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Are App.net's Crowdfunders Being Taken For a Ride? 95

Posted by samzenpus
from the money-for-nothing dept.
snydeq writes "At least 10,000 people believe in App.net's vision of a messaging platform for Web apps — but it's unclear whether those people will be peers or sharecroppers, writes Simon Phipps. 'Last week App.net reached the milestone of 10,000 users who signed up for a new — mostly yet to be written — social network that looks like an early reimplementation of Twitter. Signing up people to claim user names on an (not vaporware) alpha Web service may not seem surprising or novel, but this time there's a difference: Everyone who signed up for App.net paid $50 for the privilege,' Phipps writes. 'App.net has used the crowdfunding approach, but it's not the same kind of project. While superficially similar — there's an offer of immediate use of its Twitter-clone service and reservation of the user ID of your choice — it's much more speculative. It's crowdsourcing the seed capital for a new venture, crowdsourcing the design, crowdsourcing the testing, and crowdsourcing most of the software that interacts with the venture, all without actually giving anyone but the founder a true stake in the outcome.'"
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Are App.net's Crowdfunders Being Taken For a Ride?

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  • Can someone.... (Score:4, Interesting)

    by Anonymous Coward on Sunday September 02, 2012 @08:07PM (#41209557)

    tell me how this is any different from xmpp+chatrooms+db+php rss feeds?

    Because that's all it would take to create one of these.

    But maybe I'm underthinking it or something.

    • Re:Can someone.... (Score:4, Insightful)

      by stephanruby (542433) on Sunday September 02, 2012 @08:43PM (#41209703)

      tell me how this is any different from xmpp+chatrooms+db+php rss feeds?

      It wouldn't be.

      In any case, with kickstarters concepts, you don't usually just invest in the idea. You invest in the people first and foremost. For instance, if the creator of a previous online service I had been using and I actually liked, were to start a kickstarters' project, and if his idea was decent (not great, but decent enough), I might chip in $50, even if the project went no where.

      That being said, I don't know the guy. I've never used his previous project before, so I'm just going to watch from the sidelines. I wish him luck. If nothing else, this kickstarters project should be viewed as a meaningful petition that many Twitter addicts (and third party developers) are starting to get fed up with the service.

    • by poetmatt (793785)

      because they proclaimed "but we're not twitter!"

      the reality is: there's zero guarantee they'll stand up to the government, something twitter actually does.

      So it sounds great, but it'd be a gigantic loss to freedom worldwide if people pick app.net over twitter at the moment. Guarantee that app.net can't afford lawyers like twitter.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Decentralization is the only answer to governments. We need a new "SMTP". Well, the SMTP we had before everyone switched to Gmail, Yahoo, Hotmail, blacklists, sender keys and other awful patches to its shortcomings etc.

      • the reality is: there's zero guarantee they'll stand up to the government, something twitter actually does.

        Yeah, and how long is this going to last?

        Twitter has only proven that they could be bought with the NBC censorship debacle, going against their own terms of services. Now governments just need to invest millions of dollars in regular ad campaigns with Twitter and then threaten to pull out whenever they want something censored.

        It was actually a pretty smart move on their part. By doing that, Twitter has shown that they can't be intimidated, but that at least they can be bought -- assuming the amount of money

    • by DragonTHC (208439)

      The service is meant for app developers. They are pitching in to get access to the API when it's written.

      • by dadioflex (854298)

        The service is meant for app developers. They are pitching in to get access to the API when it's written.

        Sssshhh! You're going to confuse the angry mob with facts.

  • As usual (Score:5, Informative)

    by zubiaur (1207636) on Sunday September 02, 2012 @08:08PM (#41209565)

    There is an xkcd for that too http://xkcd.com/1060/ [xkcd.com]

  • by agizis (676060) on Sunday September 02, 2012 @08:12PM (#41209585) Homepage
    You have it all backwards. The Kickstarter model gives an opportunity to get products built that *customers* want, and are willing to pay for, without having venture capitalist in the middle, funding everything and demanding their return. The backers' relationship to the project is that they are *paying customer*, which is less than being the owner of the company, but much, much more than just being a *user* of a free service like Twitter or Facebook.
    • The problem with that is that customers are often really stupid.

