actually works with the business. There is always very high skepticism from users and the community—people say “You are free right now, you have no business model, you are never going to figure it out, so you must be selling our data.” Which is hard to hear—they don’t know how many whiteboards are filled with the things we are working on.
But at the same time, there are so many companies out there that have a big question mark about whether they will ever be able to make money. Even with Instagram, there was not a super clear path to how they might make money. We were making money [on app sales], actually a good chunk of money, but we recognized that that was not the best way to do it. There are very few billion-dollar companies running just off of paid apps. Our biggest problem right now is trying to get people through the door, and it’s hard to put a $4.99 wall in front of them before they even understand the value. But we believe this is something valuable that people will pay for, and right now it’s a matter of restructuring how that works. I know that drives people in the industry crazy, because I am not giving road maps on when this stuff will happen, but I can absolutely assure you that our intention is not to run this company out of business.
WR: Is advertising out of the question?
NW: I’m not touching ads until publishers are comfortable with the idea. It seems crazy to say to them, “Look, we took all your ads off and put on our own. Enjoy.” That’s a line we really don’t want to cross. But if I were starting a new business, it would be an ad network that solves that problem for us and Flipboard and Evernote. Why isn’t there an easy way for publishers to syndicate their content across all of these places and still collect ad revenue?
WR: That’s sounds like the kind of thing that would require an industry discussion about new Web protocols or standards for portable content and ads. Along those lines, do you ever talk with the folks from Longform or Instapaper or Readability? Is there a tight-knit community of “content consumption app” people talking about these issues?
NW: Aaron Lammer from Longform and I generally meet up when he comes to San Francisco. He’s an awesome guy. I have actually never talked to the Readability guys. Marco and I met up and got a drink at WWDC two years ago. That’s about it. I talk a lot more with Flipboard, Pulse, Zite, and that community. A lot of them are super interested in trying to solve this stuff as well. So we are not siloed off—we are talking to a lot of people. They just happen to not be the reading-app people.
All of us should be talking more, because if we could agree on some things it would help the industry as a whole. There’s something about the competitive space here that has become very personal. I don’t know if you’ve followed the stuff about the infighting between Readability and Instapaper, but it’s all been very personal and kind of catty. It just doesn’t help anybody to drive this stuff forward.
WR: This kind of cooperation you’re talking about has happened before. Probably 10 to 15 years ago, the early people in the e-book industry got together and agreed on content and formatting standards like EPUB, even though they were all in competition. I think what helped is that they wanted to make sure that e-book standards wouldn’t end up being set by some monopoly.
NW: Things are happening so fast in this space that it’s hard to imagine there would be a monopoly. For users, the switching costs get lower every day, which means it’s easy for some guy to come out of nowhere and create a great new experience. But at the same time, we all need to be a bit cautious. If you go back to iTunes, all of these other companies like Sony were trying to figure out [digital music sales] and Apple came along and just dominated and solved it. If we just keep fighting each other and not working together, there is a good chance some big dog could come along and just solve it. And then publishers might say to consumers, “Okay, you can’t put your stuff in Pocket anymore.” That’s what we want to avoid.
WR: What should Pocket users expect to see from the company over the coming year?
NW: This year the main things you are going to see are Pocket continuing to expand to other platforms, and continuing to see how we can make “save for later” something that anybody can grok and anybody can use. We have started digging into our analytics to try to figure out why users do one thing over another, and how we can improve the experience and make it easier. Our product is one of those where it’s very difficult to get them to a level of activation where they have it totally figured out. But once we have them started, we retain those people at an absurdly high rate. So right now our big focus is on how to make everything simpler.
