to have more control over function, features and feel was spot on. NING is for groups something that Facebook is not. And that's a good thing.
3. The NING ID Concept. While lots of folks, I for one, didn't understand the NING ID when I first encountered it, I can tell you now that I certainly think that identity and the issues around multiple log-ins are significant. Facebook appears to have made this work, creating what is rapidly becoming a "single-sign-on" solution for social media. Will Facebook be the final winner, hard to say -- but NING had the idea first and stuck to their guns.
4. Porn. Back when everything was about "openness" and platform providers were turning a blind eye to porn, Andreessen first took a "pro-speech" stand, and then a position that was certain to get him serious grief from free-speech loyalists. He stood up, made a decision, and banned porn from NING. It wasn't a popular decision, and some cried censorship, but Andreessen's position was that platform providers could have standards, as long as the enforced them evenly. He was right.
... and finally
5. Gina. There are far too few women CEOs in tech, and while I've got no inside knowledge of how Gina and Marc together funded and launched NING, Gina was an important icon for women in tech, and I for one look forward to seeing her heading up another company soon.
So, what does this mean for the "Free" model? Matt Bowman of Vator.TV put that very question to Chris Anderson, the Author of "FREE" who responded:
"Freemium is no silver bullet, and like all business models there's risk associated with not getting it right. I'm a huge Ning fan (and a paying customer) so I support this move. Freemium worked well to get them to their current size (large and growing) and I don't blame them for focusing on their paying core now. Now that they've reached critical mass, they may not need the free components anymore to get awareness."
NING has proven the need for community's platforms on the Web, and no reasonable person should diminish that accomplishment. But that success alone don't tell the whole story. They've made some mistakes too.
From my somewhat biased POV in the platform provider space here are the things I think that Marc and Gina would say in hindsight they wish they'd done differently.
Money. They raised too much. The problem with being a Web rockstar is that folks are willing to bankroll your next thing almost without hearing the pitch. When NING approached 120 million (as reported here by TechCrunch) they set in motion a trajectory that required them to hire too many people, set very high expectations for an exit, and need to develop a revenue strategy that supported that 10X exit. What NING now knows is that advertisers just aren't going to pay a premium for small niche networks. And as CPM's moved downward, pageview growth wasn't enough to make the math work.
Expectations. NING has been trying to keep the free ad-supported model alive with few limits or restrictions, while pursuing a strategy of providing Enterprise Services to paying customers. This is a reasonable concept, but the path from free to paid wasn't clear, and sites on the free network didn't have notice or a roadmap to paid. This could have been solved sooner and less painfully. It's worth pointing out that NING is hardly the only platform to kill its free offering, Brightcove did it a year ago, and even our partnership with Demand Media to power the free ChannelMe.TV ended up as a pile of dust. These things happen.
The Future. NING is a solid software platform with good bones. Enterprises will like the community functionality. But the challenge now is vision -- and with Marc deep in VC land and Gina gone, It's hard to imagine that technology alone will keep NING from following Joost and other once high-fliers off a cliff, let's hope not.
Community is the core of the Web's best nature, and organizing community so that both members and platform providers can find value for investors and customers is important for all of us, and for the Web broadly.
follow steve on Twitter @Magnify
(originally published on theFastCompany Blog)
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