App.net’s subscription renewal rate: Enough to be profitable and self-sustaining, too low to pay employees

App.net today revealed the results from its first major round of subscription renewals a few weeks ago, which coincide with a year after the original launch of the Twitter alternative. In short, while the company didn’t share the exact renewal rate, it did say App.net will continue to coexist, but only with contractors improving the code.

The renewal rate was high enough for App.net to be “profitable and self-sustaining on a forward basis,” meaning the revenue covered operational and hosting costs. As such, there will be no changes to the API or the service: “App.net will continue to operate normally on an indefinite basis.”

The renewal rate was not high enough to pay full-time employees. In other words, App.net will no longer employ any salaried employees, including co-founders Dalton Caldwell and Bryan Berg. The duo will continue to be responsible for the operation of App.net, but no longer as employees. Contractors will continue to help with support and operations, as well as any new development projects.

The situation gets worse. App.net will be winding down its Developer Incentive Program and will reach out to developers currently enrolled in it. The decision was made “as part of our efforts to ensure App.net is generating positive cash flow.”

The main good news to come out of this is that the company will be open sourcing “a larger and larger percentage of the App.net codebase.” In fact, it has launched a new open source page at opensource.app.net and released the code behind its microblogging web application Alpha on GitHub.

App.net understands that it will only manage to survive if the community wants to keep it alive:

The continued support and interest of the App.net community is vital the continued health and wellbeing of the platform. Depending on the revenue that App.net makes, we are open to increasing or decreasing the budget we can allocate towards additional development. If revenue rates start to tilt upward we would be excited to budget additional development resources. In any event, our intention is to have the App.net service continue to operate for as long as there are customers willing to support it.

Right now, the situation doesn’t look promising. We will have to wait and see if giving the community even more control over App.net’s future will help change its trajectory, or not.

See also – App.net introduces a $5 per month plan, drops member price from $50 to $36 per year and App.net launches Backer, a service to help startups and developers crowdfund new features