      Venture capitalists are certainly not flawless, but in many cases I'd trust a visionary and some open minded backers to make good choices, rather than a bunch of "customers" who think they know what they want.

      • by agizis (676060)
        Well, yes that's why Kickstarter works the way it does. It's not some crazy pure democracy thing, where each person gets to declare how their $50 is to be spent.

        What happens, is the team posts its vision, along with a detailed list of what you get at each backing level. Potential backers can basically take it, leave it, or say what they really want. If enough people want something different, the team can add things to the project (but never remove them, because of course, someone else may have already
      • by tehcyder (746570)
        I think anyone who donates $50 to a non-existent project has moved way beyond stupid and into the land of the delusional.
  • by sootman (158191) on Sunday September 02, 2012 @08:14PM (#41209607) Homepage Journal

    Everyone should be signing up for this [ihave50dollars.com] new service.

    • by NoMaster (142776)

      Posting to undo "+1, Insightful" mod - I thought your .sig was your comment ;-)

    • So, I clicked through and found the initial presentation funny, but if you try to click on the Vimeo link and actually type in a "desired" user name, you are forwarded to a TedX talk by Lisa Kristine [ihave50dollars.com], a photographer who has documented the existence of slavery in Nepal, Ghana, and India to name a few.

      Kristine's message is quite compelling and worth a look on its own merits. I hope the +5 mod ends up getting the featured abolitionists, "Free the Slaves", the funds to free these inhumanely treated people.

  • well, duh! (Score:5, Insightful)

    by cas2000 (148703) on Sunday September 02, 2012 @08:35PM (#41209673)

    Kickstarter enables a style of capitalist parasitism that was previously only available to huge corporations to be scaled so that it's accessible to small-time scammers as well as the giant fraudsters:

    Privatise the profit, socialise the risk and expense.

    That's not all there is to kickstarter or to kickstarter projects but it's easy to see why it is attractive to such parasites - the crowd-funding model has most of the benefits of the stock market without the anti-scammer regulations and without having to give annoying outsiders (aka shareholders) a share in what they're funding.

    • by Swistak (899225)
      Well if people are good/stupid enough to fund someone's company then why not take advantage of that? Kickstarter have been designed as a way to gather donations. If companies abuse system - it's only becouse users actually let them. When whole series of project fail miserably people will adjust their expectations.
      • Re:well, duh! (Score:5, Insightful)

        by cas2000 (148703) on Sunday September 02, 2012 @10:12PM (#41210071)

        Your attitude is exactly what is wrong with american business ethics.

        'caveat emptor' is not a description of a legitimate business model, it's a fucking warning.

        People who are stupid or ignorant or ill-informed or just plain conned by slick salesmen DO NOT DESERVE TO BE RIPPED OFF.

        And those who do the ripping off are criminals who deserve jail time.

        Also, aside from the criminality of ripping people off, even a staunch libertarian type should be able to see that deceptive exploitation of information asymmetry like this inevitably leads to a lemon market, which is bad for everyone: if you can't trust the market at all, the only rational option is to treat everyone as a scammer (and scam or be scammed) or not to play at all.

        • by Rockoon (1252108)

          People who are stupid or ignorant or ill-informed or just plain conned by slick salesmen DO NOT DESERVE TO BE RIPPED OFF.

          You know whats stupid? The idea that you can prevent stupid people from doing stupid things by eliminating the stupid things instead of educating the stupid people.

          • Re:well, duh! (Score:4, Insightful)

            by Archangel Michael (180766) on Monday September 03, 2012 @12:47AM (#41210729) Journal

            The six scariest words strung together are "There ought to be a law".

            You cannot fix stupid. Some people are so stupid, they actually go looking for stuff like this because of laws that are supposed to prevent people getting ripped off. The problem is, they still are stupid, they still get ripped off, but now, they want the Government to fix their stupidity so they can do it all again next week.

            • by drinkypoo (153816)

              Some laws are good. The ones that provide meaningful protection against fraud, for example. If you don't like laws, I suggest you just put all your shit in a pile and burn it now, because that's about how long you'd be able to own it if they were gone, not that you'd ever have had it to begin with.

