What we need to learn from Ning

Ning offered free community tools to organizations. You could add quickly some membership-based tools such as forums, newsletters and blogs to your website. It was almost a no-brainer for some clubs and small businesses. It was free.

Note that I use the past tense to describe Ning. It’s now a fee-based service. Mashable has an interesting take, “Ning: Failures, Lessons and Six Alternatives.”

I have two takeaways from this.

First, free is hard to sustain. As noble as it is, the economics is tough. You have to pay someone a lot of money so you can give away services.

Of course some people will seize upon this as a reason for newspapers to turn to paid-access models. That’s another debate for another day.

This doesn’t mean advertising based revenue models are doomed. But it means you have to be realistic about potential ad income and be open to freemium services.

Second, don’t rely on free services. Right now a lot of organizations are scrambling.

Ning wasn’t great but it was free.

Now they have to find someplace else to host forums, blogs and social networks. Mashable has a list of alternatives so these groups can set up new networks. That’s an inconvenience to community members.

And how long before those free services go away?

This is a good time to assess how much you rely on free services. I’m talking about Google, Facebook and Twitter. What will you do if they decide to charge you for your activity?

Sure it may mean a loss of users to those companies and might signal their doom. But that still would make the services less valuable to you.

Be careful with free services. There are hidden costs that come with them. You have fewer expectations of reliability and quality. If you pay, you may gain the quality and solid foundation that allows you to build your business.