Monetizing Social Networks


Jinal posts her thoughts on the issue:

When I look at some of the recent start-ups and existing networks, 
– it clearly comes off as these sites were started to 1) build a
community first and  2) figure out a rev. model then.
The risk these companies run with such a model is that the expectation
for the community is already set: the community already believes that
this is a free service and they begin to conform/ expect and fall in
love with that frame of reference.
Once you try to change that frame of reference, you risk uspetting or
even losing your community or your fans. And rightfully so – because
you are trying to change the core product that the community first fell
in love with.

Which is why, it only took Threadless 3 years to make profit and
neither of the companies stated above are even breaking even yet.

Which is also why, I think Opensource and crowdsoucring and “Free”
are the domains of companies that already have money and are not
particularly expecting to see a return on investment. I also think
Opensource is a fantastic domain, and possibly, should become the only
domain for social good/ social design and social causes. When the
collective agenda is to ultimately “do good” – concepts like open
source and crowdsourcing are not only incredibly useful, but also
cost-effective.

My thoughts:

Stand alone communities which think they can build a community and then get businesses to leverage that community don’t know either of their clients. Neither wants to be ‘pimped’

I’d encourage organizations to engage and converse with users using the community. Forget monetization – get ideas on usability, design, service and make your products and solutions better.

That should be ROI enough!

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About Gautam

Gautam is a HR professional interested in how emerging technologies are impacting work, careers and organizations.

Posted on November 18, 2008, in online, social media. Bookmark the permalink. Comments Off on Monetizing Social Networks.

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