Posterous Sold! What is means for consumers and SaaS startups

I moved my personal blog from self-hosted Wordpress to Posterous in December 2009. Being happy with the simplicity of Posterous I moved the DeskAway blog to its platform in early 2011. In 2010 my wife started blogging so I told her to use Posterous (now she doesn’t trust free web services these days). Posterous launched with big promises on how they were going to change the way people blog and how easy is it to blog via email using their platform.

Their USP was simplicity - seting up a blog (just send an email and you are all setup) is a piece of cake. WordPress was too feature-rich, heavy and Posterous was simple, clutter-free and swift. I could see where they were going and thought they had a very bright future. In early 2010 I interviewed one of their founders, Sachin, for my book. I have a chapter on how easy is it for a non-tech savvy person to setup a blog today.

Posterous was well funded by investors. They raised a total of $10.1 million for a free service that was never monetized. Accordingly to me, they failed to improve their software over the last 2 years. Their inclusion of Spaces last year was a mess. We didn’t need a news feed and all that jazz. Couldn’t they just keep the service simple and stick to their USP? At that time I remember thinking to myself that having a lot of money is a bad thing - you start making changes to your software which don’t really require those changes. Fixing something that isn’t broken is never a good idea. Wouldn’t it be better if they spent time finding a way to get profitable? Or, maybe that wasn’t the plan or they simply couldn’t, as Tumblr and Wordpress beating down their neck.

(Note: Luckily, I moved it to Tumblr in January 2012. Maybe it was a premonition :))

Before I rant more, here are my thoughts on Posterous shutting down…

Good accomplishment for the founding team. A sale to a successful company like Twitter is great thing to have on your track record. I don’t know if they made a lot of money though. Anyone know the deal size?

Such a thing generally sucks for users who are now forced to move to another service without having an export tool from the app. Note to self: make sure to build an export functionality for anything that my company builds.

Their announcement was not communicated well. Either be direct that you won’t be supporting the service in the near future but never ever leave your users guessing. These were the same users who used your service and helped you get aquired. Respect them.

Building a business that is profitable makes so much sense than just going the free route and spending investor money. Dynamics change when you have paying customers. You take business seriously. You’d better make sure you actually take care of them and have a solid backup plan if you ever are going to shut down (instead of an immature announcement). Somehow I have this feeling where free apps don’t much care about their users. Summify did it last month. Amy Hoy echos similar sentiments here on her blog Unicorn Free with a post Posterous Down! The Startup Graveyard Continues to Fill Up.

Apps will come and go. You can’t expect every company to stick around for years. Some will figure it out and some won’t. We will all forget about Posterous in a few months. If you are a consumer then there is nothing you can do but hope that the service you use sticks around for long or helps you transition to another provider (like how Newsberry did) if they go down. If you are a SaaS provider then find a way to get profitable instead of burning through someone else’s money (cause you don’t have leverage when the money runs out). If you can’t and have to sell (I am assuming this was the case with Posterous) then communicate well and help your users to transition (if the app is going to be shut down for good). Build a export/import tool to connect your service with other popular apps, before making the announcement that ‘users may need to move and they are figuring out a way that users can get their data out.’

My prediction is that in the next 2-3 years we will see more Summifys and Posterous-like startups going down when…

  • funding runs out

  • investors want an exit

  • unable to find a revenue model

  • companies get acquired for talent (and the product shuts down)

  • entrepreneurs get burnt out

Maybe, there is an opportunity for startups to help users of “distressed, soon to be shut down” products to jump ship. Who knows, but I am off to find a new home for the DeskAway blog.

March 21 Update: Came across - a tool to export your posterous blogs.