In case you've been living on a remote farm in Scotland or taking a vacation in the Sahara, you'll doubtless know about the new social media platform Ello. It's currently running at about 160,000 sign-up requests every hour. It's new and and invite only which means everyone wants to be a part of it. It's the digital equivalent of a roped-off area for VIPs in an exclusive club. There is no advertising and the founders/developers have a manifesto that claims to protect your privacy. It sounds perfect.

It's not free. That's all you need to know.

The internet is littered with start-ups that failed to understand that people will not pay for the right to use social media. They would rather sacrifice their privacy and become the company's product.

About two years ago, App.net launched with a similar idea - no advertising, open API, lots of developers writing applications that could lock into the service. It was hailed as the service that would kill Twitter. However, to use most of the functionality, you had to pay a monthly subscription. It withered and died. In May of this year, the company announced that they no longer had any paid employees on the pay-roll.

Twitter and Facebook continue to thrive because they are free and all your contacts are already there. I had a hard enough job getting people to sign up for Google+ (when it launched to great fanfare). Everyone I knew would give me the same reply: Why should I join that? I already use Facebook.

This will be the biggest problem for Ello - convincing people to migrate and then getting them to buy in-site services in order to create revenue for the company. Google+ is still around but that's because they have the funds to keep it going and have now just shoe-horned it into YouTube.

What do you value most? Platforms that are free where you are the product? It seems like most people do.