Episode 13: No-Host Bar Dot Net with Dalton Caldwell

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Dalton Caldwell is the head of App.net (sometimes called ADN for App Dot Net), which some think is a Twitter competitor, but it isn’t quite. It seems to be a typical venture-backed startup firm, but it is not quite that, either. There’s a lot more under the surface of App.net, including neutrally hosted services, ecosystems aimed at software developers, and crowdfunding, among other topics, which we talk about in this episode.

Show notes

App.net started as picplz, a photo-sharing service like Instagram, that was later spun out and ultimately shut down. A competitor, Color Labs, received over $40 million in investment to launch a proximity-based social photo app, and then changed its business entirely before reportedly selling its intellectual property to Apple and closing its doors. Caldwell wrote a blog post recounting how Facebook essentially pulled the rug out from under its revised business, before it committed to App.net. Twitter announced last August a series of changes, including limits on clients that mostly showed a Twitter timeline and allowed posting, as well as other requirements put in place March 1.

Vine, an app acquired last year by Twitter, launched with Facebook integration in January and had its Facebook approval pulled within hours. Flickr had long languished before a relaunch a few months ago which added integration with several social networks, a new and far better app, and an improved Web site. (I wrote about Flickr’s changes for The Economist.)

For those who are too young or forget this period of time, Microsoft wanted to destroy Netscape back when Netscape was just a browser, because of its potential to be enough of a thin platform to obviate the need for Windows. The strategy of Go and chess: “If you’re playing the same game, you lose”

Caldwell mentions in his previous streaming-music business that he met Lyor Cohen, a legend in the music business, who blamed him for having to lay off 500 people. Groupon and Living Social have plunged in value in the last two years and Groupon just fired its CEO, who founded the company. Google started as Backrub, a project at Stanford by Larry Page and Sergei Brin, and that name appeared in access logs when they tested their algorithm.

Venture capitalist Fred Wilson said at a Crunchbase conference in mid-2011 that Twitter was developing its business model as it went. If it had planned what it was going to do, it would have launched with clients on every platform; instead, developers were well ahead of the company, which complicated relations.

Kickstarter’s guidelines disallow funding ongoing businesses; they must be project based. Penny Arcade got around this in part by not offering a subscription, but having a deliverable: no ads on the site for a year. RunRev successfully raised £494,000 to rebuild its LiveCode scripting language’s code base and release an open-source, free-to-use, free-to-distribute version.

Eddy Cue at Apple has been in charge of its music business since its inception (and now runs its entire software and services division), and is considered extremely savvy in dealmaking without simultaneously being horrible. EMI agreed to remove DRM protection on its music catalog sold through Apple in part because of a one-time fee that Apple paid it during a financial crunch.

App.net announced a free tier just after we recorded the podcast. The free tier includes a limited amount of storage (500 MB rather than the 250 MB Caldwell thought they would launch with) and allows a user to follow only 40 accounts (but can be followed by unlimited users), which makes it useful for those testing the waters, wanting to listen only, and for businesses and others who want to create announcement or news feeds on App.net. Initially, the free tier requires an invitation from a yearly paid subscriber. The free tier turns App.net into a freemium service a la Dropbox and github, something I talked about extensively in Episode #2 with Chris Anderson.

Tapbots decided that its Netbot iOS app for App.net, a quasi-port of its extremely popular Tweetbot client, wasn’t selling well enough to justify charging for it. It opted to make the app free and had 100,000 downloads (vastly more than App.net accounts). It hopes to collect a sizable portion of the monthly developer incentive payout that App.net pays out based on a combination of usage and monthly user ratings of the apps that they use. (The incentive was raised from $20,000 per month to $30,000 per month just a few days ago.)

Clay Shirky’s essay on the power-law curve of popularity and attention written in 2003 is still totally valid today.

Apple requires that developers give it 30% of any subscriptions signed up within apps and not provide ways to subscribe that are linked within the app that aren’t tied to giving them that cut. That occasionally has caused problems with Dropbox links within other apps, as Dropbox’s log in page provided links to upgrade to paid accounts.

Anti-Apple Anger” is an essay by Marco Arment in The Magazine that explains how Apple infuriates people by not allowing users to control everything that their platforms do. I also talked to Jason Fried about this concept in Episode #10.

Eternal September happened when AOL in the 1990s when it opened a gateway to the Usenet discussion groups.

Patter is an App.net app that uses the private-messaging developer interface and is a great example of an app that uses App.net without looking anything like microblogging. Project Amy, released after we recorded the podcast, integrates App.net as a service in Apple’s Messages app in Mac OS X. The Cambrian Explosion is a putative period in evolutionary development when a number of new forms suddenly appeared in the fossil record.

App.net is, not ironically, also on Twitter at @appdotnet.