Home > business, smugmug, web 2.0 > Freetards ruining the web?

Freetards ruining the web?

April 4, 2008
New $20 bills - Proof that money does grow on trees. by Kirk Tanner

photo by: Kirk Tanner


Hank Williams over at Silicon Alley Insider has a guest post up about how VCs are ruining the online tech economy by fueling free services, wrecking it for small and/or premium services. Matthew Ingram has a response out that resonates much more closely with how I feel.

First of all, SmugMug is living proof that you can make it as a premium service. Second, I think you’d be hard pressed to name a market where there isn’t stratification. Cars, airlines, music players, shoes – you name it, there are premium brands and there are commodity brands. On the web, commodity = free. That’s just how the game is played.

There are a lot of reasons why it makes sense for us not to be free, but perhaps my favorite is: We’re forced to hone our business. If we do don’t do it right, we don’t eat. Doing it right becomes priority #1 rather than growth.

There are quite a few reasons I love that there are *lots* of free sites with deep pockets in our space, too:

  • Free training. Lots of our customers go chew up customer service dollars somewhere else first, learning the basics of how to upload, share, etc, before coming to us. By the time they get to us, they know the ropes and getting up to speed is easy.
  • They’ve seen how bad it is elsewhere. By comparison, our product looks amazing. The ‘Wow factor’ is huge.
  • Coattails marketing. We don’t have to spend a lot of money raising awareness of the photo sharing concept – other, bigger companies are doing it for us.
  • Keeps us on our toes. As if our customers weren’t enough to keep us nimble, big deep-pocketed competitors surround us on all sides. Try slowing down and we die.

There is one big nasty downside, though, that really gets me. Every time a free site dies (and they’re dropping like flies), some of those burned customers get gunshy. Sure, we pick up lots of refugees, but there are some people who just get turned off by all photo sharing sites. They lost their priceless photos, afterall. That sucks. 😦

With the market downturn, that last point really scares me. If we really do have another bubble burst in the web space (and I predict we will), free photo sharing sites are going to be devastated.

I just hope they don’t burn an entire generation.

UPDATE: I found our problem! We don’t have a FreeTardis! I’m gonna get one.

  1. April 4, 2008 at 1:59 pm

    Don – good post. Chris Anderson’s Wired cover article about “FREE!!!” is a manifesto on how free sites usually beat paid sites. SmugMug is an exception, but you are after a self-selecting user that is more demanding than most. Most of the subscription photo sites failed faster than the free ones, and look at Flickr and Photobucket with their “freemium” models. Sometimes it’s just not possible to charge every user and have a viable business.

  2. April 4, 2008 at 9:58 pm

    I’m not a regular blogger to your site. I’m not a professional photograher. In fact, from what I’ve seen most of you are much better photographers than I am. In reality, I probably take really crappy photos. However, part of what brought me to SmugMug was an opportunity to back up my family photos. My 3-year old son passed away 2 years ago. The photos I have of him are priceless. I would pay much more than what Smugmug charges me to ensure they are backed up in several places and I won’t ever lose them. (Don, don’t take that as a personal challenge to raise my rates.)

    However, I will pay for service. I will pay for backup in other locations. My son was born in a time of digital photographs (ones and zeros are the only photographs I have). I’ll pay to back them up where I don’t trust my own harddrive or other backup devices. The ~5/month is a cheap price to pay.

    People (I) will pay for premium service. I hope you (Don) realize what people are entrusting you with (and I feel you do). I hope that enough people realize that you don’t get something for nothing, and that you stay in business for a long, long time.

  3. November 6, 2009 at 4:00 pm

    Love it! You got me so excited to get one and start shooting video!

  1. April 4, 2008 at 1:50 pm
  2. April 4, 2008 at 2:12 pm
  3. April 5, 2008 at 4:00 am
  4. May 5, 2008 at 3:28 pm
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