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Business Week on Generation @

I can't think how many conversations I've been in with other consultants and online entrepreneurs who've predicted the imminent death of social network platforms (like Friendster, Google, Orkut, Myspace, etc.) – and I note here that I'm going to call them social networks hereafter for convenience, though I think it's important to distinguish between the technical infrastructure, what I call the platform, and the social network, which is not technology but intangible connections between people. (I make that distinction so that danah boyd won't slap me upside the head; excuse the digression).

There's just no business model, the smart people say. I myself have suggested that social networks lack real juice unless they focus on some object (or obsession), like Flickr with photos.

While we're having these academic conversations, though, the social networks just keep coming, and growing. Now Business Week has a cover story about social networks, focusing especially on Buzz-Oven, which is based in the Dallas/Fort Worth Metroplex. When you sign up, you have to choose a region in the DFW area – and there's no option to select a birth year before 1950. Buzz-Oven, like the incredibly popular MySpace, tends to attract a younger audience. In fact the article title is "The MySpace Generation," though later in the article, the author refers to "Generation @," which was clever.

In a way it's exciting to see new, rich online technology applications mainstreaming to the extent that many high school and college adopters take them for granted the way we took the telephone for granted in the last half of the 20th Century. In fact there may be no business model in the sense that some of my colleagues think of business, where the enterprise is distant from its customers, seeing them as "consumers" and "market segments" and knowing them by their statistical behaviors in aggregate. You can't operate communities that way.

I had a vision for this almost 15 years ago, when Paco Nathan and I built FringeWare, Inc. as "a street market in cyberspace." We realized that sellers and buyers had become abstract entities with no real relationship. Stores became soulless interfaces where the people selling the merchandise were clerks with little investment in the business. We figured we could change that by making a community of sellers and buyers, and take profits from the transactions. That's partly what we did, anyway... our vision of online commerce horrified the bankers we talked to. This was before the web existed and before there were secure methods for processing online payments; in fact we had to open a physical store before we were allowed to process credit cards. But, at least for a while, we were getting products from members of our community and selling them to other members. We also published FringeWare Review, a magazine with mail order catalog in the back pages. Through our email list and articles and eventual web site, our customers came to know us pretty well.

It's great to think that we can integrate communities and markets this way, and the potential's there. It can work even if many are strictly-business bottom-line about it, because all markets, including community markets, have people like that - they tend to glue things together. What could kill the goose, though, is greed. That almost happened in 2000, but we recovered because those of us who're passionate about online publishing, commerce, and community wouldn't stop what we were doing, even when we weren't being paid to do it (hence the blog phenomenon). Now we're getting paid again, and that's nice, but we don't have to become zillionaires, it's just not sustainable. A few million would be okay.

But I digress – or ramble – getting back to the Business Week piece... it wouldn't be much of a Weblogsky post if I didn't blockquote something:

Many youth networks are evanescent, in any case. Like one-hit wonder the Baha Men (Who Let the Dogs Out) and last year's peasant skirts, they can evaporate as quickly as they appear. But young consumers may follow brands offline -- if companies can figure out how to talk to youths in their online vernacular. Major companies should be exploring this new medium, since networks transmit marketing messages "person-to-person, which is more credible," says David Rich Bell, a marketing professor at the University of Pennsylvania's Wharton School.

So far, though, marketers have had little luck creating these networks from scratch. Instead, the connections have to bubble up from those who use them.

jon posted this at 11:27 PM
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