They are failing because they can't even ask people to pay for their service. They skipped that and went directly to we are shutting down our servers in 90 days.
DHH needs to give them some scream therapy about business models. The one he does about asking your customers to pay for your service.
I am now going to repeat what you said, but with more feeling:
We also considered refocusing Xmarks as a freemium sync business, but the prospects there are grim too: with the emergence of competent sync features built in to Mozilla Firefox and Google Chrome, it’s hard to see users paying for a service that they can now get for free.
Ask me! Ask me! Why don't you ask me ?!!!
Native firefox syncing isn't going to help me sync my Firefox bookmarks to my iPhone, is it? Maybe that is worth something to me, ya know?
Isn't it completely ironic, that on top of HN right now is PG's Y-combinator screed, with how important it is to launch as soon as possible with as little functionality as you can in order to let users guide you to what they really want? So users are okay for telling you what features they want but they are not okay for telling you whether they want to pay ??
I mean okay, maybe I am a complete aberration in being willing to pay a few bucks for xmarks. But they didn't even ask. Maybe there would have been enough other aberrations out there to keep it going as a low-key low-turnover service.
This is the thing that bothers me with the start-up world - it seems so bi-modal: make it big or go bust. What about a quiet, modest little service that can pay for itself and maybe a bit extra?
DHH needs to give them some scream therapy about business models. The one he does about asking your customers to pay for your service.