May 29, 2018

Imgur's Imagination

I remember when Imgur announced their initial launch. I asserted then that making money off hosting images was either impossible, or nearly impossible. My primary point, which has probably been lost to ravages of time, was that business models don't always align with user's needs.

Now, here we are many years later and irregardless of poorly formed consensus about the "rightness" of my argument, it appears my words had some weight. It was announced today that Imgur was "caving to video" to attempt to achieve profitability:

Imgur’s Chief Operating Officer Roy Sehgal, its Sheryl Sandberg, tells me that as of recently “we were cash flow positive” before revealing “We expect to be profitable this year.”

Either you are profitable or you aren't. You can't be both.

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Well. You CAN be both if you were living at near break-even with the thought there was no chance in hell of massive growth/exit and then some idiot investor came along and wrote you a check for $40 million because they saw you had a bunch of free users who could be exploited for this that and the other, where "this", "that" and "other" are defined as features no rational user would ever ask for, but that most irrational users will use without thinking about the drawbacks to their use.

Twitter, by itself, has devistated government by not thinking through proper features. Think about it.

In the case of holding the user's experience of outcome (not use) lower than the expected return for investors allows them to be profitable faster. Hard to argue with that if you are in on the deal.

In the meantime, there are a whole host of other solutions lined up to take your place.

Rule #432: Fight for your users, not your investors.