The Sad Reality Of Silicon Valley

by Jason Falls |

Say goodbye to CoTweet. As of February 15, the free version will no longer be offered. Free customers will be given a chance to transition to ExactTarget’s new Social Engage product that is essentially an improved version of CoTweet’s enterprise product, but they’ll eventually have to pay for it. And frankly, they should have to. The innovation and integration with ExactTarget’s long-standing excellent email suite isn’t something the company should give away.

And it’s not something they have to. ET supplies email marketing and (now) social media management solutions to thousands of customers worldwide. There’s a barrier to entry from a price perspective that lies generally just north of what most small businesses can really afford. But that is to be expected from technology companies, especially those rooted in Silicon Valley (which CoTweet was, but ExactTarget wasn’t. ET is headquartered in Indianapolis and was co-founded by my friend Chris Baggott, now Chairman of Compendium.)

Still, CoTweet’s lifecycle is what we have to expect from technology companies. It goes like this:

  • Start free to gain users.
  • Reach critical mass and start charging, but leave a bare bones free product so you don’t alienate anyone.
  • Begin focusing on enterprise companies that have more money to spend on your service than small businesses.
  • Get acquired.
  • Phase out the free so it doesn’t continue to distract your money-making ability.
Image representing CoTweet as depicted in Crun...
Image via CrunchBase

It’s good business, even if it hurts small business. But Silicon Valley, and technology/software companies in other similarly labeled cradles of the world, don’t much care about small businesses. No one ever got rich helping the little people.

Mind you, this isn’t a criticism of ExactTarget. It’s a lamenting of the state of our world. I spoke with CoTweet co-founder and CEO Jesse Engle last week about the move. Jesse is one of a handful of technology executives who will occasionally call and fill me in on things. I’ve always appreciated that. We’ve talked about a variety of things over the last year or so, some CoTweet/ET related and others not. Jesse is a really good dude who wouldn’t turn his back on anyone. He’s also a damn fine businessman. Which is why CoTweet is being retired.

It’s sad, but it’s business. Jesse and his cohorts are doing the right thing. The freemium social media engagement tool marketplace is saturated and if ExactTarget can’t continue to service the free product to keep it competitive, why waste people’s time?

This will continue to happen to the platforms we love so. None of them really focus on small businesses. And if they do, they soon won’t. They’re all going after enterprise clients. That’s where the money is. Get a wad of them and you can get acquired. Get acquired and you can cash out, sit on a beach and plot your next company.

For more than a year, from 2009 through much of 2010, I had a great relationship with PostRank. They even volunteered to help me produce some of the most popular posts in the history of this website — rankings of the top blogs on various platforms. When I reached out to them after their acquisition by Google to perhaps refresh the lists, I was politely told they don’t focus their resources on that type of work any more.

uBerVu is one of the latest companies to pivot toward the alleged greener pastures. The upstart social media monitoring company was lauded by many, including me, for finally offering a social media monitoring solution that wasn’t hundreds of dollars per month. In the fall, they reorganized, refocused and are now hundreds of dollars per month.

As a business person, I don’t blame them. I understand.

But I hate it.

No one’s watching out for the little guy anymore. It’s a rush to acquisition, then increased revenues and cash outs. And to technology companies, small business isn’t good business. I worry that’s going to leave 97 percent of the world’s entrepreneurs and business owners out in the cold.

Even the handful of angel investors and venture capitalists I’ve talked to about the problem shrug it off. You don’t get rich helping little people. (If you have a soft spot in your heart for small businesses and have some money to invest, we should talk.)

Maybe one day I’ll be in a position to do something about it. In all likelihood I won’t. Doesn’t mean it won’t bug me as, one-by-one, our favorite free tools are set to pasture.

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About the Author

Jason Falls

Jason Falls is a leading thinker, speaker and strategist in the world of digital marketing and is co-author of two books, No Bullshit Social Media: The All-Business, No-Hype Guide To Social Media Marketing and The Rebel's Guide To Email Marketing. By day, he leads digital strategy for Elasticity, one of the world's most innovative digital marketing and public relations firms. Follow him on Twitter (@JasonFalls).