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More Traction for Niche Social

April 21, 2012

Our regular readers are well aware of our enthusiasm for the prospects of niche social networks to spout from the fertile soil cultivated from the unprecedented adoption of the major social offerings.  For the record, as of this post, ‘Major Social’ is approaching 1 billion users – Facebook alone!  (Facebook’s IPO filing updates earlier this week stated, among other things just as interesting, that their registered users exceed 900 million).

Full disclosure… many of our own New Market Entrepreneurial projects are focused within the niche social space.  So it’s likely no surprise we are enthusiastic.

Our view:  As the majors grow, more users are introduced to both the joys and the frustrations of social.   Like all organized markets, –legal (think smart phones)  and illegal (think drugs)– it’s always good news when the masses experience an entry-level introduction to what (for many) becomes an irresistible affliction.    Initial introduction leads to habitual adoption and, ultimately, levels of refinement where users become dissatisfied with generic and seek out more specific solutions to their needs and tastes.  Blackberry users step up to iPhones or Andriods.   And, sadly, casual drug users step up as well.  It is human nature.  We always seek more and better.   In fact, the boating industry probably has leveraged the very human need for ‘higher high’s’ as well as any.  Boaters will understand.  The rest of you, sorry for digressing.  But it is true anywhere passions run high.

As we have stated in the past, for social the levels of refinement are best described by the age-old term ‘birds of a feather flock together”.  After a while refined (and topic-passionate) users tire of the noise and seek deeper interactions on the topics that most impassion them.

With this perspective in hand, it’s not a surprise that we would become enthusiastic over this post from Bloomberg BusinessWeek entitled, “Facebook, Google Must Adapt as Users Embrace ‘Unsocial’ Networks” — it makes our argument much better than we ever have or will!

When Facebook bought the photo-sharing app Instagram for $1 billion, theories flew as to what it might mean. Was Mark Zuckerberg defensive, worried that his 850 million Facebook users might stop uploading 250 million photos a day? Or was he making a proactive move into mobile, where Instagram’s friendly interface makes Facebook look clunky on iPhones?

The real story is both—and one of splintering social networks that are breaking up the vast, open “social graphs” that give Facebook and others such power. Facebook’s acquisition of Instagram is a signal that smaller, closed networks are growing popular by giving audiences more control over what they share. The networking giants, such as Facebook and Google, will have to allow consumers new ways to build tighter social circles. And marketers will face new challenges in “going viral” among the masses.

or nearly a decade, marketers have been agog over the promise of social networks to provide free advertising, a cascade of word-of-mouth in which consumers act as advocates for a brand or product. The dream is based in part on Robert Metcalfe’s law—the concept by the inventor of the Ethernet that in any networked system, value grows exponentially as more users join. Like the old 1970s shampoo commercial, you tell a customer about your product, and she tells two friends, and so on, and so on, until the world is knocking on your hair-products door. Going viral like this requires massive connections of friends.

Trouble is, Metcalfe was wrong, at least with human networks. In a landmark 2006 column in IEEE Spectrum, researchers Bob Briscoe, Andrew Odlyzko, and Benjamin Tilly showed mathematically that networks have a fundamental flaw if all nodes are not created equal. The authors pointed primarily to Zipf’s law, a concept by 1930s linguist George Zipf that in any system of resources, there exists declining value for each subsequent item. In the English language, we use the word “the” in 7 percent of all utterances, followed by “of” for 3.5 percent of words, with trailing usage of terms ending somewhere around the noun “floccinaucinihilipilification.” On Facebook, your connections work the same way from your spouse to best friend to boss to that old girlfriend who now lives in Iceland.

Human networks, like words in English, have long tails of diminishing usage. New, smaller social media tools are resonating because they recognize we have limits on what we share and whom we listen to.

-read more-

We bet you have your share of “floccinaucinihilipilification” friends in your network from whom you care not about what they have to say and we are betting the feeling is mutual!

The piece goes on to share many of the hot niche-social networks we have recently mentioned, Path, Instagram, Pinterest and a few others.   And there are scores more not mentioned that are posting incredible numbers… this week niche social video has been hot with Viddy and SocialCam earning the rights as poster children.  And what’s really important about their traction success stories is the fact that they are leveraging the gravitational pull of Facebook to propel their own orbital trajectories via Facebook’s social graph.

We see the days of widespread niche social networks enjoyed by users in conjunction with the ‘bigs’ close at hand.  Are you niche-ing out yet?  Let us know!

2 Comments leave one →
  1. April 26, 2012 10:22 pm

    Great post. I am a believer in the power of niche networks being the co-founder of one for Motorsport enthusiasts –
    We are in early beta but the activity is promising and proves that niche has a future.

    • April 27, 2012 2:48 pm

      Thanks Chris, good luck with trackmytrails! We’ll be watching and rooting for you guys. Keep us posted.

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