I had an idea for a website: crowd-maintained list of downgrades for products, e.g. "Product: Twitter, Feature: login nag-wall when you scroll down. First Noticed: $month 2021,; Feature: killed the open API, Date: ___", etc. I still have the idea, if anyone wants to implement it, feel free.

Hell, it's fractal, all the way from major services to operating systems to the most minor app store apps. Products get better until someone decides they aren't growing fast enough and then they get worse until they die or someone sane realizes that your video file player doesn't need its own social network.

I bet you would get a much better conversion rate if you implemented a login wall on that service though!

This is what I call “cashing out the social capital”.

I don’t know if I’d call it a business model, but it’s certainly something that many modern businesses do.

Ah, so that's what Blizzard/Bethesda have been doing. :D

And what Notion will do really soon.

And EA

and Dropbox

I will never forgive Dropbox. I spent a decade evangelizing them as the way to do cloud file storage to all the tech-illiterate people in my life and then Dropbox decided to limit free accounts to three devices. The sheer number of pissed-off and/or confused phone calls I got from all of those people was enough to make me wish eternal suffering upon the Dropbox executives.

That is basically the dictionary definition of cashing out social capital: be so good that people evangelize your brand, then start aggressively putting profit first once you reach a critical mass of public awareness.

I think they didn't cash-out on social capital. They grew, and became "enterprise first". The recipe is to limit free services and increase the price of paid service, so only big customers and serious users get attracted to you.

Trello did the same thing. They killed their single-user friendly features and moved to enterprise first, gouging serious solo users in the process.

I'm still subscribed to both, but I'm not as happy as before.

The 1:1 analogy is to investment capital: let's say someone started a successful company that got purchased and has now invested the $5mil USD they got paid (the capital) with an annual rate of return of 5% giving them $250k/year.

They could reasonably retire off just the return on investments.

However, if they start using the $5mil to buy houses and cars and whatnot, they are "cashing out the capital". As they spend more and more, the return on investment drops but everything looks great from the outside: they have lots of cash, a lot of "things", and so-on. However, look ahead a few years and they might be left with $500k invested giving them a return of $25,000/year and it's possible that they would no longer be able to retire off that putting them in to a possible tail spin of needing to spend the remaining capital just to pay the monthly bills.

I propose that this is what companies are doing with their "social capital" (which includes the public's impression of the brand and that brand's work on building up their customers). Creating a brand with integrity and values while working to solve a problem well builds social capital. All they have to do is "maintain the balance" (stay true to the values and mission that got them there) in order to keep getting the "return on investment" (continual influx of new paying customers). However, if they choose to start sacrificing values and quality for the short-term gains they can definitely do that. On a quarterly balance sheet it even looks like they are "rich": "We're spending less on dev time by ignoring bug reports and less on servicing free customers while also converting 10% of those old free customers to paying customers. The bottom line is way up!". But because they've sacrificed the values that attracted those customers in the first place new potential customers will start looking more critically, or will choose a competitor, or will even start their own competing service. It's only a matter of time before the company looks at the balance sheet and wonders why income is down. If they are really looking to ruin the company they might even point fingers like "we used to get $250k/yr, but now we're getting $25k and our competitor is getting $225. we must conclude that the market is saturated and we have to go on the offensive against that competitor.", when what they could do is simply accept that they have to start over to rebuild the social capital so they can have the same level of return again (or maybe even take the lesson and work harder to build more capital and have a bigger return in the future).

Yes exactly

The challenge is every PM at the company thinks they can see a step function increase in engagement, retention, etc. if they just add the right features.

This! Can't get that promotion until your feature that somehow increases some kpi somewhere in short term.. this why lot of sites go through complete redesign when everything is already working

I don't think so.

Yes, the "first" Evernote had great features, but it was all over the place. No clients had the same set of features, and web side was even worse.

When they ditched everything and rebuilt all clients from the same base, they've lost some of the cool features, but I find it much easier to use and rely on.

Only after that point I bought a subscription, fully went into it, and currently building my knowledge base inside it, and collaborating on some stuff.

Simpler is not always worse. Yes, the old Evernote was a "road warrior's utopia", but the current incarnation works much better on a cross-platform perspective, and I'm a happy camper.

I stopped paying for Evernote two years ago. I guess the more individual customers leave, the more it makes the management depending on business users, so the less they care about individual customers.