A social network with no ads?

Queena Kim Sep 26, 2014
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A social network with no ads?

Queena Kim Sep 26, 2014
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You’ve heard the grousing about Facebook? It’s usually about the advertising cluttering up your feed or the fact that they’re mining users’ data.

While that might cause some people to see red, a startup named Ello saw a business opportunity. The social media site promises not to show its users ads or mine their data. And Ello is striking a chord with consumers: The social media site said it’s getting 45,000 requests to join an hour.

So that’s all well and good, but there’s the billion-dollar question? How’re they going to pay for all this?

Paul Budnitz, CEO and co-founder at Ello, says, unlike Facebook, the social media site isn’t trying to get everyone on Earth to sign up.

“It doesn’t have to be worth $30 billion to be successful. It can just be a good business,” Budnitz said.

Budnitz says Ello won’t charge users. Instead, to make money, the site plans to sell special features, like the ability to manage multiple accounts. They could also sell emojis and stickers.

Roseanne Wincek, a venture capitalists with Canaan Partners, said there is money to be made in hawking those goods. But, she says, if Ello plans to accept the 45,000 invitations it claims to be getting every hour, the social network will need big money.

“I think it’ll be hard to have investors and a ton of users and a ton of data and then say you’re not going to use it” to make a lot of money, Wincek said.

Brett Kopf is the CEO of Remind, a messaging app that’s aimed at teachers and students. Like Ello, Remind doesn’t sell advertising or user data. Kopf said while it might be hard to get mass consumers to pay for privacy, there are businesses that’ll shell out money for it.

“Like in education and in health care, there are real privacy concerns,” Kopf said.

And if there are real privacy concerns, he thinks people will be willing to pay real money for it.

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