I worry that this is one of those market sectors where the price customers are willing to pay to use a service is dwarfed by the price advertisers are willing to pay for access to the users --- and so the ad-supported version is (a) free, (b) more attractive to users, and (c) more lucrative.
In a network-effect dominated business, this doesn't seem like a recipe for success.
I'm not so sure. The network effect here is to have all apps sharing one messaging fabric. The value of access to that fabric should go up as the network grows, and the costs of moving a message should stay low. Things fall apart if one or two apps start to dominate the fabric, but if that's true the open fabric wasn't needed in the first place.
I'm not predicting success here, I'm not even sure what the exact product is beyond a general idea of a twitter-gone-the-API route.
I'm in favor of the project. We'll all learn from it and I admire his moxie in trying it. I'm getting out my credit now to give it a $ upvote.
I can see (a) and (c), but what part of this scenario leads to (b)? The fundamental assertion underlying the desire for a paid network is that ad-supported networks are inherently worse for users because the network is built with advertisers in mind instead of users in mind. A paid network may very well bring in less money than an ad-supported network, but as long as it brings in enough money to operate I don't see the problem.
One solution to the problem of "your users are the product" is allowing your users to buy their own ad space at a multiple of how much they are predicted to make you.
If a user makes you $1/mo in ads then you could charge that user a multiple based on the growth rate of that income.
So if they are pretty steadily using your app and clicking on ads just use a 1.5x multiplier which would be $18/yr.
If their usage is growing and they are clicking on more ads then use a larger multiple, like 10x and charge them $10/mo.
Once you consider these users who "buy their own ad space" as advertisers, in a way you'll start converging on making a better product for people that pay.
Of course, the issues with this system is that it doesn't scale. The more users that become paying users the less data you have to predict how much you would be making on ads per user. Eventually, you would have to start guessing at that price.
This downside could be averted if someone created an API that allowed companies like twitter or facebook to POST information about a user and the API would broker how much that user is worth either by algorithm or auction and the user would be given a chance to beat the top price.
True, and yet what if there's an opening for the other model? And what if the opening grows as the market matures? It's worth a fresh try, every few years.
Ad-supported mass-market audiovisual entertainment dominated for decades... but there's still a growing niche for audience-paid ad-unencumbered alternatives: Pandora, satellite radio, ITunes, NetFlix.
In a network-effect dominated business, this doesn't seem like a recipe for success.