Business

Just what the doctor ordered: Why Ning’s gutsy move to ditch their free service is actually brilliant

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Ning

Yesterday, Ning CEO Jason Rosenthal announced to employees a drastic change in direction and sweeping layoffs.  While the mainstream "new" media is saying that Ning's
bubble has burst
, as a Ning client I'm really excited about this move.  Essentially the core of the announcement (leaked to TechCrunch yesterday) is that Ning will be dropping their free options and focusing 100% of their efforts on premium networks.

Over the last few years my company has helped our clients launch some of the most successful networks on the Ning platform.  However, we've struggled with the tension we knew Ning was living under as it tried to serve paying clients like us and at the same time serve millions of free network creators.  In the early days we could email Ning support and hear back within minutes.  Lately its to the place where getting a response from Ning takes days (and we have "connections").  This had to change.

In yesterday's company wide email, Jason said, "All of our product development capability will be devoted to making paying Network Creators extremely happy."  As an often frustrated "paying Network Creator," this is a breath of fresh air that's much needed.

There's an incredible (and highly profitable) opportunity for Ning to dominate the hosted white label social network space.  However, I believe they can only do this if they're freed up to focus on supporting their premium network creators and giving them the features that they need and have been asking for. 

Like Seth says, "It takes vision and guts to turn someone down and focus on a different
segment."  For the last year Ning has been so busy becoming huge (with free networks) that they've been saying "No" to the wrong group (the paid customers).  I'm optimistic that that's about to change.

So, Jason and Marc, I'm proud of you for making an extremely gutsy move and being willing to make really difficult decisions. Thanks for being brave!

And to my friends at Ning who no longer have jobs, I'm really sorry, I know this is a tough time for many of you.  Having worked with you I'm confident that you'll land on your feet. You're amazing people. If you'll drop me a note with your address I'd love to send you copy of Seth Godin's newest book, Linchpin.  I think you'll find it really helpful right now.

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16 thoughts on “Just what the doctor ordered: Why Ning’s gutsy move to ditch their free service is actually brilliant

  1. I don’t entirely disagree with you, but with them discontinuing the free version it would seem to create a void that will be filled by someone else – hopefully with a better business model that can deal with the demands of a free service (facebook?).

  2. Rob,
    I completely agree with you.  In fact Grouply is already trying to court free ning users ( http://bit.ly/aReP7Q ), and frankly its hard to beat a facebook fan page as a simple option for gathering your tribe.
    Thanks for reading,
    Jon

  3. There’s always competition and I welcome another company trying to do it better. That’s what a free market is all about. I’m a premium NING customer but I’m with you Jon; I never would bother contacting NING because their service was so slow.
    Facebook is much larger than NING but obviously their free pages and groups haven’t competed very well. It will be interesting to see where free users turn. I’m all about paying for a worthwhile service.

  4. you know… i think this is such a smart move. if people want free then i would figure most want simple as well which is why facebook has such a monster number of people using their network. It’s hard to compete with a giant like that. however… if you have paying customers who are wanting a more customized experience for their network and willing to pay for it then it just makes sense to me… ning has that market and now with their focus on better customer service then i think ning will rule in this part of the social networking world… plus, you can’t argue with the access to an email list like that.
    incredibly gutsy move… i think it’s going to be a win win for so many people.

  5. Don’t tell ning I said so…but I’d eagerly pay them even more…for more functionality, customer service and bells and whistles to serve using ning for a paid member’s community. Free always has a cost. I’d rather pay up front for what I want and need.

  6. I don’t think their failure to find a way to make the free version sustainable is gutsy. They should have already been serving the needs of paying customers to begin with. This is just bad management.

  7. I to believe that the Brass at ning should have been paying more attention to the paying customers. As being a creator of a free site on Ning I hate to have to start paying as my site is for networking not making money. I feel Ning has put their self in this mess by allowing to many free sites. there should have been a cap put on the free sites from the start. You can find tons of free sites on the Ning platform with just a few members or no activity at all. Ning should have removed them. Anyway I plan on keeping my ning site and pay for it as I think Ning is the safest network to be on.

  8. Firstly, it’s “confident”, secondly, what a brown nose and thirdly, there is more to this world than profit and I always thought Ning were set up in the first place to provide free resources.

  9. Sam, I Agree that they should have done a better job serving the needs of paying customers.  But, making a strategic shift from ad supported to saws is still s gutsy move.  Mostly. Because they had to know it would be unpopular (just read the comments Ive received on this post). 
    Michael, agreed.  Ning was clearly proud of the huge numbers they were posting.  What gets measured gets done.  Perhaps they should have been focusing on business metrics rather than users and networks.
    James, thanks for reading and catching the typo.  I certainly understand your frustration, we have some free sites as well. As to Ning needing to make a profit, this might be helpful:  http://tinyurl.com/36rk2br

  10. Nigel says:

    I agree with the need to move to a paid service, I just think it’s been handled really badly from a communications point of view – most people found out through 3rd parties not from ning themselves and I don’t understand why made an announcement saying they will be no support free sites without offering an alternative

  11. As we learned from the many naive ones with the Internet burst, you have to create value and turn a profit. Good for Ning. They will live a long time to help many more companies.

  12. I am a paying customer. I pay 12.50 a month now. I own a music network where bands can upload their music to give them an audience to listen to it. in order for me to do this ill have to pay 50 a month now because of these changes. A feature which was once FREE is now being charged at a HUGE price.
    I am a teenager with a starbucks job and getting ready to commute everyday. I will have no money to pay for a 50/month network.
    Ning has ruined my dream of owning my own music network (noisetrend.com). This is sad.

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