            • by cas2000 (148703)

              you're absolutely right, stupid is unfixable. no law is ever going to prevent stupidity, same as no law is ever going to prevent someone from being robbed or killed.

              that's no reason to let criminal scum get away with their crimes.

              laws don't prevent crime, they don't even deter crime. they do allow for punishment of offenders when they're caught.

              • Why is, taking advantage of stupid people against the law. NOBODY is forcing stupid people to make stupid decisions, they are willing participants. People who invest in Pyramid Schemes are victims of themselves, and not the "con". Most Cons are based on the assumption that the Mark is stupid and greedy, and therefore "easy". I can promise nothing, while making wild and vague "potential earnings of up to 400%*" type of claims. And if you believe me, you should invest immediately ($10,000 Minimum).

                Tell me, wh

                • by cas2000 (148703)

                  Why is, taking advantage of stupid people against the law.

                  Because the kind of people who take advantage of the stupid are criminal scum who are a menace to everyone.

                  They're also destructive to society, the kind of people who turn places into cultural shitholes (where nobody sane would want to live) that might otherwise be kind of nice. america, for one really obvious example. americans can be nice people but they let their scum run the place, probably due to the non-stop propaganda about freedom that they

                  • Stupid People are everything you said criminal scum are. They are a menace to society, they are destructive, and turn places in to shitholes. So, in my world they deserve each other. ;) Which is why they should be left to themselves, and leave the rest of us alone!

            • by tehcyder (746570)

              The six scariest words strung together are "There ought to be a law".

              You cannot fix stupid. Some people are so stupid, they actually go looking for stuff like this because of laws that are supposed to prevent people getting ripped off. The problem is, they still are stupid, they still get ripped off, but now, they want the Government to fix their stupidity so they can do it all again next week.

              Yeah, let's get rid of all laws, teh Government is oppressing me by denying my entirely valid desire to rape and murder you. And, obviously, if you're the sort of person who gets raped and murdered you must be stupid, and therefore you deserve it.

              • Yeah! Because you must be advocating the opposite, of More and More laws to the point of Tyranny! Yeah, arguing the extremes is easy!

                Because Rape and Murder is exactly the same as protecting stupid people from their own choices. Exactly, right?

          • You know whats stupid? The idea that you can prevent stupid people from doing stupid things by eliminating the stupid things instead of educating the stupid people.

            You can fool some of the people all of the time, and all of the people some of the time ...

          • by cas2000 (148703)

            you know what's even more stupid? letting conmen get away with their crimes because you think their victims deserve it.

            people shouldn't have money if they don't want to get robbed, women should wear burqas if they don't want to get raped, pedestrians should stay home if they don't want to get killed by a drunk driver, and so on.

            it's their own fault. they deserve it.

            it's good to know we have such an upstanding citizen to let us know who the worthy and unworthy are.

            • by Rockoon (1252108)
              What the hell are you talking about?

              Nothing you said was specific to stupid people doing stupid things. Given that fact, my guess is that you are stupid too.
        • Kickstarter projects have to tell you VERY clearly what you're getting for your money. Its right there next to the radio button you have to click when you decide what amount to contribute. So what is this BS about "slick salesmen" and "information asymmetry"?

          • by cas2000 (148703)

            the possibility that the people/person behind the project may be lying springs to mind.

            No, on second thoughts, you're right and i'm completely wrong, there's no such thing as a dishonest businessman....on an unrelated topic, would you like to help me get my bridge-buying company kick-started? for a $10 donation you get to walk on the bridge once. for $100 you get one of the paving stones engraved with your initials, or your full name for $1000.

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Wow! I guess that's one way of looking at it...

      There absolutely is the possibility for a scammer crowd-funding returns on their scam – don't get me wrong. That is something everyone who uses them should be on the look out for. In general, they wouldn't lose much (relative to other scams), but with enough people giving a little, a scam could make a killing.

      But you act like this type of scamming is a new thing – it is not crowd-funding which has enabled it. How many scam charities have you heard a

      • I posted anon as to not ruin the message of my comment with self promotion - but I couldn't live with myself if I didn't add my own reply with my sig. New site with actual info coming next week. :)

        -Cheers
      • by tehcyder (746570)

        So far, I have turned down a solid promotion, actually quit my job, taken out personal loans, and burned through my savings in order to work on a project I passionately believe in.

