Continuing on from widgets in our Big or Bullshit series, Brad and I decided that we wanted to cover vertical social networks next. First we need a little definition. I define vertical social networks as those that target a very specific set of users, rather than mass audience. The litmus test is that the users are connecting about something, and that something is not so broad that it would appeal to most of a particular demographic. Some great Colorado examples are YourRunning (running enthusiasts), YourCycling (cycling enthusiasts), and Thoos (running enthusiasts). Other examples include Dogster (dog lovers), LibraryThing (book lovers), Boompa (auto enthusiasts), etc. I would not consider sites like LinkedIn (business), Last.FM (music), or even Colorado’s own Godspace (religion) to be vertical in nature – they’re targeting very broad audiences that could almost be considered generic.
Success in social networking so far has been driven by advertising (and acquisitions) and the classic “go horizontal, get lots of eyeballs” approach. The business motivations of moving away from general user bases to highly focused ones that the vertical networks target are seemingly obvious. In advertising, the promised land is knowing exactly who you’re talking to and what they care about, not just talking to the masses. While this seems to apply to vertical social networks on the surface, I believe that this thinking is somewhat flawed. Bear with me.
I’m pretty sure that vertical social networks will continue to proliferate. Users like them, and there are advertising, sponsorship, and affiliate dollars to be had. I just don’t think many niche social networks will have enormous exits – but I think many will be sustainable. So I think the future is one in which many people won’t belong to one or two social sites, they’ll belong to more based upon their various passions (mine might be tennis, early stage technology investing, Ruby on Rails, books, building companies, space exploration, travel, and so on).
So what happens when there are just too many social sites for a regular guy deal with? Perhaps we’ll see the emergence of social aggregators and the centralization of identity and trust (these last things need to happen anyway). You see some examples already. Sites like Profilactic, SocialURL and soon, we hear, the much anticipated product from Jared Polis’s new company Confluence Commons are trying to help by aggregating existing social content. But as these social networks proliferate, one thing that would be incredibly helpful would be a “write once, use many” centralized user profile. I would love to see OpenID go in this direction (or someone leveraging OpenID) by allowing users to create their base profile in one place rather than having to constantly enter it into every network they want to check out. Tools like these will abound, and the key is that these tools should be in a unique position to truly understand each users preferences, affinities, and social webs. This may even be the way that the attention economy initially develops: rather than getting users to volunteer their click-streams, it’s far easier to simply study what they’re already telling you.
I don’t believe that MySpace, Bebo, and FaceBook have yet fully harnessed the profile information freely offered by their users for laser targeted advertising, but they will. If you believe that, just imagine for a second what the aggregators can do! Of course, they’ll need the users, but I believe that there are enough benefits to users in this scenario that they’ll flock to the aggregators.
When I think about what’s likely to happen, I think that the vertical social networks will proliferate and become a useful part of the web. But in terms of their potential as an investment – I guess I’ll have to call Bullshit. Look to the aggregators and the toolsets that emerge around identity – I think that will be Big.
We’ll know what Brad thinks soon. But pick a limb and come hang out with me. What do you think about vertical social networks?
Thanks for mentioning Profilactic. Interestingly, we started out with the idea of creating a centralized web profile that would keep your other profiles up to date.
After we started exploring it, we realized that was a service that people wouldn’t visit that often.
Content, on the other hand, was a much more attractive angle. We figured if we have all of your (and your friends’) web content in one place, you’d be more likely to visit every day.
We still may add the central profile idea as a complementary feature down the road; however, it didn’t seem like a standalone service to us.
Again, thanks for the mention. We appreciate it.
Great topic. I think there are tons of great examples that don’t necessarily fall in to the new “social network” definition. Think of things like message forums with a vertical focus. Some examples: http://www.avsforum.com/avs-vb/ http://bikeforums.net/ and even http://episteme.arstechnica.com/
They’re old school in that they’re forums, but aren’t they some of the longest running social networks around?
Vertical social networking is already big. It just makes sense… it means quality, relevant information.
First off – thanks for the mention of SocialURL, we concur with you that people are flocking to our network and although it is just scratching the surface of our potential opportunity the young and old demographic that have multiple vertical interests and like having a central place to manage profiles definately find value in what we’re doing.
