Posts Tagged ‘Foursquare’

Is Facebook really a natural Monopoly?

Monday, July 26th, 2010

Facebook is marching across the world – displacing more local social networks, like Bebo, as it crosses the half a  billion members watershed. At first glance this seems like a huge success for social networks, but if users are so willing to swap social networks, into which they have ploughed so much time and personal data – why do we think that they will be loyal to their new network? If they are not then what do they switch to next? I am going to argue that many of the “sticky” characteristics of Social Networks in general, and Facebook in particular are actually caused by the incredibly fast adoption rate of the technology and not by the technology itself. I’m also going to argue that competition to Facebook will come from a very different direction than people expect.

First a little geeky diversion into the science of “adoption curves” – this is the science of determining the rate of adoption of a new idea or technology. Grossly simplified the rate of adoption of a new technology (social networks) depends on the availability of the underlying technology (Internet access), the cost (free),  how many people tell you about it, and the value it brings you (finding your High School sweetheart – priceless). So Facebook has spread quickly because it is free, Internet penetration is very high in the developed world (and growing in the developing world), and the media is all abuzz about it.

While early adopters had a choice of social networks,  the late majority (which is probably where we are with social networks) really only have heard of one – Facebook, and so that is the one they have adopted. So the more news about Facebook – good or bad, the higher the rate of adoption. Bad news really does not matter because at this stage of the adoption curve there is no obvious alternative for the type of people who are now joining.

If the adoption rate were slower then people would have more time to pick and choose between the different offerings before deciding – rather like the way they selected different TV delivery systems (cable versus satellite). But the fact that they have made a shotgun decision does not mean that this is the solution they will stick with.

The risk for FB is that it will end up like attending a college reunion – the pleasure is in the re-discovery of old friends, but once you have found your old High School Sweetheart what are you going to do – particularly if they live half a continent away?

Well that depends on what sort of person you are – for those that love to communicate social media becomes another tool alongside emails, phone calls, and even written letters. For those that  are stumped for something to say when they get the collective “good-bye” card to sign then it is unlikely that they are going to invest alot of time. Unless there is an immediate reward, which is the prize that drives so much online activity on dating websites, or even job hunting on LinkedIn.

So it seems to me that the social media world is going to divide into two – task and pleasure. Pleasure social media is essentially FB today – it is all about the pleasure of online discussion with your friends and family. It involves sharing alot about your personal life – if you don’t then there is not enough grist to drive the conversation. Perhaps you are comfortable sharing this sort of information with hundreds of people – perhaps not. My guess is that as people pass through life events (marriages, new children, deaths) people will consider what information about these banner events that they really want to share. So If you are getting married and only want to invite a select group of friends – do you really want to post every detail of the marriage? And more to the point do the uninvited guests want to be constantly reminded? Perhaps more importantly do you want to share that cute picture of your kids in the bath with people that are not in your core group of friends? So either you self-censor, in which case, what is  the point? Or you slim down your circle.

For task based socializing the focus is very different. You want to have the largest possible group of people because you are relying upon that circle to help you. So two obvious tasks based social media sites are dating and job finding. Are there others? Yes, group buying sites like Groupon are actually an example of an anonymous social media site, where everyone has the same aim (getting bargains).

Another interesting category is  social media based around physical social groups – such as schools, sailing clubs, and youth soccer. Facebook has clearly aimed at these groups – the question is whether organizations see Facebook as one more communications channel, or as the core of their communications?

So can a single social media site like Facebook do all of these things? I think the answer is no – which is why dating sites are still very successful and LinkedIn is growing fast. Can  Facebook persuade physical social groups to more exclusively to their platform? In most cases no – unless Facebook provides a “white-label” solution. Why? Because most clubs require rough agreement among their members in order to function, and social media is a hot button issue.

So Facebook is going to continue to be very successful, and is clearly going to wipe-out similar sites (like Bebo) simply because it is hard to differentiate the product offerings and Facebook is the obvious choice – I simply don’t believe that the investment people have made in inputing personal data is a barrier because as I said at the beginning of the article – it has not protected MySpace or Bebo.

The next generation of social media sites are going to be around task based social activities.  After all – FourSquare is the ultimate task based site – it enables you to find your physical friends when you are out on the town. Do you want your boss to know where you are? Probably not.

So now you have three or four social networks to manage.  How are you going to do that? Probably via an application running on your cellphone or laptop. Firefox’s Identity Manager is a small step in that direction.

If I was a cellphone company – or a cellphone manufacturer – I would be running as hard as I could in this direction – after all the SIM in your cellphone is a pretty secure way of proving who you are.

Apple v  Facebook – the next great identity war.

The big apple – can it compete with San Francisco?

Friday, March 26th, 2010

The center of the social media startup world seems to be on the West Coast. Where does

So back in the era of the dot com boom New York was the center of the media orientated startup. And the Flatiron building was the icon of that era of dot com startup. Flatiron Ventures was the VC that epitomized that ethos. Alas they did not survive the crash.

I spent today in meetings in New York, so I went to see the Flatiron building – all gone, now it is supposed to become a hotel.

But Fred Wilson the co-founder of Flatiron is back as Union Square Ventures – and early backer of Twitter. He has not moved far from the Flatiron building. But where are the other New York based startups and what will they do? Both the Twitter and Facebook development conferences are next month – on following Wednesdays– in San Francisco.

What is unique about New York as opposed to San Francisco and the valley? Well that everyone walks everywhere, and when they are not walking they are taking public transport. In this respect NY is has much more in common with London, Paris, or Tokyo – where texting took off way earlier than in the States.

So is FourSquare the future of New York social media startups? They are focused on location based services. Essentially you tell them where you are, and they tell you where your friends are.  Cool app, but your friends have to be close enough to make the knowledge useful, and you have to be the sort of person that makes decisions on the spur of the moment.

Having said that the revenue model seems clear – really knowing when a real potential customer is about to walk past your door is of value to a business.