As co-founders of a startup, it’s a bad sign when you have to lay off your entire staff and quit taking a salary. But Dalton Caldwell and Bryan Berg, the two responsible for App.net, aren’t totally bummed out about their reality as recently explained in a company blog post on the matter.

If you aren’t familiar, App.net is an ad-free social network that launched in August 2012 after raising around $800,000 via crowd funding. As CNET points out, the service borrows heavily from Twitter in terms of function and layout but asks members to pay a fee to avoid being subjected to advertisers.

Caldwell points out that the future of the company hinged on the subscription renewal rate, data that just came down the pipeline a few weeks ago. The good news is that they made enough to be profitable and self-sustaining. As such, the service will continue to operate normally on an indefinite basis.

The bad news, as mentioned above, is that the renewal rate wasn’t high enough to maintain a full-time staff. The co-founders will continue to run the service but won’t take a salary and they also made the decision to wind down their developer incentive program. Instead, the duo will rely on contractors when new development projects arise.

Either way you spin it, losing your entire staff is not a good sign. Hopefully the team will be able to keep the project alive and once again find themselves in a position to hire a full time staff.