Why most social networks will fail

These days it seems like new social networking websites are popping up like it's going out of style. The main problem with this is that most of them are being created in the hopes of making the owners rich instead of building a thriving community. Here are the main reasons why most of them fail, and how they might be able to avoid failure:

Don't be a copycat
MySpace and Facebook have been out for years and are established, which is why you should not try and overtake them. There is nothing wrong with taking a piece of their pie, but copying them outright is not a smart idea because if you are creating just another me-too service why will people switch to your social network? If you just have an exact replica of MySpace of Facebook, chances are that you will fail. There are a few exceptions to this, such as Bebo who took over the U.K. market because the U.K. market was being underserved by MySpace. If you are trying to grab a piece of the pie from a bigger, well established social network, that's fine but make sure you are not just copying them.

Carve your niche
A lot of the new networks that are being released are so broad that the costs of marketing them and gaining users are too high. It is hard to dominate whole markets such as the sports industry unless you have millions of dollars at your disposal, but it may be a lot easier to dominate a market such as skateboarding. You might not make as much money going this route, but if you carve your niche your chances of success are much higher. Later on, you can always decide to expand like Facebook, but first you need to build a strong user base.

Be prepared for the worst
One of the most important things when releasing a social network is to make sure you can handle the load. The last thing you want is a million people waiting to use your service when you can only handle a few thousand users. Although this seems like a good problem to have, this is only true if you have the resources to act quick and scale your website. Friendster had this issue a while back and it hurt them drastically because people started to turn to alternatives such as MySpace before Friendster solved their scaling issues.

You, you, and you
Many of these new social networks that are being created ignore users' needs. Advertisements are put from day one and the community members are being ignored. These social networks are all about monetizing users instead of figuring out how to make them happy and making sure they keep coming back. This may work for sites like MySpace, but they were one of the firsts to enter the market and because of their market share they have the traffic that allows them to do what they want. For new social networks, users have to be satisfied first or else they will turn else where.

Some of these things might seem obvious to many of you, but you would be surprised by how many people I have talked to that fail to realize these points. Understanding what motivates your users and using this knowledge to create a community that grows itself is ultimately the most important factor that determines success or failure for your social network. The "breakout" social networks such as MySpace, Bebo, YouTube, Flickr, to name a few have mastered these tactics.

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Fewleftstanding.net, November 21, 2006

“Why most social networks will fail” — I was browsing Digg last night and I saw an article about why most social networks will fail. The author (Neil Patel) writes a much better explanation then I did in my other social networking post. Good post Neil, I agree 100%. ...

Reader Comments (10)

Josh, November 20, 2006

Most social networks just don't give their users a good reason to stick around. Their must be something other than the social aspect for these types of sites to have a chance.

Neil Patel, November 20, 2006

Josh, this is the same reason why I stopped using Facebook. They did not give me any reason to stick around.

Michael, November 20, 2006

I love Facebook! I don't really understand where this criticism for Facebook is coming.

I think the key here is understanding your audience. College students can't get enough of Facebook but I can understand why older people don't really find a use for it...

Why do people use Myspace? Because their friends are on myspace. The typical person doesn't really care about web design to be perfectly honest. They care more about the social interaction.

Neil Patel, November 20, 2006

Michael, I used Facebook but never really liked it. All my friends use it and are addicted to it, but I just don't see anything that draws me back it.

But the one thing that I forgot to mention was that I am a unique case because I never signed up for Facebook, instead I was one of the testers for their corporate version. It is probably just me though; Facebook is worth millions of dollars if not billions so they did do something right.

Ankit, November 21, 2006

I whole-heartedly agree with you point, most of the new social networks might fail, since the space is getting real saturated. Only those social networks which caters to a particular audience will be able to leave a mark, and build a solid community.

One of the most under-served communities which could evolve into social networks are blog networks. The 9rules community which your blog is part of is doing a good job in building the community around their member blogs, but much work has to be done. The blog network I am part of Instablogs, was also suffering from the same problem. We were not able to bind our readers and bloggers together with a centralized platform. This made us evolved into a Social Network. This not only helps us in highlighting the posts made on over 100+ blogs, but help in getting bloggers and readers together by providing them plethora of social tools.

One more thing I also want to add is, it wont be easy (infact it would be impossible) to build another Flickr, Myspace or Facebook. Anyways the days of big communities are going very fast. The communities which are small and tightly embedded within themselves will rise. Dogster is a great example of building a community among people who love Dogs. Popsugar again is build among young women interested in celebrity gossips. In coming days we will find more and more niche-focussed communities arising. You might not agree to this, but I wont be surprise to see Myspace, Facebook taking a downward turn in coming days.

engtech, November 21, 2006

One counter-argument to "do not copycat"... Friendster was around before MySpace.

So copycatting is good, provided you're copying something that is spiraling downwards and you do a better job.

Jamey, November 21, 2006

You've hit a couple key points regarding identifying your niche and making the network worth returning to. I'm working at a company who is developing a social network and game site for kids and that is the constant challenge. We've identified the audience and are working to listen to what the users want and developing content that they can customize and get involved with.

These networks need to stay connected to users and their needs because there are plenty of new sites that will be happy to have the new members

Neil Patel, November 21, 2006

Engtech, thanks for pointing that out.

Ankit, November 22, 2006

-- One counter-argument to "do not copycat"... Friendster was around before MySpace...

Myspace didnot copycat Friendster, but work on the features already present in the Friendster, and evolved them into into better tools.

Digg as a social tool/site had nothing new to offer when compare to del.icio.us but the concept of voting was actually a evolution of the feature already present in the del.icio.us

Paul Fisher, November 28, 2006

Some communities are able to focus on pleasing and incentivizing their audience and also pleasing their advertisers / backers. Islandoo is one such company. Have a look: http://paulfisher.typepad.com/growthtechnologyventure/2006/10/islandoosandd.html