When you're competing against social networks that compete for people's limited time, yes. I'm not going to update my Twitter, my App.net, my Facebook, my Path, my Google Plus, my Tumblr, my this or my that.. It isn't if it App.net is good or not, it's about convincing people to add yet another "obligation" to their social media life. There is incredible inertia with Twitter. People aren't leaving it -- they continue to grow and, as people add more and more followers, they'll be less likely to just ditch it for something else, even if John Gruber says it's "cool."
Sure, but that's not what I was asking. Compared to these competitors, app.net has a business model that relies less on a huge customer base to show ads to. Could a smaller user base not suffice when you charge users upfront? Can it be successful without unseating Twitter? Can it have a different sort of success (e.g. a healthy margin and a good user experience for nerds instead of hashtags at the bottom of every TV show?)