So, apparently targeted advertsing may be coming to #Bluesky...
This is not a surprise at all, and has been predicted for a while. Despite the protestations from Bluesky enthusiasts saying that selling domain names was going to do it, the BS business plan never made any sense.
And now they are paying for server costs for 20+ million users and watching their $15M investment from Blockchain Capital et al. dwindle.
Reality bites, and it bites hard.
@mastodonmigration they’ve always been careful not to rule out advertising so I doubt anybody there is surprised by this. A lot depends on market conditions when they do their next raise - they were smart to close the $15 M when they did, and my guess is their server costs won’t eat into that too quickly, but then again they’re hiring 100 contract trust and safety people and that might be just the tip of the iceberg. It wouldn’t surprise me if they try some kind of premium subscription before advertising but it’s hard to know far get they can get with that. Time will tell!
What's the avg monthly cost of a contract trust and safety person?
If you want to make that $15 million seem either gigantic or trivially small I can do that very easily, the range of values—depending on what you need and what you are trying to accomplish—is so large. It depends on a variety of assumptions we don't know, and I don't know their current operating costs
We're basically going to be arguing over fermi estimates, and that's a fun thought exercise but won't get us all that far if there's a point.
$15M is not a lot of money when you start throwing around numbers like 100 contract employees. This isn't rocket science. It's just business. Anyone can do the math. 20 full time employees at tech industry salaries plus these 100 contract folks at whatever they cost times 2 for overhead. Plus other costs like hosting, rent etc
There is nothing evil about this. It just means you need to balance the equation by either making money or getting more investment.
Depending on where they are and what kind of trust and safety work they are expected to be doing that could be—with overhead—as little as $1k per worker per month.
Or less.
Or it could be as much as $5-10k per month.
The range on this is gigantic and it depends on too many factors that are not revealed by just saying they are hiring 100 people for a task.
Fair enough. As an exercise try to fill in a monthly cash flow spreadsheet for Bluesky given what is known and a few assumptions about what it all costs. It can be just gross approximations to get an understanding of what Jay Graber faces everyday.
This is not to criticize anything, other than perhaps any misrepresentations of the difficulty in making it all balance while retaining control.
Indeed, it is refreshing to hear her say they may have ads. This is obvious to anyone who looks at their business, so it is good that she is saying it, even if it sort of contradicts what she has said in the past. Understand people are saying she always left wiggle room, but that's not the impression she projected. Anyway, it's good we can move on to a discussion of how Bluesky sustains a business model. That will be interesting to hear.
I’m sure they’re doing the spreadsheet exercise for their board and potential investors and their own decisions. From the outside there isn’t enough info to do more than back-of-the-envelope calculations: they’ll most likely need to raise money in 2025, so are almost certainly thinking about it now.
And no it doesn’t contradict what they’ve previously said, it contradicts what people have previously misunderstood about the carefully crafted language they’ve used. They’ve also been very explicit about the need to consider the company as a future adversary. Most people I talk to over there very much have the attitude of “we’ll see how long it lasts, let’s enjoy it while we can, and hopefully it won’t go downhill too much too quickly”.
Love that one. Heard her say that in an interview. My company as my future enemy. Such a concept for these times.
Right. From a startup perspective, there’s a business model, and then the question of how you get enough funding to get to the point where your business model is self-sustaining (typically cash-flow positive and funding needed investments).
“We’re on track for a big success and we’ll figure out the business model”, prettied up appropriately, has historically been enough to get enough funding to try various alternatives for a business model, Bluesky’s got an even stronger case because they had a plausible plan to keep costs relatively low.
Of course these are not normal times, who knows what VC markets will be like in the new year, so they may have to pivot to get serious shut monetization more quickly than they had hoped … time will tell. In any case, keeping options for potential monetization open certainly makes sense!