Top 6 Rules For Social Networks

In recent days, we've spent time with a number of veterans of the social networking business. One of the surprising things we have learned is how much experience these people now have, and how much they agree with each other about some of the basics of the business.

Just a few years ago, when companies like Friendster were emerging and outfits like Twitter still did not exist, social networking was a little-understood phenomenon. Experience has taught us a lot, however, and practices are starting to standardize. That is not to say that something new will not pop up, or that no new business will be created; this is still capitalism, with plenty of room to surprise. Whatever does happen next, however, the emerging rules will likely play a role, either in system construction or creative destruction.

Here are six points everyone seems to agree on...

1. When you have scale, it's good to fail.

When you have millions of users, you can, and should, experiment with some small percentage of them all the time. The field is so new that there are no set rules, and failure is tolerable for the sake of a decent feedback loop. "Things change so fast, you are best off just doing things by trial and error," says Gina Bianchini, founder and chief executive of Ning, a service that provides a template of design tools for people to build their own social networks. About 5,000 networks are created every day on Ning, and 80% of them are short-lived or fail. That still gives Ning 250,000 networks on which it can place ads, watch behavior or charge for premium services.

2. Seek the unique.

There are too many social networks, too many styles of discovery, commenting, sharing and all the other aspects of participation. People are fatigued by choice. All is made worthwhile by finding a group that is as passionate about some specific area of your life as you are. That may be work, a la LinkedIn, but don't expect most people to socialize there. That may be family, like with Facebook, but you tend not to see such a broad range of behaviors. The third aspect of most lives--hobbies and interests--is where you encounter the greatest variety. If there is room to grow a new social network, it will have to center on a passion, something people feel is particularly true of their own personalities.

3. The default position is rampant suspicion.

Trust is possibly the most valuable currency on a social network. At its best, people are giving up important parts of their identity. Doing so successfully, so that fans, friends, and like-minded strangers respect them, binds users closely to the network. That loyalty is perpetually at risk, however, and network designers say users' worries are manifest when they don't understand something about the social network.

"In the absence of information, there is an assumption of conspiracy," says Jay Adelson, one of the founders of Digg, a social news site. That may be simply because social networks are so new, or that the medium of computer networks lends itself to fears of anonymous control. The solution, from a provider's viewpoint, is to be as clear as possible about why you are doing something, even when it seems obvious to you.

4. Trust is at stake, so make things opaque.

Paradoxically, being open also involves refusing to disclose certain things, particularly things about how ranking and filtering systems work. "All algorithms get hacked by somebody," says Kevin Laws, a former executive with Epinions, a social rating site that was purchased by "You have to remove the transparency around how your algorithms actually work." The audience can only trust the system if they know that the system cannot be gamed, and that means they can't know everything.

5. Esteem is how you gather value.

French playwright Moliere compared writing to prostitution: You start off doing it for love, then for a few friends and finally for money. The history of the social Web is basically the opposite. Sites like Epinions and Digg began by paying people money to comment on things, and found nothing but problems--some people gamed the system, while others did not trust the results. As in open source software, a lot of the positive motivation to participate comes from the recognition you receive from other participants for doing a good job. Money just confuses things.

6. Secret names were made for flames. To raise the bar, say who you are.

When Digg started, Adelson recalls, "anonymity was key; there was a sense people needed privacy. Now people are used to living in public." Part of that may be an effect of Facebook, a wildly successful site with very little anonymity. One-third of Digg's new users come from the Facebook Connect service, and these folks are used to being seen by others. They tend to behave more responsibly as a result, and may get better value in terms of how much others trust them. Down the road, they are also likely to be targeted with more personal ads--whether that is an intrusion or a value-add is a rule that has yet to be worked out.

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