        No offense, but that sounds pretty fucking stupid to me.

        • So far, I have turned down a solid promotion, actually quit my job, taken out personal loans, and burned through my savings in order to work on a project I passionately believe in.

          No offense, but that sounds pretty fucking stupid to me.

          None taken! It's definitely not for everyone! But a few things pushed me to it:

          1) I'm still pretty young and able to take the consequences of failing... and rebound, if it all came down to it.
          2) I believe passionately in what I am doing - attempting to help people, rather than working 60h a week just to help the company that happens to pay me.
          3) I could never have lived with myself if I didn't try.

          I wouldn't say it is stupid - maybe naive. But, for me, I'd say it would be more stupid not to try.

    • Re:well, duh! (Score:5, Insightful)

      by fermion (181285) on Sunday September 02, 2012 @09:27PM (#41209879) Homepage Journal
      I am not sure what protection the stock market gives. The people who invested in facebook during the IPO has lost half their money. The people who capitalized facebook has made money. You could have invested in Microsoft back in 2008 and have lost money due to the stock decline or inflation. People invested in Enron, Worldcom, all under the so-called stock protection, and lost everything. Sure there are now more regulations, but that seem more there to protect CEOs then investors. The reality is that the stock market is not a magic money machine, and there are real risks. The elites has created this myth for the middle class, in the same way the lottery myth was created for the for those with only a dollar to invest, so that we can believe it is possible to live the american dream without working for it.

      Kickstarter is a service that connects people with ideas with people who are willing to risk a little money. 50 dollars is a lottery ticket a week. The rewards are less than a lotter ticket, but so are the risks. If you give $20 and an album is made by your favorite artists, then you get an album. If not you lost twenty dollars, which is about the markup on a concert t-shirt and few seem to have problem throwing money away on that.

      In this case some are choosing to spend $50 to buy a product as opposed to selling themselves to advertisers. I don't know why this makes people so upset? Because it disrupts the current corporate model of monetizing people? Because some people are so cheap that they value $50 more than themselves? Because some people are so risk adverse that all they can do is hide in their parents basements or living rooms? What gives?

      • by Rich0 (548339)

        Well, the stock market offers no protection if you believe hype and pay a lot more than something is worth. If I offer to sell you my 2000 corolla for $50k, and you say yes, then fraud laws will only protect you if I fail to deliver the car, not if you realize that you overpaid.

        Facebook is also a bad example in that a controlling interest in the stock was not sold. That should probably be illegal for publicly traded stocks, but the stock market is fairly corrupt.

        However, those who did buy Facebook stock d

        • by Threni (635302)

          > That should probably be illegal for publicly traded stocks

          I don't see why, if this was made clear when it floated. It's not like anyone can say `wait, you mean I can't save up and buy Facebook in instalments, a few shares at a time?`.

          • by Rich0 (548339)

            I don't see why, if this was made clear when it floated.

            It creates a situation where the average member of the public can get ripped off. What is to keep the board from issuing a dividend to only certain classes of shares, or agreeing to give Zuckerburg a $1B/yr salary or whatever? He can just put it up for a vote, and since he has a majority of the votes he approves it and all the other shareholders lose out.

            Just making this clear when the stock is floated doesn't really help - that's why we have the SEC in the first place. It wasn't like all those investors

      • by mellyra (2676159)

        I am not sure what protection the stock market gives. The people who invested in facebook during the IPO has lost half their money. The people who capitalized facebook has made money. You could have invested in Microsoft back in 2008 and have lost money due to the stock decline or inflation. People invested in Enron, Worldcom, all under the so-called stock protection, and lost everything.

        if you are not a commercial investor and invested into any stock directly you are just setting yourself up for failure and anyone with basic finance knowledge will tell you so.

