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November 20, 2003
The Forest for the Trees
Posted by Ross Mayfield
A Red Herring
article on social networking by Jonathan Thaw captures the healthy skepticism of recent capital formation. What's new about it is lots of threatened incumbents claiming its a feature they can tack on to their existing offerings. Backed up by an analyst who spends her time using Portals suggesting it should be a portlet, because the only time you would use it is when you are prowling for dates.
I'm poking fun, but its called for. Its good incumbents are paying lip service, but when an established player has to claim featuredom the threat is real. But nevermind the vcs, network effects, patents or growing like gangbusters.
The problem for incumbents is market muscle isn't organic. If a portal offers a social networking service they will have a flood of profiles with minimal connection. Like a grove of saplings with little to share except resource consumption. If an enterprise player imposes a graph from the top-down, incentive conflicts arise. Food chains are more complex than mandating the five food groups. Oh, and we can all envison the ideal user experience, but disruptions don't turn out that way.
UPDATE: An anonymous coward who hasn't been paying attention wants me to delve into the detail of the last paragraph. Its all about how the graphs grow.
If an incumbent has a base of customers and a large budget for development and promotion, it doesn't necessarily give them a sustainable competitive advantage. Challengers have grown their network beginning with a single node inviting his friends. And they tell two friends, and they tell two friends, and so on, and so on...generation by generation. By requiring people to be invited into the network you assure they are connected to the main graph and receive more immediate value. Anyway, the advantage of this organic growth is a densely connected structure throughout the life of the graph. The disadvantage is growth as measured by the number of users is hampered.
If an incumbent offers a social networking service to their existing customer base, the network begins with multiple isolated nodes that branch out. Take a browse through Tickle and you will see lots of profiles with few of them listing connections. This is akin to a searchable resume database, little in the way of social context and few opportunities to leverage the graph for services (like filtering messages by degrees of separation). You could offer mechanisms for people to meet strangers in other graphs with forums and the like, but these connections would be enabled without an intermediary friend risking their social capital to foster the relationship, resulting in less aggregate trust, decreasing the potential utility of the network. As I mentioned in my last post on merging networks, creating incentives for people to bridge networks is hard to do. Its easier if you have two graphs (e.g. via an acquisition), a little more difficult if initial generations are based on buddy lists and extremely difficult the service is made indiscriminately available -- resulting in almost as many graphs as there are nodes.
Enterprise networks face the same challenges but also have an inherent incentive conflict. If the graph is grown company by company, it means graphs contributed to help selling make you a target for selling or could be used by a competitor, which is why contribution is often made selective. This incents gaming at the company level, contribute invalid data for erstwhile competitors while using your real graph for search. Gaming can be taken into account, but the gaming game is a lot like fighting spam, both provider and users incentives grow with the value of the network alongside the complexity of tactics. Meanwhile company by company growth lessens network effects and viral growth rates will not be achieved.
The other incentive conflict is between individuals and enterprises. If an enterprise forces a salesperson to contribute their data, its something they perceive as their own asset they lease to each company the work for. If the graph is developed through hybrid contribution of enterprise and individual, providing a service for individuals as well, individuals receive less utility. Their data is being packaged as part of an enterprise sale and they cannot afford the same level of functionality as an enterprise (e.g. selective contribution of data). Without individual control over their graph or at least opt-out and with profiling of third parties without their consent raises major privacy concerns. For enterprises, the intelligence social network analysis will become a must-have and will outweigh their privacy concerns, but individuals may revolt if incentive conflicts aren't addressed.
For most readers, I believe I said all this in a single paragraph and hope the elaboration is worthwhile. Since I didn't use an illustrative metaphor for my last point on how services are competitive, I won't get into detail, have a day job to get back to. I am not a journalist, don't have an editor, but this is the beauty of the social editing process of weblogs...a conversation ensues to build understanding. Of course, its hard to have a conversation with a person that doesn't exist.
Comments (8)
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1. NA on November 20, 2003 7:48 AM writes...
Can somebody impose an editor on this guy!? The last paragraph of this post is complete pseudo-paradigmatic babble.
Market power is not organic!?
What the f*ck does that mean!?
Save your signal-to-noise ratio! Muzzle!
Permalink to Comment2. NA on November 20, 2003 8:10 AM writes...
Re: non-organic market power, let me guess how such power is bestowed:
The Lady of the Lake, her arm clad in the purest shimmering samite held aloft Excalibur from the bosom of the water, signifying by divine providence that Microsoft was to dominate the software market...
Hmmm...
OK, my bad. Plainly, you are on to something with this non-organic business...
Whoops. Fantasy over. The non-organic thesis is back to sounding ridiculous...
Permalink to Comment3. Jon Lebkowsky on November 20, 2003 11:33 AM writes...
