App.net State of the Union

As many are aware, the first major round of subscription renewals from the original App.net launch happened a few weeks ago. We have been anxiously anticipating what our subscription renewal rate would be in order to do budgetary planning. Since we have not been sure what to expect the renewal rate to be, we mentally prepared ourselves for a wide variety of outcomes.

The good news is that the renewal rate was high enough for App.net to be profitable and self-sustaining on a forward basis. Operational and hosting costs are sufficiently covered by revenue for us to feel confident in the continued viability of the service. No one should notice any change in the way the App.net API/service operates. To repeat, App.net will continue to operate normally on an indefinite basis.

The bad news is that the renewal rate was not high enough for us to have sufficient budget for full-time employees. After carefully considering a few different options, we are making the difficult decision to no longer employ any salaried employees, including founders. Dalton and Bryan will continue to be responsible for the operation of App.net, but no longer as employees. Additionally, as part of our efforts to ensure App.net is generating positive cash flow, we are winding down the Developer Incentive Program. We will be reaching out to developers currently enrolled in the program with more information.

App.net will continue to employ contractors for help with support and operations. In addition to operational and support help, we will also be utilizing contract help for specific new development projects.

App.net was envisioned from the beginning as a service that could be sustainable, something intended to operate on a longer timescale than a typical online service. It is often the case that services that are important to people can get caught on the wrong side of a boom-and-bust cycle, which is something we explicitly wanted to avoid.

We will be open sourcing a larger and larger percentage of the App.net codebase. We would love to get community contributions and improvements. Today we are launching a new open source page at opensource.app.net. The first new piece of software we are open sourcing is our microblogging web application, Alpha. The source code to Alpha is available here.

The continued support and interest of the App.net community is vital the continued health and wellbeing of the platform. Depending on the revenue that App.net makes, we are open to increasing or decreasing the budget we can allocate towards additional development. If revenue rates start to tilt upward we would be excited to budget additional development resources. In any event, our intention is to have the App.net service continue to operate for as long as there are customers willing to support it.

We continue to believe in the usefulness of a sustainable social platform where users and developers are customers, and not the product being sold to advertisers. If this were a company without a clear business model, App.net would have disappeared long ago. The market conditions that were the driving force behind App.net’s creation have not changed, if anything, there is more of a role for a social platform like it. We would like to thank the developer and member community for taking App.net from just an idea two years ago to a fully realized service today. Needless to say, it’s been humbling for all of us on the App.net team to have the support of so many amazing people.

Thanks,
Dalton Caldwell and Bryan Berg, co-founders