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To take your party analogy, the two people are important but that is because the average quality of the audience (or relevance to me) is the most important.
As n gets larger it gets more inevitable that quality will approach the overall population average (that is, unacceptable to me).
And then the spiral starts as people's level of quality acceptance gets hit as the people leave.
So Facebook did well by creating a finite space that doesn't let just anyone participate in your neck of the woods.
The best essay I read about the destruction of communities as they get too big was by Clay Shirky: http://shirky.com/writings/community_scale.html
So basically, I don't think the relationship plays out here as there is a tragedy of the commons in any community.
Great post!
I always liken web startups to a leaky bucket with a hose pouring water into it.
You can focus on increasing the flow (making the "hose" work better) or you can focus on plugging the holes.
Increasing the flow (with new opportunities in viral marketing and old standbys like SEO) is comparatively easy and feels really good.
Plugging holes is hard and only incrementally rewarding.
If you look at great businesses that you envy, I think you'll find most of them focus more on plugging holes... Adding value for users (first and foremost), providing outstanding support, and optimizing the sales funnel.
Naturally, you don't want to see users leaving your site but the question remains -- what do they leave behind (and for how long)? Everyone could ditch their Facebook accounts today but the data Facebook possesses still has value.
As the previous poster Niki noted, the "relevance" of the information is a huge factor in determining the value of data since some sites have more active and engaged users than others...
Good article.
@Work Post: I'm not so sure the data Facebook possesses has meaningful value if it stops flowing in. Perhaps for a little while but it will decay rapidly.
I think there are great examples of authoritative sites where if people come, contribute and leave then they have still created value during their stay that lives on after they depart. Think wikipedia.
Andrew,
Good post. I addressed this topic on a post I wrote for Centernetworks.com about a Twitter monetization plan.
In short, I pointed out, as you do, user retention is critical. Once people start leaving, the service (Twitter, FB, MySpace, etc.) becomes less useful; this makes even more users leave.
I like your party analogy, once the cool people leave, everyone knows it's almost over!
Greg
beYOU.tv
It's interesting that in the early days in the life of social network there seems to be a huge land grab. Many rely on flashy graphics and a couple of A-List blogger mentions and any guys with an social application can see short term success.
However, as with any product you got to provide value for them to stay. This basic concept seems to be missed by so many new social networks.
I suspect for the social networking start-up the key is to gain users while Metcalf's driving the bus and close the funding before Eflactem drives it over the cliff.
I agree to a point. The point where I start to balk is the implication that once people start leaving there's nothing the 'hosts' of the party can do to turn things around again. This isn't necessarily true. Break out the top-shelf booze, as it were. Step up your game, do something drastic. Going back to the web reality of this conversation, obviously you add V, if you can think of a way to do so. I think facebook is hoping that they can leverage their developer network to increase V and that the introduction of efforts to monetize won't reduce V so drastically that 'death spiral' occurs.
Important topic, good points.
Jakob Nielsen said exactly the same thing nine years ago, in an article called "Metcalfe's Law in Reverse".
http://www.useit.com/alertbox/990725.html
Welcome to the challenge of starting a band in a garage. It's called 'butts in seats'.
Business isn't that hard. Marketing is.
In fact, either retention-based or acquisition-based strategies can work well for long-term business survival. Churches have concentrated on retention, universities on acquisition. Indeed, universities are actively hostile to retention -- they actively get rid of 99.9% of their customers after just a few years! (Though they do take steps to get them back again later when they hopefully have more money.)
Andrew - How do you think Ning's "double viral loop" ("every network creator is a user and any user can become a network creator" - Fast Company) impacts Metcalfe's law?
Niche social networks are the future. BUT they have to offer more than the one trick pony giants out there. Revenue: Advertising and Value: offer more than just connecting with people. Most niche social networks are missing the point too, advertising and keeping you connected is so web 2.0. /yawn
I have cracked the code. Hope to see you at TC50.
Sounds like people are talking about the end of Facebook without coming out and saying it. Is a tipping point near?
For me it came when I realized that Twitter is just much more fun than Facebook. We all have a compulsion to check email, but Twitter is much more addictive because each day might bring that special Tweet that changes your life.
Facebook doesn't have that. Facebook is boring like a corporate Outlook inbox, except instead of HR memos I have to read about what high school friend I haven't seen in years is now friends with another high school friend I didn't even like in the first place.
Cute graph but a work of fiction.
Social networks fracture when they reach a certain size unless you build in schism points - a way to swarm down into smaller groups. This is a well known phenomenon and has a variety of names: in the opensource community it is called "forking" - creating additional prongs as competitor communities.
Secondly there is an implication that the larger SNs will always win out over smaller SNs. Not true. Hitwise shows that the top 40 sites for stickability (not volume/broadcast, but niche/addictive) are not well known - Facebook is 40th and I only knew 2 others in the top 40 (Habbo Australia and Gaydar). (I've been a community strategist for around 20 years so I should know the others). It is a mistake to think that the SNs we all talk about (MySpace, Twitter, Facebook) are the SNs where we live/are loyal. Thinking broadcast will kill off many a community app or even a community. Start to think targeted and engaged - we stay loyal to smaller niche communities, and tend to find the larger ones non-nutritious.
Incidentally, advertising has been shown time and again as the LEAST ROI on community investment...
Good golly heck, we echo your thoughts entirely, Andrew.
As more and more niche social networks hop on the proverbial band wagon, they'll each have the same challenges of making their sites 'sticky'and continuing to offer huge, tangible value to their ever-fickle members.
On that note, we've been talking with Chris Brogan about having a "Niche Social Networks Summit" at his Podcamp 3 event in Boston this July. Maverick community leaders should attend and can get on the list by emailing me at
Richard@BlackWidowNetwork.com
Let's try and stay ahead of the curve....
Richard Dale-Mesaros :)
Chief Deal Weaver
SilkCharm, you make a good point.
I can't remember exactly from, but I recall reading about a community (something like the Amish) will split into two communities once they reach a certain mass because the human mind is unable to form more than around that number of relationships.
So there will be a limit to the size of a useful social network.
Interesting. The talk about forking, about Ning, and about the Amish (!) are all related to Reed's Law, don't you think? The value of the network doesn't just rely on the number of nodes - it relies on the fact that in networks GROUPS CAN FORM. So there's a lot more time on your horizontal axis than most people thing. Doesn't guarantee that Facebook (as one example) will crash and burn, but it suggests it may take longer than we all thought. At some point, you have to account for functionality too. For example, yes - Facebook allows you to form groups. But the effectiveness of those groups at DOING SOMETHING is almost non-existent. This, to me, is the harbinger of doom for Facebook...