Hmmm... a heckler in the audience, hiding behind anonymity. Meanwhile, I picked up on Ross' pointer and blogged about this at http://www.weblogsky.com/2003_11_01_blarchive.html#106933610012901090:
Red Herring has an interesting piece about social networks as software business. Some of the players are attracting venture capital, but some VCs see social networks as the making of another bubble, which, I suppose, means shiny, empty, and ready to burst at any moment.
The question seems to be whether there's a business model for social network sites, which build followings by attracting, not just individuals, but the networks of friends and colleagues they tend to bring with them. The sites offer various ways for members to find each other, interact, and potentially have productive association that extend relationships, whether in business, romance, or just friendship.
The Internet, which is a scale-free network, tends to support the formation of scale-free social networks. Using the Internet over many years, I know I've come to perceive networks everywhere more readily, evolving a world-view that focuses on links, connections, nodes, and hubs. In the Scientific American article linked above, the authors demonstrate that scale-free networks are pervasive, so the various business entities forming around social networks are finding ways to facilitate what's inherent and capture profits from the resulting numbers.
I've joined five of the social network sites, and I visit four of them fairly regularly. Though the broad premise behind each site is the same, each is a little different in its approach and functionalities. Since I'm kind of a mad networker, I know a lot of people, and each site has a different combination of people I know. There are a handful of people I communicate via Tribe.net, for instance, and I do enough business networking via Ryze to justify a gold membership.
I assume that people will use many such sites in many ways, and those of us who do communications consulting already suggest ways to leverage network affects within organizations using social as well as software affects. There's also political potential in social networks. The Howard Dean campaign has set up its own social network site, called Deanlink.
Meanwhile, come people just don't get it:
Ms. Lee (sic?) of Forrester Research says her main concern with social networking sites is their ability to retain users. ?Unless I am actively looking for a job or date, I have no reason to go there? she says. However, there?s more chance that people would return to the major portals if they had their own social networking services. ?Portals like MSN, AOL, or Yahoo are part of my daily habit,? she says.
This is like saying the only reason you'd meet people and hang out is to advance your career or your sex life. The Forrester analyst misses the part where you do social discovery and interaction for the joy of it. (Which reminds me, my colleague Honoria and I are putting together a panel for SXSW Interactive on The Aesthetics of Social Networking. (Thanks to Ross for the pointer !)
Permalink to Comment4. Ross Mayfield on November 20, 2003 12:41 PM writes...
See the revised post
Permalink to Comment5. NA on November 20, 2003 10:43 PM writes...
Two points:
1) If an entry is not self-contained, make that explicit by supplying links to previous related entries. Don't blame the reader for your poor craftsmanship (by claiming I am "not paying attention").
2) I quizzed ~10 domain-savvy, college-educated professionals on the content of your elaboration, after reading them the original paragraph.
*Nobody* made the inferences you assert should be obvious to the passably initiated.
Again, get an editor.
And try to resist getting (more) defensive. Lots of writers need editors.
That's no small part of why editors have jobs...
Permalink to Comment6. Ross Mayfield on November 20, 2003 11:57 PM writes...
Whoever you are,
You are right about #1, more context is better when you have the time. For 2, Im writing for people who are part of the conversation.
As for editors, Im all for them, used to be one myself, taught a class on journalism, worked with them for newspapers and books, used to write a collumn. Editors don't fit this modality and the closest thing to one is what you are doing right now, albeit anonymously. Perhaps you are new to weblogs, which is great, just don't impose a process here. If I had to contribute to a process I wouldn't be contributing.
Note I am not asking you to do the same you are asking of me. Notice nobody else complained or was aggressive. So rather than get into a debate about editing vs. social editing, feel free to start your own blog and do it your way.
Permalink to Comment7. NA on November 21, 2003 12:37 AM writes...
Another point, re: the BigCos efforts yielding nodes without connections:
Let's suppose MSFT decides to deploy Wallop on MSN, with the intent of 'embracing and extending' the functionality of LinkedIn. Given the existing, richly connected graph of 'MSFT tech'-specific blogs -- authored by MSFT employees and many others -- do you really believe their graph wouldn't become densely connected in very short order?
Evidence suggests it would.
Now, could Google do the same, around its API? Amazon? IBM, around Linux...
So you need to qualify your assessment of BigCos prospects: BigCos around whose offerings a community of practice (CoP) has taken shape are a good bet to evolve a richly connected graph...
Put differently, you are focusing on the wrong incumbents. Forget portals, which have never been about matching users, or facilitating persistent ties. Focus on existing CoPs, and affinity groups (college alumni networks, etc.) ...
Some more evidence in support of this hypothesis: the non-person nodes (UCLA, US Army, etc.) that are so popular on Friendster...
Thoughts?
Permalink to Comment8. Ross Mayfield on November 21, 2003 1:35 AM writes...
Ah, now you are talking.
Yes. Its the same pattern as what I did with the Blog Tribe on Ryze. In Merging Networks and Global Tribes that was one of my points.
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