Emergent Business Networks

Social Networks do seem to be the next evolution of the web as a communication medium, fulfilling a need as basic as email. The desire to network is as old as humanity. I have been thinking about the taxonomy of human networks from the perspective of basic motivation and how this might impact the evolution of Net-based Social Networks.

Looking at the the networks, I see two basic forms of motivation – Trust (I trust you because you are in my Network) and Visibility (I can make connections and enhance my status by being visible and seeing/contacting people who are important to me). Some Networks are more focused on Trust, others more on Visibility.

I believe we are still in the early days of the evolution of Net-based Social Networking and that we will say many different forms to meet many different needs – that. My basic taxonomy has:

• Exclusive professional. The oldest form would be Freemasons and other Medieval Guilds, where you could only belong if you met certain professional accreditation standards. The secret Freemason hand-shake was an ancient form of spam control. The American Medical Association (AMA) is a modern example. You can only join the AMA if you can prove that you are a Doctor. This exclusivity has value based on Trust. A Doctor is more likely to talk honestly to another Doctor about an important issue if they believe that their “conversation” is not being overhead by the general public or, more importantly, by people who run Pharmaceutical or Health Insurance companies. These are “gated communities” for a reason.
• Non-Exclusive Professional. This network is defined by a market, technology or other subject of interest. This could cover what I have heard described as “The Tech Crunch 5000″ (the 5,000 people who matter in Web 2.0). The more traditional version of this is covered by the 34 million subscribers to 1,200 trade magazines in America. The exclusivity/status is not binary it is a range. My position in the network is defined, formally or informally, by other people in the network. So in this network, Visibility is more important than Trust (which is still mostly created offline). Web 2.0 as a social network is different because it is so new and future-oriented, even established players are new and the rules are very fluid. So we should not make too many assumptions about the mainstream networks based on the the one that we work in today.
• Family and Tribe. Family is the network that you don’t choose. In less developed parts of world it is loyalty to family first and then tribe. This network is more similar to Exclusive Professional as it is all about Trust and very little about Visibility.
• Old-School Tie and Alumni. These are Exclusive Networks based on Trust.
• Social snobbery. Another Exclusive Network but thankfully fairly porous as you can break in by making money, changing your accent, joining the right Charity and otherwise “fitting in”. As snobbery embarrasses people we are unlikely to see a “snobs network”
• Company. One impact of the Net is to reduce transaction friction, making it easier for networks crossing organization boundaries. From the viewpoint of history, the 1950’s era “organization man” and the companies they worked for are unusual and we can now see them as a transitory phenomenon. 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. A few command and control type organizations may try to resist this but it is pushing against the tide. A healthy Company has many networks that are open to clients, partners and other stakeholders and they are based on both Trust and Visibility.
• Franchisees, trading networks and other inter-company networks of mutual interest. Unfortunately we can also add Terrorist Networks to this list.
• Ad Hoc Interest. As we browse we join and leave networks of interest regularly. As we get more committed we stop “lurking” and register or identify ourselves in some other way. As content is increasingly user generated we are getting our information from social networks (is Wikipedai a social network?)
• Political parties. I have never been a political animal, so no comment.
• School friendships. School is when friendships become so important. This is when cliques form and cliques are not much fun except for the clique leaders. I suspect that one key motivation for Web-based social Networks is to expand beyond these cliques and that means expanding beyond the physical boundaries of the neighborhood. As a parent I believe that the Trust issue is critical and the issues with this and MySpace have been well addressed elsewhere. I think these Social Networks have to evolve a lot further before they meet the delicate balance of needs that exist between children and the adults (parents, teachers) who take care of them.
• College Friends. College is a formative experience because for most people it is the first time they are exposed beyond the very narrow boundaries of family, neighborhood and school. Suddenly Trust becomes critical as your choice of friends is much broader. I think this may explain the difference between MySpace and Facebook (but not being a member of either, please take that with a pinch of salt).
• Clubs. It is possible that old-fashioned Club rules will become more prevalent in Net-based Social Networks. 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 rules help ensure Trust through member/peer pressure.

Maybe you think I am stretching a point to see all of these as a social network? In 2002 I worked in a start-up that applied network theory to analyze all kinds of networks including human networks and I came away from that with the habit of looking at everything as a network.

Looking at all these types of social network (I am sure there are many more, these are just the ones that occurred to me while writing), 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 fore? When I looked at all 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”. (Clever guy that Marshall McLuhan). The evolution of consumer behavior on the Net 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 does Visibility and Trust collide? I think this is the critical question determining the business value of Social Networks. There is an implicit assumption that Metcalf’s Law applies. However if Trust erodes, what’s the point of a Network? The open Internet is The Network, so if you want everybody they are here right now. The Social Network is valuable because it is exclusionary. MySpace is cooler/more valuable because older folks are not there. That implies some optimal network size. There is some good theory on this. However if this is true, it is a reverse network effect and that will have a crushing effect on Social Network valuations (but 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? I have never been a clique type of person and find myself part of many networks but not really an insider in any of them. Maybe I am unusual, but it is certainly true that 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.
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. Today the Social Networks are very open. They are likely to close down to preserve Trust.