From a business standpoint it is “Big” if you can pull off a big vertical brand social network, but it is “BIGGER” if you can do it with 100 to 300 of them!!! This is why a lot of ad networks are starting to get into this space including CPA Empire and BlueLithium.
Hi David & Brad,
Great topic!
I’m biased, but my answer is “BIG.” 😉
Your discussion makes me think of a couple topics in no particular order.
There are hundreds of passion-centric online communities that could easily make $20M in revenue within 24 months. There are some that are already. Some that make the lion’s share of their revenue from subscriptions and direct user spending. Check out deviantart.com. Advertising and sponsorship are not the only revenue streams. In fact I think it’s may be a bad sign if a passion-centric community isn’t making a portion of their revenue from membership spending.
Since you mention a car site, don’t miss cardomain.com and streetfire.net. Both are quite big.
I agree with you about the benefit for advertisers to be able to speak directly to influencers and authorities in a immersive, highly fluid environment, though I believe what’s not quite perfect about that is many advertisers are still in mind-set of getting in front of as many eyeballs for the cheapest price. While many advertising agencies understand the difference, many advertisers are still learning about this shift in spending.
Finally, I want to share that I know this is a start-up oriented blog, but many of the best passion-centric communities to date have been built without institutional funding, and many more are made each month with limited or no outside investment. Thus the need for enormous exits doesn’t apply the way it does to traditional software companies. These businesses can easily be self-sustaining which means there is a much wider set of execution and exit options available. Though I think you are writing this blog for the investor, not the entrepreneur, and I too would caution the investor, there are only going to be so many enormous exits.
I do completely agree there will be deep co-mingling of different accounts. I expect within 24 months, that dogster and catster will be used as much via on aggregate services and mini-site widgets, as it will be directly. To what degree will be very interesting. You can’t extract all the passion, yet it would be much easier to participate in communities you are partially passionate about if you didn’t have to go to that site to participate.
Ted – good stuff. Yes, my big or BS vote has to come from an investors standpoint. I agree these things will be everywhere and sustainable as I said in the post. I also agree that you can build one of these vertical social networks without huge funding as they’re becoming a commodity from a technology standpoint. hell, you can buy them on ebay and go from there. 😉
Then to investors I’d say watch out, there is a lot of BS out there. 😉
They key is to look for an existent thriving community with existing advertisers and user spending. Anyone can make, buy, rent, co-opt or promise to make community features and tools – they are definitely just a commodity now – but nurturing, growing and managing a thriving community is still the real trick and where *all* the company value comes from. Look for those facets to best assure a happy exit.
Thanks for the mention of Confluence Commons and our forthcoming product.
We believe that unification/simplification is becoming more important to even the “average” user of Internet communication services. The diversity of communication services and brands has become overwhelming to most folks, and the trend continues. Of course, our product vision is around solving that pain point.
Stay tuned, more is coming from us soon.
Hey, this is the founder of LibraryThing. I wrote up a reply, here:
http://www.librarything.com/thingology/2007/05/will-vertical-social-networks-succeed.php
I think some people have way too much time on their hands. 🙂
What real world problem are we solving here?
Then again, I don’t have a social life. My entertainment is reading your and Brad’s blog, and of course watching Wallstrip.
Agree with most of the stuff thats said in here. One more addition — As this happens, I think the ability for social networks to easily digest content from over the web, and provide distribution/syndication widgets to sites all over the web will become critical. And this could be a key differentiator — how does a social network integrate with www? Today, some social networks have their own blogs, or provide rss readers to individual users, but I haven’t seen something that does a good job of integrating the web content well into the network. Similarly, I haven’t seen something compelling that lets you export out whatever is happening inside the network to rest of www.
i think vertical sites (given that i understand your use of vertical vs. horizontal) are faddish (for the most part). shelfari is fun for a day or two. but once i’ve filled out my shelf, what’s left to do? if i want to discuss books, i’m not going to do it there with a bunch of strangers. i’m going to do it on multiply where i’ve gotten to know much more about people than just what sorts of books they like. the peripheral knowledge about people adds a depth to a book discussion that you simply wouldnÂ’t get in an “all about books” site.
i very much like the fact that i can do pretty much everything in one place on multiply — video, music, blogging, reviews, photos, and calendar — as well as go for that more vertical feel if i want to in the groups. and i don’t have to cobble it all together through a site like socialURL because it’s already seamlessly integrated.