The desire to network is as old as humanity and online social networking sites do seem to solve a need that is different from simply using email, chat and blogging tools separately. However the idea that there will be one big social network platform is the purest form of baloney. The Internet is the platform. Period, end of story. The Facebook social graph platform pitch looks like a classic end of hype cycle attempt to inflate valuation, but as they say, that's another story!

It is an interesting exercise to attempt to theorize how online social networking is likely to evolve once we get past the hype cycle. The best way to start is by looking at the different types of human networks and the motivations that drive them. I see two distinct types of motivation. One is, "I want to communicate better with the people that I already know and trust". The other is, "I want to increase my visibility so that I can connect with more people".

This also fits in with classic consumer marketing theory around lifestage/lifestyle patterns (which simply says that you sell different things in different ways to students, new parents, retirees and so on). The danger in a lot of the current talk about Facebook is that it is all written by and about two consumer types - students and web 2.0 entrepreneurs, who seem to have forgotten that there are other people out there!

Open Networks vs. Gated Communities

Students and web 2.0 entrepreneurs are much more motivated by increasing visibility; they need visibility to get dates and deals. When you are young, you leave the family and want to make friends and form new relationships. When you start working you need to get the trust and attention of the people who already have what you want (fame, fortune, etc.).

In other networks, trust is more critical and these will therefore be more like "gated communities." Recently TechCrunch panned and ridiculed a gated community for models (geeks and models don't mix well?). However, I completely get why models might want a gated community and don't want other people lurking around. Is that a huge media play? No, but it does fulfill a basic need and it could be a viable niche business. This is classic "specialty enthusiast publishing" and that is a multi-billion dollar market.

The most obvious gated community/trust based network is the family ("the network you don't get to choose"). Many people want better tools to stay in touch with extended family now that families tend to be so geographically dispersed. I recently discovered a wonderful blog post from a niece about her travels in India; and I discovered that she and I had been there at the same time and did not know it. But families don't want the whole world looking in while they communicate. I don't see a business here -- families will hack together what they need from existing tools; email and phone work pretty well, for example, even without blogs.

If a gated community for models seems small and frivolous, what about one for doctors? Doctors are the primary gateway to healthcare spending which is now about 25% of GDP in America, so this is not a little niche. Trust is critical in this case. Doctors need to be confident that they are able to communicate with each other without the pharma or the insurance industries eavesdropping.

Gated communities can have negative connotations - rich people hiding away from the rest of the world, bigotry, snobbery, even networks of people with malicious intent - but that is just the world we live in with good guys and bad guys.

Trust vs. Openness

Viewed from this perspective, companies are just one more example of a gated community. The Internet dramatically reduces transaction friction, making it easier for networks crossing organization boundaries. We can now see that the 1950’s era "organization man" command and control companies were a transitory phenomenon based on post-War mass production. Companies are now far more "porous" (open to the external world) at every level and so in our work life we may be part of many networks - not just the network defined by the organization chart.

However, the trust issue for companies remains very real. You cannot simply allow everybody to see everything. The rollout of web 2.0 tools within the enterprise will be all about the push and the pull of these two forces. Technically this is all about security, rights and permissions control; which has been around in different ways for a long time. So this looks less like a technology opportunity than an implementation, consulting, professional services type of opportunity.

A lot of the debate about Facebook vs. MySpace or any other social network is just a question of choice. It's a question of "where do you want to hang out?" That's why the students in Facebook will move on if Mom & Dad join. This is simply an update to the old prviate club, which may mean that we see more club type rules emerging online. The two principle rules are a) a new member has to be proposed by an existing member and b) through some form of voting arrangement a member can be "blackballed" (thrown out of the club). These type of exclusivity rules help ensure trust through member/peer pressure.

Looking Ahead

Looking at all these types of social networks, I see 4 questions that will drive the evolution of net-based social networks:

  1. When will the novelty of the medium recede and let the basic motivations come to the forefront? These issues go way, way back. The Freemasons secret handshake was an early solution to the trust issue. When I looked at the social networks that have existed in the real world throughout history and asked "what is different this time?" the answer was "it’s the medium, stupid." (Marshall McLuhan was a clever guy). The evolution of consumer behavior on the Internet has tended to go from "wow I can do that, way cool" to "so what, what does that do for me?"
  2. At what point do visibility and trust collide? I think this is the critical question determining the business value of social networks. There is an implicit assumption that Metcalfe’s Law applies. However if trust erodes, what’s the point of a network? The social network is valuable because it is exclusionary; MySpace is cooler/more valuable because older folks are not there, and that implies some optimal network size. However if this is true, it is a reverse network effect and that will have a crushing effect on social network valuations (but it may do wonders for social network enablers like Ning). So count me a skeptic on the Facebook "social graph" theory; it is a great pitch but I don’t buy it.
  3. How can we be members of multiple networks? Most of us need to be members of multiple networks and these change as we get older (school to college to work to parenthood, etc.). Something like OpenID is part of the answer, but also tools to transfer our digital stuff between networks and decide what stuff goes in what network. This is where Alex's recent article describes the issues very well.
  4. How do we preserve the "strength of weak ties?" A network that is only strong ties (everybody knows everybody very well) is not valuable on its own. Genetically that can lead to birth defects, in companies it leads to stagnation, in social circles it can lead to snobbery/prejudice. The outsider with a new perspective is valuable. This is why blogging comments are so effective and some of the innovation around rating comments is interesting; it is porous rather than exclusionary, but the new tools may filter out the noise.

What do you think the future holds for social networking? Care to take a stab at the questions presented above? Care to pose any more? Leave your thoughts in the comments.