There has been a lot of criticism lately about ello being funded by VC. This seems to be the big counter-argument to their anti-ad, anti-datamining policy. I disagree with this criticism, and here is why.
VCs want their money. There is no question about that. Personally, I don't have a problem with this, but I do acknowledge that it creates some pressures that lead to nasty things. In this case, though, it comes down to a question of "what bet are the investors making."
Investing, particularly early-stage VC investing, is a form of gambling. Nobody can predict what companies will survive and thrive. So, investors make bets. Those bets, in turn, drive the valuation of those companies...at least, until they become mature companies or get bought.
From the VC perspective, there is a problem. The market for ad-supported social networks at all stages of development is both saturated and over-valued. But there is also a growing resentment around the "the user is the product" mentality of these networks. The problem is that there is no way to bet on that user sentiment.
It may or may not happen that people really care about having ad-free social networks. Nobody can tell. But, if you are betting billions on ad-supported networks, it's a good idea to hedge and also bet on the app-store model that ello is pursuing.
With TIME saying that fbook is going to lose 80% of it's users, it is a really good idea to be making alternate bets right now. If ello is even modestly successful, their valuation could soar by virtue of lots of people wanting to hedge.
What is comes down to is this: the VC investors are buying the "no ads, no datamining" proposition because they think that can make money. It is in their interest to protect that, not destroy it.