thoughts on business, community and customer service

Bad Day for Ning

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The big news of the day is that Ning is laying off 40% of their staff and the free version of Ning is going to go away. DHH has a good post on the subject where he points out a common problem with “web 2.0” start-ups, “Eyeballs still don’t pay the bills”.

So many start-ups bank on getting as much traffic as they can, while hoping they figure out how to make money off of that traffic as they go. Ning has raised $120 Million in VC over the last six years and they have nothing to show for it. All this time they have been banking on ads to pay their bills but have learned like so many others, that ads don’t pay the bills and you shouldn’t build your business model on ads alone. Even Google does more than ads these days and they are a company who does ads very well.

I feel sorry for the people laid off at Ning and hope they can find work easily but I’m glad their new CEO is doing what needs to be done to fix the company and make it into a business. I also hope that if any of the employees go on to form new companies themselves that they will avoid the same mistakes and build a company based on a product that they can grow on their own and not attempt to build it on ads and VC.

Written by hornbeck

April 15, 2010 at 9:29 pm

Posted in Uncategorized

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