Ning, founded in 2004, evolved from a social app platform to a provider of social networks, reaching 2 million networks by 2010. Despite its rapid growth and significant funding, Ning struggled with monetization and faced challenges related to customer expectations and market competition. Key lessons learned include the importance of early monetization planning, managing customer segments, and the difficulties of scaling and pivoting in a shifting market landscape.

1. (Stanford BUS-21)
Martin Westhead
Mastering Marketing
Free Case-Study: Ning
How to make money
by giving things away

2. Overview
 Ning history
 Monetization
 Analysis
- Successes
- Challenges
- Lessons
Disclaimer: My view only based on limited info…

3. HISTORY

4. Timeline
2004
- Founded 24hr Laundry
2005
- Launched platform to create social apps
2006
- Pivot to focus on 3 apps: Videos, Photos, Groups
2007
- Ning launched based on combining these apps
2009
- 1M social networks
2010
- 2M social networks
- Jason Rosenthal takes over as CEO
- Free -> subscribed
2011
- Bought by Mode Media (formerly Glam)

5. 24 Hr Laundry (2004)

6. Founders
Gina Bianchini Marc Andreessen

7. Funding
 Unknown amount - Series A
- Jan 1 2007…(possibly earlier)
- Investors: Marc Andreessen, Reid Hoffman, SV Angel
 $44M Series C
- Jul 1 2007
- Investors: Legg Masson
 $60M Series D
- April 1 2008
- Investors: Allen & Company
 $15M Series E
- July 1 2009
- Investors: Lightspeed Venture Partners
 Total: $119M

8. Platform for building
Social Apps
 Toolkit for building and hosting social network
applications
 Build your own Facebook, Linked-in, Myspace
 Underlying functionality
- User accounts
- Friends
- Blog posts and discussions
- Messages
- Photo, Video and music sharing
 Mix and match and add your own

9. The Demo App took off

10. Pivot
 Hosting other people’s code is hard
- Poorly written code hard to control
 More interest in the application than in
developing
 After several years of not being a social
network company…
 Ning was born, a provider of social networks

11. Product turning points
 2007
- Ning launched
 2008
- Shut down API
- Ban Porn
 2009
- Ning as a hub

12. Success and Celebrity
 1M networks 2009
 2M networks 2010
- 40M users

13. New CEO
 2010 Jason took over
 Changes
- Laid off 40% team
- Move to paid
- Building subscription
business
Jason Rosenthal

14. Ning bought by Glam
Media
 Tech-crunch estimates they paid $150M
 Glam (now Mode) Media
- Advertizing
- Specializing in the long tail
- Potential monetization engine for Ning
 Ning 3.0
- Relaunch of subscription product
- Totally new user experience

15. MONETIZATION

16. Early Freemium
 2007 Premium Services
 Place holder
- Show users they would
have to pay for something
someday
 Created two classes of
customer / user
 Plus additional
monetization challenges
down the line

17. Virtual Gifts

18. Advertizing

19. THE SWITCH TO PAID

20. Pricing

21. Why Subscription?
 Ads
- Best inventory sold
- Hard to target the log tail
- Hard to identify brand-safe content
 Value conflict
- Free sites – maximize page views
- Paid sites – want control
 User generated content policing
- Costly and risky

22. How did the new model
fair?
 Only lost 15% of traffic
- Although millions of networks
 Careful management of customer
communications paid off

23. Customer Reaction
Some customers pleased...
...others less so…

24. Competition?

25. ANALYSIS

26. Successes
 Successful product
- Rapid growth
- Diverse and fascinating use-cases
- People loved it
 Scale
- In the top 20 websites in the world
 Hot area
- Social networks
 $119M funding

27. Challenges
 Too many pivots
- Long-time users fatigued
- Flip-flopping on white label
 Limited cross-site network effects
- Each Ning was an island
- Tried to fix it but failed to find the right product
 Building communities is hard
- Not just a technology problem
- Needs an “abundance” approach
 Market perceptions changed
- Early on Social Networks were being discovered
- Today: Facebook + Twitter
- Harder to create mindshare foothold

28. Lessons – Scale isn’t
everything
Internet scale does not guarantee monetization
 Ning had scale, engagement and growth
 Still failed to succeed at Monetization

29. Lessons – Think Ahead
It pays to think about Monetization early
 Sold premium ad inventory
- Worth $1000’s per month
- For $19.99
 Hard to put the Genii back in the bottle
 Early paid networks include Marquee VIP
customers

30. Lessons - Pivots
You only have a small number of pivots – use them
wisely
 Hard to bring existing customers along
 Each pivot reduces user faith
 Bigger you are the harder the pivot
 Be lean
- Treat each model as an experiment
- Understand clear criteria for success
- Pivot early
- Fail fast

31. Lessons – Network Effects
Network effects
 Double viral loop
- Networks pull in users
- Who create networks
 However
- Unable to leverage cross site traffic
- Each site had to build its own following
- We needed something like the Tumblr model

32. Lessons – Two Customers
Paid and Free users in opposition
 Different user segments
 Different expectations
- White label
- Ownership
 Early premium offer created more problems
than value

33. Lesson – Customer
Expectations
Manage Customer Expectations
 Move from Free to Paid managed well
- Consultation with customer council
- Overall transparency
- Advanced notice
 Creation of Paid customer segment
- Created unreasonable expectations
- Charge was way too low

34. Summary
 Ning history
 Monetization
 Analysis
- Successes
- Challenges
- Lessons
Disclaimer: My view only based on limited info…