Social Network Enablers

A couple months ago I had a fun conversation with Chris Fralic of First Round Capital, a great guy who is also a smart and thoughtful Web 2.0 investor (hmm, is that an oxymoron?) on the growing wave of  “social networking enablers.” He and I have both seen a number of companies in the sector and are trying to figure out where this space ends up.

My initial gut has been that some of these companies will grow pretty quickly and be succesful ventures for the entrepreneurs, as long as they don’t raise too much capital and price themselves out of the typical Web 2.0 exit ranges. But I am not convinced there is a great venture return here, at least not yet convinced.  So far I have felt that there is much more value in the consumer facing social networks that scale than in generic B2B2C enablers.

But I am still noodling on this.

In particular, I am wondering if there aren’t opportunities around some particular targetted communities which are naturally prone to social networking and are large enough to sustain a particular social network enabler focused on this vertical.  If an enabler is able to become the de facto standard social networking platform by partnering with the major aggregators for a large community, like games, music or sports, for example, it seems to me there could be a large opportunity valuable enough to generate “venture returns.”  The key is that the enablers value would hinge more on the community they have on the platform, rather than on their technology, and so is less prone to commoditization and/or displacement.

I’m working on one of these right now. Stay tuned.

Cisco/Tribe, Ning, Reuters: Social Nets Everywhere!

It’s now official: social networks have surpassed online video and widgets as the latest craze (though video and widgets are still getting plenty of play, too).

From an investment point of view, I think I hit the timing on video pretty well (video started as an area of focus about 24 months ago, and now is waning since everyone and his brother is launching and/or funding a video startup), but truthfully it is less clear to me whether I am still early, or too late, for social networks and widgets…

Just in the last few days there’s been lots of social networking news.

Marc Andreesen’s startup Ning went live.  I think it is looking pretty slick.

In what can only be called a bizarre move, Cisco bought Tribe. Hunh?

Reuters is creating a social net for fund managers, traders and analysts.

The Sunday Times had a really good piece on social networks generally. Fred Wilson also has a good post up this morning on the same subject.

The most interesting nugget amongst all of the noise is the growing recognition that smaller social networks, formed around tighter communities of specific shared interests, are where the long term utility of social networks is likely to be found.

This is a thesis I’ve been noodling on, and discussing, alot lately, and figured large in the social networks discussion at the Polaris Digital Media Summit in January.

Getting theoretical for a minute, this is an interesting twist on Metcalfe’s Law.  (How often do you get to work with a partner who has a Law to his name??) Whereas Metcalfe originally postulated that the value of a communications network increased as the number of people connected to the network increased, it seems that in many instances the value of a social network actually decreases when it gets too big.  Or, at least, there needs to be some coefficient for the affinity between members added to the equation. Bob and I have  been riffing on this around the shop, and he had a fun post on the subject last summer.

To sum it up: social media, and social networking generally, is transitioning from bleeding edge/experimenation to cutting edge early adoption.  Though still in its early days, the opportunities are very real — and substantial.

Online Games/Virtual Worlds as “Third Place”

An idea that my partner Steve Arnold and I have been brewing for a while is the emerging opportunity for “virtual worlds.”

What the heck is a virtual world? Think MySpace meets World of Warcraft (or, in other words, a mix between a social network and a massively multiplayer online game, or MMOG).

The meteoric rise of social networks shows that a heck of a lot of people out there like to connect and commune online. And the MMOG phenomenon shows that there are some significant audiences out there who are willing to spend a ton of time immersed in online roleplaying games.

Where this seems to us to be pointing is the emergence of “virtual worlds” which on the one hand have the 3D representations of MMOGS,  but need not be “games” as typically conceived (ie, “men in tights” role playing/quest based games).  Rather they are online communities where people can interact in a much more graphically represented, real-world like environment than the static profiles of the current social networks.

A good example of this is Second Life.

“Tasty Research” has a good post on this, suggesting that MMOGs are, in effect, a “Third Place,” described as “somewhere besides home or work where people can socialize and feel comfortable.”

Required Reading: Jarvis on Metcalfe & Web 2.0

Jeff Jarvis has a great response to the discussion of Metcalfe’s Law & Web 2.0.

You absolutely should read it if you have any interest in all this stuff.

Guest Blogger Bob Metcalfe: Metcalfe’s Law Recurses Down the Long Tail of Social Networks

The blogosphere has started bubbling some interesting discussion of how Metcalfe’s Law applies to current Web 2.0 dynamics like social networking. Some IEEE types, Brad Feld, Niel Robertson, a PhD. student named Fred Stutzman, my partner Sim Simeonov, myself and a few others have posted on this in the last few weeks.

Bob Metcalfe, who invented the law in the first place and is my partner at Polaris (and who, along with Al Gore, invented the Internet…), offers his own view in a guest blog post below.

“The Politics of MySpace,” Blog as an Art Form

I was just playing around with the newly released “Tagsurfing” feature on WordPress.com.

I like it quite a bit. I think it will be most useful once I go through and pare down the particular tags I want to see “surfed.”

The jewel for me, though, was finding a beautifully done post, integrating some really thoughtful questions regarding the MySpace generation with a really tastefully selected collage of photos.

“Chartreuse” has elevated Web 2.0 blogging to a new level, virtually an art form. I strongly recommend you check it out!

MySpace=AOL, Blogs=Endgame

Fred Wilson offers an interesting and provocative post on blogs as the ultimate start page:

Blogs are the endgame for social networking. MySpace is the AOL of blogging. It’s where you go when you don’t know how to do it yourself. But with MySpace starting to rein in what people can do with their pages (for a host of good and bad reasons), they are seeding their own decline. A decline that will take a decade if AOL is a good proxy. In the next ten years, most people who want an online home will have a blog, it will be their online identity and their start page and much more.

I haven’t done it yet, but I should change my start page to my blog. That’s where I go to start my day and end my day. And I am hell bent to configure my blog with enough functionality that it can be my newspaper, my inbox, my tv, my radio, and my social network. It’s pretty damn close already.

That’s where all of this is going. We’ll program our online world and others will too. And we’ll start our day there instead of the Wall Street Journal or the New York Times. My best is many of you reading this are already there.

Good Reading on Social Networks: “The Network Unbound”

Courtesy of Fast Company.  Read the article here.

MySpace and Social Network Advertising

MediaPost has an interesting interview with MySpace's senior ad sales exec on how they are seeking to sell advertising. It is a quick, worthwhile read.