Can someone educate me on the difficulties in raising money from your user base?
It seems like businesses like this should give fair warning to their users before transactions like this occur to make sure they don't have a better option than shutting down or selling out.
Evernote has tens of millions of paying users. It doesn't seem too far-fetched to believe that each user would fork over on average $50 (as an investment, presumably) to just freeze product development, fix bugs, and improve performance.
Put another way, I'm pretty sure Evernote could have raised hundreds of millions from their user base.
Why not try that approach? Are there regulatory issues that make it unfeasible?
Paying recurring for an app should make this problem non-existent. If $5/mo or whatever doesn't allow you to deliver a stable, performant product, then you need to reconsider your pricing or your business model. Evernote isn't a startup and they should have this figured out by now. And do not do a release that amounts to "look at this whizzy, non-core feature we've been working hard to add (see: chat) which means we didn't get around to fixing all the boring issues with the core product you're paying for"; that's just insulting. The only thing I imagine worse, if I'm already paying you money for the product, is for you come to me with "Oh...you want it to work? Fix the bugs and the performance? That'll be a $50 'investment'.". That guarantees I'm going to look elsewhere real fast, because fixing bugs and improving performance isn't a one-time thing and you'll be back to extract more from me at some random time in the future where your business decisions don't cover the next shortfall.
I'm imagining that $50 raised from 10 million people ($500m raised) would allow for an outright recap of the entire company, including bringing in new management that serves the users' best interests.
I agree it isn't ideal, but as a user, it's far better than allowing Evernote to get sold to someone whose goal is to raise prices and squeeze profits. Many Evernote users like me are in a situation where the switchover cost is several orders of magnitude larger than $50. So, the dynamics might look more like 1% of the user base investing $5000 each.
$500 million is something on the order of the annual opex budget of my entire division of ~800 people. Are you seriously proposing that an app like Evernote requires that kind of a nestegg to deliver on users best interest in addition to a subscription model? Better than "maybe we should charge $1 more a month" or similar? Color me dubious.
Huh? You're misunderstanding my point. It's not that a crowdsourced financing is required to achieve some outcome. I'm simply pointing out that it would have been a better option for all stakeholders than what just happened.
ICOs are technically a way, and scams aside which wouldn’t apply to Evernote if they would have used it, there is still a fair amount of legal ambiguity in doing it. There has been many voices pushing for creating a regulatory framework to allow doing what you are asking for.
It seems like businesses like this should give fair warning to their users before transactions like this occur to make sure they don't have a better option than shutting down or selling out.
Evernote has tens of millions of paying users. It doesn't seem too far-fetched to believe that each user would fork over on average $50 (as an investment, presumably) to just freeze product development, fix bugs, and improve performance.
Put another way, I'm pretty sure Evernote could have raised hundreds of millions from their user base.
Why not try that approach? Are there regulatory issues that make it unfeasible?