Ello CEO Slams Facebook: 'An Ad Platform More Than a Social Network'

The Ello website

Social networking upstarts come and go like the weather these days. Everyone wants to unseat Facebook, but few have that special combination of technical prowess and viral appeal to lure away even a fraction of its 1.3 billion users.

Ello, based in the unlikely conclave of Burlington, Vt., hopes it’s a little bit different. Since beginning a limited beta test in August, the site has been deluged with requests from prospective members, particularly those upset by Facebook’s ubiquitous advertisements and insistence on the use of people’s real names.

The site, which is still invite-only, looks like a cross among Facebook, Instagram, and Tumblr. It’s spare and white, with plenty of space given to photographs. Users can designate each other as ‘friends’ or move contacts into another category called ‘noise,’ where content is presented in a grid-like layout that’s easier to browse quickly.

The company displays its ideology proudly. On its homepage is a manifesto which proclaims, “We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate — but a place to connect, create, and celebrate life.” Chief Executive Officer Paul Budnitz, 47, one of Ello’s seven co-founders, took some time to discuss those aims further with Bloomberg Businessweek. Some edited excerpts:

So you’ve had a crazy week. What’s happening right now?
Right now, about forty to fifty thousand people are either signing up or joining Ello every hour. We are on-boarding people as quickly as we can. People have to be patient. We launched Aug. 7 in beta. Before that it was a private social network for almost a year with a hundred people on it.

Is people’s dissatisfaction with Facebook propelling Ello?
I think it’s what we built. We made a platform that is fun to use and doesn’t have ads. We don’t consider Facebook to be a competitor. We consider them to be an advertising platform more than a social network. Facebook’s customer is the advertiser. Everything they do is to make money for that customer. The thing that is being bought and sold are the users and user data. … Our business model doesn’t include any of that. Ello is much simpler and cleaner. A social network is a place to be in contact with each other and talk to friends. If it becomes full of ads, it becomes clunky and cluttered and a little violating. That’s what people are responding to and why they are coming over to Ello.

There was news that Facebook will help target ads on other websites, using user data. I actually don’t mind seeing more relevant ads. But do you think that helps your cause?
To me the Internet is becoming one big billboard. Everyone always seems to be building a new app and platform and the way they are going to support it is through advertising. The Internet just gets covered with ads. I live in Vermont. This is a state where billboards are illegal. When you go over the border into New York you suddenly say, ‘What’s different here? It feels so weird.’ And you realize there are Egg McMuffin ads everywhere. It’s one of the reasons why Vermont is so beautiful.

So you are building the Vermont of the Internet?
I don’t know if that’s the right way to put it. I’d say there is Vermont influence.ew

How do you describe the design aesthetic of Ello?
It’s very simple and very clean. We built it so we could show full screen and full quality images and long form content. And high resolution sound is coming very soon for music. Ello was built, really, as the best place to view and look at content and also talk about it and talk with your friends. We sort of took this Dieter Rams philosophy of less, but better. The other inspiration was Captain Kirk. He would just pick up a communicator and start talking. He didn’t have to press a bunch of buttons or call anybody. We decided Ello should be that simple.

So if you’re not taking advertising, how do you plan to make money and build a profitable company?
Ello will always be free. When the beta period is over, we are going to start offering special features, a little like an app store. For a few bucks you can add a special feature. It may not be for everyone. We have thousands of people who have written in with ideas of features they would be willing to pay for. So we know what people want most. There is almost no way this isn’t going to work well. The other good news is that because we aren’t collecting data on our users, there are a whole bunch of people we don’t have to hire, like data miners and ad salesmen. Someone recently asked me what the demographic was of our users. We have no idea! We don’t know age. We don’t know sex. The only thing you really to need to get into Ello is an e-mail address. It makes our life easy. It’s a fairly easy network to run.

Mark Zuckerberg has a habit of snapping up successful competitors, like Instagram and WhatsApp. If he called you tomorrow with an acquisition offer, what would you say?
Ello doesn’t have an exit strategy. We are building a profitable company. We are fairly idealistic over here. We are not building a company to sell, we are building a community we want to be a part of. It’s interesting that we are being compared to something like Facebook. That is a network whose goal is to sign up everyone in the world. On Ello’s home page there is a manifesto and underneath are two buttons. One says ‘I agree,’ and if you click on it, you go to a signup page and can request an invite. If you click on ‘disagree,’ you go to Facebook. If Ello is not what you want, that is totally cool, you can go somewhere else. We are not trying to build something that is for everybody. We are just trying to prove that the Internet doesn’t have to be a billboard.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE