Critical mass vs network effects

Most people don’t remember this, but Google had a social network that predated Google+. In fact, Google’s social network launched a few months before TheFacebook launched as a Harvard-only site.

Google’s social network was called: Orkut. Orkut was invite-only, and the day it launched, an Orkut invite was a hot commodity in silicon valley. I seem to recall I was lucky enough to be one of the first few thousand users.

It was fun to use at first, but within months of launch, the user community started to change. I remember that as it started to really grow, I began getting several new friend requests a day… all written in portuguese. As the community rapidly changed, a lot of early users, including me, stopped using the site. Check out these demographic charts if you think I am exaggerating.

Wait a second, the conventional wisdom is that more users makes a community more valuable? Well, not in this case. US traffic and usage dropped like a rock. Orkut became an embarrassment to Google, and they quietly stopped talking about it. In fact, many people believe that Google stayed out of “the social networking space” for as long as they did because of how poorly they fared with Orkut. I wonder if Facebook would exist in its current form if Google had managed its nascent social strategy differently. Possibly not.

Critical mass #

Everyone can agree that an online community has to have critical mass to be considered useful. Getting to critical mass is a high bar: most consumer internet startups fail because no one cares about their product. Many startups are left with a ghost-town, with nary a tumbleweed blowing through. This is one of the reasons that “grow your userbase as fast as possible at all costs” has become VC dogma for consumer Internet. I can absolutely understand the reasoning behind this, but dogma is still dogma.

One additional reason that growth above all else is VC dogma is the assumption that consumer internet companies are free & ad-supported. Think about it: if you have a free service that doesn’t scale a large enough userbase, you end up with a desperate company that cannot financially sustain itself through advertising. Sounds like circular reasoning to me.

The “Suggested Users” mirage #

I know a smart reporter that has 429,000 Facebook Subscribers. Really impressive network effects, right? Well, take a look at the comments on one recent news story she posted to Facebook. Here are some of the “likes”. WTF? This is the best her 429,000 subscribers can come up with? Are there other people in her following that are scared to participate? Are her core fans just not seeing her posts in their newsfeed? Something strange is going on.

Similar things happen to other people I know with an abundance of Facebook subscribers. Facebook must have pointed a ton of random users at high-profile influencers, but it seems these random users are profoundly confused/looking for a date. Is this value? Is this what advertisers and Wall Street are looking for? I’m not convinced.

I personally went through a similar experience with Google+. I was added to over 5,000 Circles within weeks of launch. I remember asking my newfound community why they added me. The responses I got suggested these folks had no idea who I was, or how I even ended up in their stream. I suppose it made me feel special to have that much of an audience, but really, aren’t these big numbers a superficial numbers-game more than, well, quality?

Social networking tech press reminds me of The Three Stooges. Pretty much every day we get to read about Moe, Larry, & Curly poking and slapping each other with growth & engagement metrics. It’s entertaining, but the entire discourse is centered on who among them can build the most profitable-seeming vanity metrics from the perspective of Wall Street and advertisers.

Anti-network effects #

Anti-network effects occur when a community which has already achieved critical mass begins to lose value with each additional signup. The reason is that the core community that created the value to begin with starts to get marginalized and leaves.

In my opinion, Quora is more “valuable” than Yahoo Answers. But I would argue that Quora could easily become Yahoo answers if, in the pursuit of “network effects”, they begin to dilute the quality of the community, and which would have the side effect of causing the most interesting and value-adding users to vacate. The Quora team is clearly aware of this risk, and are apparently steering the ship in such a way as to avoid this possible outcome.

The power of the asymmetric model + global feed #

Twitter’s growth model is a nice blueprint for getting a critical mass and then growing to global scale. Specifically, if you launch with a small, dedicated group of interesting people that can asymmetrically follow each other, along with a global feed of all content posted, you can feel like you are the member of an interesting and vibrant community.

As the site starts to scale, the early userbase will depend less and less on the global feed, and use their own feed/following list to crank up or down the amount of information they are presented with.

The asymmetric follow model also takes care of some of the strange things that happen on Orkut, Facebook, Google+ etc. Strangers can choose to follow you, and @-reply to you, but it doesn’t feel like they are “putting” their troubling messages on your content.

It should also come as no surprise that Pinterest and Instagram followed the Twitter blueprint of asymmetric follows + global feed to scale from a small critical mass of interesting people into a massive, global community. Those sites were fun and useful to early adopters on a small userbase, and have managed to keep their community mostly solid throughout massive growth. social infrastructure, not a media company #

When I look through the current backers of, I am excited to see that it appears to have a large overlap with the early adopters of Quora and Instagram. What these early adopters have in common is an interests in quality, novel approaches to old problems, business models of 3rd-party “indie” developers, and willingness to be a part of something new and strange. I could not imagine a better group of people for

I believe that a critical mass of users and developers can take the basic plumbing we have in our API and webapp, and build a vibrant social ecosystem. My personal hope at this point in time is that our official webapp functions as a proof-of-concept that the API is sound, but is a bootstrapping medium by which novel integrations are built. Remember: Twitter community members, not employees, invented hashtags, retweeting etc.

The point of my post, What Twitter could have been, was to point out that they had the chance to jump off the precipice, abandon their official apps, and let the entire service be the API. Instead, Twitter chickened out and have decided to systematically control and destroy the ecosystem in the name of advertising. I am trying to make a “do-over” on this mistake, armed with the benefits of hindsight and a radically different business model that has fundamentally different alignment of user & financial incentives.

If we look to history, infrastructure innovations such as electricity, cellular phone service, and the Internet are judged by the longterm value that was enabled and circulated throughout their ecosystem, not the amount of value that corporations directly captured. If “social platforms” really are as fundamentally important as many of us believe, they should start behaving more like infrastructure, and less like the entertainment industry.


Now read this

The Xbox developer ecosystem

Some fascinating insights from the founder of the Xbox project: My gripe is that, as usual, Microsoft has jumped its own shark and is out stomping through the weeds planning and talking about far-flung future strategies in interactive... Continue →