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

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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.