When Selling Out is, In Fact, A Dirty Choice

Matt Gemmell, iOS developer and generally good guy, came out in defense of Sparrow’s recent acquisition by Google and their subsequent announcement of discontinuation, which caused great discontent among users.

Gemmell claims that Sparrow’s users have no right to complain. I firmly disagree with that sentiment, though I don’t disagree with his rebuttal of the sense of entitlement exhibited by some people, as illustrated in his post. But if you’re a paying customer, or even a free trial customer, you have every right to complain. If you don’t complain, you’re implicitly condoning the things that happen, so when something happens you don’t agree with, complaining is a right course of action.

“Selling out isn’t a dirty choice,” argues Gemmell. Except it is. Selling out is a negative term in every industry, and there is no good reason we should pretend it’s a positive in ours. “It’s business,” he continues, as if business has to be this way.

There is an implicit promise in the act of doing business. It is a promise of respect and mutual trust, where the business offers the customer something of value, for which the customer pays money. The free-but-paid-with-advertising model has made this promise blurry, but not absent. When a company sells itself to a bigger company as a talent acquisition, leaving the product—and, consequently, its customers—out in the cold as a result of this acquisition, it is a reneging on that implicit promise.

It is disrespectful towards customers to say “I am going to charge you for this product” only to then revoke the product later on; that is what is called a loan, a temporary use of a product or service. But in the case of most startups that get acquired and have their product killed, it is never communicated in any way that the business agreement was a paid loan, not a purchase.

This is also why I don’t consider startups that offer a free product funded solely by investors a business. If you’re not charging anyone, you’re a service that is using its customers (or users, really) as a means to enrich your product, and the “product” may well encompass both your software and yourself as the developers. If you sell your company without having made a single dollar of profit—or worse, revenue—you’re not doing business at all. You just sold yourself as a product.

Sparrow is somewhat unusual in that the product is left alive—for now—but will no longer be developed on, and their payment model was a single-time purchase (as opposed to a recurring one). It is disappointing for customers in that they did everything we as businesses can ask of them to support our endeavors—pay for our product; everything they do beyond that is a bonus—and yet even then, the customers were left out in the cold. A mild cold, perhaps, in that the customers can still use Sparrow as it is today, but the disrespect they experience is real all the same.

Marco Arment’s argument for healthy businesses only goes so far:

Instapaper has had multiple similar inquiries from large companies over the last few years. We’ve never gotten very far in talks because I don’t want Instapaper to shut down, I don’t want to move my family across the country, and they didn’t want to pay enough — for them, they’ll pay a premium to hire me, but they won’t pay much for a service they’ll shut down immediately and an app they’ll throw away.

I was only able to reject those offers because Instapaper is a healthy business, and the life that Instapaper provides for me and my family is better than what the big companies offered.

So what if some company did offer Arment a big enough paycheck that he would move his family and kill Instapaper for? Where does Arment draw the line? Is it at a certain dollar value, or is he true to his principles and would he never sacrifice Instapaper? Perhaps Arment is fortunate in having a healthy business, but unfortunate in that no company finds him or Instapaper worth a significantly high amount of money for it to ever truly question his dedication to those principles.

That was, evidently, not the case for Sparrow, despite widespread praise and many paying customers. The lure of lots of money nearly always brings out the worst in people, and its temptation can be hard to resist for anyone. But, it’s a lot easier when you make your core business principles about things other than money—and respect for your customers should be prominently among them.

You know why thus far I haven’t lamented Instagram’s acquisition by Facebook? Because they made it a deal that showed respect for their users; the product was allowed to live and continue to be developed on, and its community to continue to thrive. I may be disappointed that they didn’t try (hard enough) to make Instagram an actual business, rather than a collective product of software and people, but that disappointment is separate from my happiness to the team—several of whom are good personal friends of mine—for their well-deserved success. Instagram has made the lives of many people better or more enjoyable in some small way, and it gets to continue to do so.

Similarly, when Typekit was bought by Adobe, that deal was fully in favor of Typekit as a product and as a business; the customers were not left out in the cold. In fact, the acquisition opened up opportunities for Typekit as a product to be an even better service, to far more people. In that deal, the product itself was given the love and respect it deserved, which one could reasonably expect to be the reason for its existence in the first place. (Unlike, say, products that exist only to serve as a conduit for its creators to be acquired for millions of dollars.)

Typekit and Instagram sold. Sparrow, like so many before them, sold out. The discontinuation of further development on the product may not be as disrespectful to its customers as the full killing of it, but it’s close enough for widespread discontent among those (paying) customers to be fully justified. Maybe Sparrow’s creators will get to make Gmail a significantly better email client for the world; but maybe the priorities of a giant corporation are not so much concerned with that. I think a lot of the discontent stems from the fact that many of these customers weren’t using Gmail (as an app) in the first place.

A healthy business is what every company ought to aspire to, right? True enough. But I think an even bigger priority is for the business to focus on providing a product that actually makes a difference. Just look at Wall Street as an example of what happens when the sheer focus on money by itself, rather than as a facilitator for goods or services, corrupts every sense of decency and ethics in big businesses. I would much rather the software industry not head in the same direction.

There are two ways to look at business: one is to make money, and one is to make the world better in a (financially and otherwise) sustainable manner. I reserve my respect and admiration squarely for those who conform to the latter, and I encourage you to do the same.

Update: make sure to read my follow-up on this piece.

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