2011 will see the rise of mini-social networks, but will they be worth your time?
Do your 2011 plans include building your own social network? The idea of moving past Facebook and Twitter with the idea of forging your own destiny with the dreams of ad sales and billion dollar buyouts? Who wouldn’t want to be the next Foursquare and Groupon? Maybe 2011 holds this future for you but I bet that the odds are against you in finishing, let alone succeeding, down this path. Why? Because we’ve been here before and the past tells us that it will be harder for you because, simply put, it’s already 2011 and you’re late to the party.
Everything is cyclical.
From what I have seen so far, 2011 is shaping up to be very similar to what happened in the late 90′s as far as online is concerned. There is no doubt that Social Media is here to stay and there are billions of advertising dollars pointed in that direction. But there is a truth regarding where we are in 2011, for those of us that lived through this before, and that is when there is gold to be found online, by the time you get around to grabbing your shovel most of the winning prospectors have moved on to something new. Those that follow will end up diluting the social media pool with also-rans and “it’s just like facebook but…” features.
With all of this money being thrown around, there will be a plethora of new mini-social networking sites whose sole purpose is for attracting focused or niche users. Almost like building an online forum dedicated to Violin players only. A few examples of these smaller, more-focused, mini-social networks are Instagr.am and Path (great URL btw).
What is the key relevance, your differentiators, and how are you making money?
If you’re not clear on what Instagram or Path are, they are both photo sharing tools. One is a quick and easy way to share altered photos via your iPhone (Instagram) and the other is a “personal network” where you can be yourself and share photos or 10 second videos of your life with 50 of your closest friends (Path).
Instagram is said to have around 1 million users so far. That’s impressive for a 2010 start-up with an initial $500k in seed funding. But they are probably out there now drumming up more support with their $20 million valuation in tow trying to raise more cash.
Path is a bit different, their start-up support comes from their stellar team as I expect most of their investments do too. It’s a virtual who’s who of folks that captured lightning in a bottle while doing time at Facebook or Napster hoping to catch that ride again. Hey, there’s nothing wrong with diversification and growing ideas of your own.
Where these 2 platforms fail (or will fail) is in the relevance of what they bring to the table, which in the end, is nothing new. Nothing unique. And beyond that, how do you make money with it? Path will probably argue that by limiting your network to your closest 50 friends or family is a plus, I would say it’s just dumb. Beyond that, the site & app are geared mostly to those with an iPhone (I’m sure an android version is in the works though) and let’s just start with that. Both Instagram and Path were founded in San Francisco and…
Developing in San Francisco is not your audience!
I have many clients in SF, it’s an amazing technology driven city. The people are wonderful, there’s a ton of great jobs and the work force is diverse and well educated. There’s no place like it in the US with maybe NYC coming close. But is has been my experience that developers who live in big cities plan and develop for people who ALSO live in big cities because that’s what they know. Developers who come from smaller locales tend to do a better job with startups. And then after they hit a monetary plateau, they move to SF where the developer support lives 
Beyond that, let’s be honest – how many iPhone users know 49 other people with iPhones or Android phones or smart phones in general? If you do, you most likely live in or near a big city like SF. How about those who live in the midwest, the south or in rural towns beyond the suburbs. How do your personal networks reach those groups? Unless you are bringing a new and different value to the table then all I can say is “enjoy the ride while you can because this bubble’s gonna crash on you real soon”.
In the end, I’m sure there will be something good to come out of these start-ups. Mostly bad experiences and investments.
All is not lost!
Looking back at MySpace, you know, 5 years ago when they were the 800 lb gorilla. They captured and grew their social audience up until Facebook came along and pushed them off their perch. Same can be said about AOL, Netscape, Microsoft, Yahoo, and countless others. Everything is cyclical. What goes up will go down, and those that are down have opportunities to change their landscape and move back up. Facebook is riding an incredible high but they will drop down as soon as the “next” big thing(s) come along and gives them a push. It will happen.
