[A picture of private offices at Fog Creek Software] Alert! This ancient trifle retrieved from the Joel on Software archive is well-past its expiration date. Proceed with care.

Joel on Software

Another Business Model That Doesn't Seem to Work

by Joel Spolsky
Wednesday, October 25, 2000

I used to have Atomz.com as my search provider. That means that when you typed a search request in that little search box in the margin, it actually sent the request to Atomz.com. They were responsible for indexing my site once a week and displaying the results.

Atomz.com is "free", with a catch: as soon as you have more than 500 pages on your site, they send you a nice little email:

I just wanted to take this opportunity to remind you that your website has exceeded the 500 page document limit for the free account that you currently have. Did you realize that 100% of your site is not currently being indexed? Only the FIRST 500 PAGES are being indexed. Is this an important concern to you and the services that you provide to others? If yes, upgrading to an atomz.com prime service will solve these issues.

Nowhere in the email does it tell you how much it's going to cost for the upgrade. A bit of searching on their web site gave me the answer: $100 per quarter. Wow. That's expensive.

Search on my site is not super popular; I get about 60 searches a week (out of about 35,000 page views). But I think it's an important function. And I hate being tricked into upgrading from a 'free' service to a 'premium' service.

Atomz.com is hoping to achieve what I call 'stealth lock-in'. They don't even want to you realize that you're becoming dependent on a service. In the future, when you're hooked, they can start charging you a bundle, and you'll pay them just to avoid the cost of switching. There are a lot of Internet companies that are trying this approach. Juno constantly bombards its unpaying members to upgrade to the services that cost money. All the various xdrive/idrive/freedrive/mydrive clones have this business model. My buddy Elan's company earthnoise, which gives you 50M of online video storage free, tries to upgrade you to the premium service at $4.99 a month when you realize that 50M is not that much online video.

The question here is: how much lock-in do these companies really have? That's what is going to determine whether their plans work or fail. Juno has a lot, because it's an email service, and if you switch your email provider, you have to tell all your friends about the new email address. If you printed a Juno email address on your business card and handed it out to prospective clients, you're going to be scared to switch away. And indeed, Juno has been reasonably successful at getting people to upgrade.

All the free-hard-drive-on-the-net companies have zero lock in. They are going to have a problem. Besides the fact that there is almost no barrier to entry, incredible competition, and the service is stupid to begin with, these companies are simply not going to succeed, period.

Now, back to Atomz.com, my old search service. Lock-in? Well, I'm afraid not. It took me 20 minutes to switch over to Google. Kiss them goodbye.


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About the author.

I’m Joel Spolsky, co-founder of Fog Creek Software, a New York company that proves that you can treat programmers well and still be highly profitable. Programmers get private offices, free lunch, and work 40 hours a week. Customers only pay for software if they’re delighted. We make Trello, insanely simple project management, FogBugz, an enlightened bug tracker designed to help great teams develop brilliant software, and Kiln, which simplifies source control. I’m also the co-founder and CEO of Stack Exchange. More about me.

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