Social Network Effects: “If You Build It, Will They Come Back?”
Via an SAI pull-out, Sean Parker of the Founders Fund (and former Facebook prexy) puts together a strong argument [video after the jump] at last year’s Web 2.0 conference on how network effects – i.e., empowering users to share content/data/relationships – matters more than the corporate governing or collecting of user data and activity, better known as CRM.
There’s CRM which is “customer relationship management,” but as Parker argues, today it’s more about “customer social engagement” (new acronym alert … CSE), empowering network effects that leads to more growth across market share and eventual monetization.
Borrowing loosely from Field of Dream‘s much reworked quote: “If you build it, they will come…”, it’s much more relevant these days to think of “building to get users to come back again and again (and again) with more intent” and with those returns, bring more consumers/relationships to bare against digital properties.
Look at how early Facebook or Twitter adopters dragged their ‘kicking and screaming’ friends, colleagues and relatives into the social family.
Becoming an avid Amazon Prime, Woot! user or similar is great for these companies, but how you share those discoveries with others is how companies take off.
“Liking” individual content items or products on Facebook is akin to being real-life discovery engines, and as we’ve mentioned in the past, people want to program their lives online. Typically, this programming was served up by corporations, and it’s now gone the path of letting independent POVs via social network threads and niche online personalities or tastemakers guide discussions and discoveries from Facebook to ThisNext to TechCrunch.
With Google reworking its models to capture more social engagement, Apple launching Ping to monetize their brand loyalists and Facebook’s social economies, e.g., Zygna, becoming real businesses, it’s becoming more important to understand how network effects are required to scale or transcend the online noise.