        Buy an index certificate, be prepared to hold it at least 15 years and have another 5 years during which you cash out (into bonds, bank deposits, ...) as the opportunity arises (and even then you can end up in a Japan-like situations and take home losses). But never buy single stocks and never invest into stocks when you may be forc

      • by drinkypoo (153816)

        Kickstarter is better than the stock market because you see right up front what you get or don't get if you give them money. Sometimes you get something right away, which can be a powerful incentive to part with money. Sometimes you definitely get something later, which is not bad. Sometimes you might get something much later, which clearly puts such a Kickstarter investment into its own category. And sometimes, you just help fund something. I've done this once to the tune of five bucks. Didn't need to, wil

  • $50 is way too much. (Score:4, Informative)

    by Jane Q. Public (1010737) on Sunday September 02, 2012 @08:49PM (#41209717)
    I remember reading that a single member is worth about $1.21 in revenue to Facebook.

    If Facebook thinks it can stay afloat with that kind of revenue, how can App.net justify such an outrageous price? Even if each member was worth ten times that to Facebook... how can App.net justify a $50 fee?
    • Re: (Score:3, Funny)

      by larry bagina (561269)
      Keep in mind their target member is an elite hispter doofus that is mad twitter sold out (aka got popular) and is willing to spend $50 a year so they can buy $200 worth of twitter clients for their $2,000 phone so they can tell @world they just took a #shit.
      • I LOL'd. But I bought a developer account because I love Twitter but think they're in the long process of shooting their foot off with a BB gun. For example, they recently announced that it was going to be essentially impossible for third-party clients to distribute more than 100,000 copies. I hate - I mean, just plainly detest - their native clients and some of those third-party apps they're killing are wonderful. For those straggling apps that hang in there anyway, Twitter is enforcing a style guide that

    • by Anonymous Coward

      . how can App.net justify a $50 fee?

      It's justified by people actually paying it.

      An example of an unjustifiable price would be Kodak's asking price of $3 billion for their patents - and no one is biting. That's a sure sign of an unjustifiable price.

      It used to be called "what the market will bear."

      • "It's justified by people actually paying it."

        You make a good point. I probably should have asked, "How can App.net justify a $50 fee, other than just money-grubbing?"

      • Oops... answered a bit too soon.

        It used to be called "what the market will bear."

        Yes, and that in itself CAN be justification... but keep in mind that this is a startup without much of a real product yet. It's hard to apply old-school measures like "what the market will bear" over something that is still mostly speculative... considering what bald (and blind) speculation did to our economy twice in less than 10 years.

      • by tehcyder (746570)

        . how can App.net justify a $50 fee?

        It's justified by people actually paying it.

        An example of an unjustifiable price would be Kodak's asking price of $3 billion for their patents - and no one is biting. That's a sure sign of an unjustifiable price.

        It used to be called "what the market will bear."

        Which is fine if your only definition of truth or morality is based on the market.

    • 10,000 people disagree with you.
      • "10,000 people disagree with you."

        Well, if you want to put it that way: approximately 6,973,728,433 people do not disagree with me.

  • "We'd like everyone to give us $50. After that, we're pretty likely to spend all the money just before we crash and burn. If we should somehow survive, we'll be mowed down by facebook and twitter, and end up in a garbage can with google+.

    But thanks for all the money! We'll have some good fun spending it!"

  • by Shavano (2541114)
    I bet Zuckerberg wishes he'd thought of that.
    • I bet Zuckerberg wishes he'd thought of that.

      Yeah, that guy's gotta be unhappy with his situation. Zuck's going to be kicking himself when Dalton Caldwell (who?) is raking in billions with his highly successful business plan.

      After reading all this crap about app.net I'm still unsure exactly what they do/plan to do, but taking over the world by taking advantage of idiots doesn't seem to be a part of it, so I doubt Zuckerberg's interested. I mean, they may have the taking advantage of idiots part down, but what good is that if you're not taking over the

  • The fundamental idea is that, unlike Twitter, app.net won't be beholden to advertisers because its users are paying for the service. It's a good idea in theory.

    But the thing is - support costs are ongoing, not a one-time fee. So going forward either app.net will have to continually attract new users - and at a constantly accelerating rate - or else users will have to pay a subscription fee rather than a one-time fee. Maybe that is spelled out somewhere, but I couldn't find it.

