Social networks are dead, long live social networks
Linking user growth to early success in social media has led us astray
It has been a rough couple years for social networks. Some strong contenders like Secret, Peach, and Yik Yak exploded and fizzled out at record rates. Even with a record amount of venture capital pumped into the category, you can still count the number of potential successes on two hands.
Even success stories like Vine have been shuttered.
These flash in the pan stories have left a lot of people feeling it’s the beginning of the end (or end of the end) for consumer tech on mobile. What they aren’t realizing is no one ever fully thought through the implications of mobile on social networks.
People took growth, which was the old metric of success on web, and applied it to these mobile products and assumed that meant these products were working.
The growth curve for a social media app can look a lot like the growth curve of a working website did in 2003–2012. Tools like push notifications and the always on, always available, nature of mobile offered totally new set of tools and environments for growth.
With pretty minimal exploitation, it’s now possible to brute force your way to numbers that offer the mirage of a long-term engaged audience.
You don’t even need to brute force growth anymore thanks to the advancements in analytics we have seen over the last five years, all of which can now be baked in from day one. Unlike web, mobile users are persistent and always logged in, this allows you to track funnels and goals up to the second. Not only do mobile phones provide a toolbox for faster growth but companies now have the tools from the start to let them micro-optimize those growth funnels.
You see it in the numbers of successful products as well:
The accelerated rate of growth does not come with the same benefits that the older, harder to achieve, web growth came with. We see it as companies with millions of users are shut down over and over.
When covering Secret’s demise Mike Isaac wrote this:
Secret’s trajectory illustrates the flash-in-the-pan nature of Silicon Valley’s current technology boom. Even as a handful of start-ups rise to stratospheric valuations and take in billions of dollars in financing, other privately held companies cannot sustain their following.
This was a full year before the shutdown of Vine and when Twitter was just starting to show stagnant growth.
These flash in the pan products are happening because as much as mobile has enabled overnight, massive, growth it has broken down network effects. As quickly as people are willing to try out a new app (and bring their friend graph from another social network or phone book) they are willing to move on.
And if nothing else, this is the final nail in the growth investment strategy coffin.
As we move forward and growth and network start to become ubiquitous, products will need to provide clear value-add to creators and consumers. Because the growth strategy was enabled by an ad-based monetization strategy products will need to make sure to have clear alternative monetization strategies as well.
We will also need different metrics than ones we have now (as Twitter’s MAU has become flat has it not become more important than ever?) and it’s going to take a pretty significant shift.
But, just as people learned the importance network played in the last consumer tech evolution, I believe people will over time learn to appreciate that long term value is what the next networks will be built on.
If you are into this and more thoughts on running a company and building a product listen to Bumpers on Bumpers at bumpers.fm/iano.