    • The fundamental idea is that, unlike Twitter, app.net won't be beholden to advertisers because its users are paying for the service. It's a good idea in theory.

      But the thing is - support costs are ongoing, not a one-time fee. So going forward either app.net will have to continually attract new users - and at a constantly accelerating rate - or else users will have to pay a subscription fee rather than a one-time fee. Maybe that is spelled out somewhere, but I couldn't find it.

      The users are paying for a year subscription, so they have that covered. But I still think they are going to have to continually attract new users... otherwise the base group are going to just stop paying.

  • I suspect App.net's going to crash and take all the money with it. Bluntly put, there's just not enough value in it for the end-users. There's a small core willing to pony up, but the value of something like this comes from having large numbers of people signed up and many of the people each potential user knows are on the network or are thinking about getting on. With only that small core, there's not enough people already on to make most people think it's worth setting up Yet Another Online Account and sh

    • Bluntly put, there's just not enough value in it for the end-users.

      The value is that Facebook is someone we do not want to stream all our data through, nor Google.

      The value is that it is not Twitter, which is attempting a rapid self-implosion by rapidly killing any desire for outside use of the Twitter API for anything except voyeurism. Twitter forgot all the value THEY had was in people generate content within Twitter, that was the stupidest aspect to mess with.

      The value is in having something like twitte

    • by tehcyder (746570)

      I suspect App.net's going to crash and take all the money with it.

      Oh no, I'm sure they'll pay everyone their $50 back if that happens.

      * collapes on floor laughing hysterically *

  • People just like spending money on worthless crap like this. It gives them a warm glow. I doubt $50 is going to break anyone so just let them learn the hard way.
  • so... (Score:4, Insightful)

    by Tom (822) on Monday September 03, 2012 @03:07AM (#41211179) Homepage Journal

    It's crowdsourcing the seed capital for a new venture, crowdsourcing the design, crowdsourcing the testing, and crowdsourcing most of the software that interacts with the venture, all without actually giving anyone but the founder a true stake in the outcome.'"

    So, in other words, it's brilliant.

    We are witnesses to a retro dot-com boom, doesn't anyone notice? For the second time, Internet geeks are taking the business world for a ride. Ticket price: A couple billion bucks. There's a number of startups out there with completely insane ideas that get millions in VC funding. The Facebook IPO took heaps of money from the dumb "investors" who jump on every hype, it's not as wild as the early 2000s, but it's the same recipe.

    Now if only I were ruthless enough to pitch a bullshit business plan to a room full of idiots with money. :-(

    • by houghi (78078)

      We are witnesses to a retro dot-com boom, doesn't anyone notice?

      It is like patents. Just because it has the word Internet does mean it is something new or something we have not seen before.
      Even the dot-com boom is a variations on Tulip Mania [wikipedia.org] which happened in 1637.
      Happened before, it will happen again.

  • Crowd Funding Freedom
    http://zotzbro.blogspot.com/2012/08/crowdfundingfreedom.html [blogspot.com]

    Perhaps the funding folk need to read and think.

    all the best,

    drew
    with a little blatant self promotion.
    on topic though.

  • Does anyone know, is there a Kickstarter like service that provides you a percentile return on your investment depending on the success of the project, instead of just a t-shirt? If there is not I might have to start such a service of course using Kickstarter to source funds.
    • by EuNao (1653733)
      The problem with this is the SEC rules in the United States. There was a law recently (Startup Act 2.0) that when implemented has a chance to allow Crowdfunding with equity, but such a thing is illegal at this moment in time.

      Also, FYI, Kickstarter itself does not allow this kind of business to be funded. You can't explicitly start a business or a service with ongoing maintenance like a web startup on Kickstarter. You have to use something like Rockethub or Indie-go-go instead. That is actually why ap
  • I don't mind Twitter being an ad-funded free-to-the-user experience.

    I just want to be able to pay Twitter some money to opt out of the ads.

    I don't see why Twitter can't remain free for the users who don't mid ads and at the same time offer an ad-free timeline to those who want to pay.

    10,000 people just paid $50 for an ad-free experience on an as-yet unproven twitter-clone. Imagine how many people would pay for the already-established Twitter.

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