Can You Build A Network On Top Of Another Network?
By now, regular readers of this blog should be pretty familiar with USV’s investment thesis centered around investing in large networks of engaged users that have the potential to disrupt large markets. I’ve mentioned it frequently here and my colleagues have also blogged regularly about it.
Today I got a tweet from Jon de la Mothe about the growth of professional networks on Facebook:
Professional Networks Built On Facebook Are Growing Like Crazy zite.to/H9KjuP via @fredwilson
— Jon de la Mothe (@delamothe) March 27, 2012
And I replied with this tweet:
@delamothe are they networks if they are built on top of another network?
— Fred Wilson (@fredwilson) March 27, 2012
I think it is possible to bootstrap a network on top of another network. Stocktwits did this on Twitter and Zynga did this on Facebook. But both of them eventually built their own networks directly on the web and mobile. Zynga still gets a ton of game play on Facebook and Stocktwits continues to benefit from tweet distribution on Twitter, but they have made the necessary investments to operate their businesses in such a way that they are not entirely dependent on other networks. In the case of Stocktwits, they did this early on. In the case of Zynga, they waited for a while to do this.
But my question to Jon is a bit different. I didn’t ask if you can build a network on top of another network. I asked if it is a network if it is built on top of another network. I think in that case, the answer is no.
There is a third way, which are networks of networks. My partner Albert has blogged about this and I am 100% in agreement with him that this is the way the market should evolve. I believe that the Internet is an operating system and the networks that operate on the web and mobile via the Internet should interoperate with each other, share traffic and distribution with each other, and act as peers with each other. This is in keeping with the architecture of the Internet and is the most sustainable model and the one I am betting on in the long run.
FB has become a platform now … so … it is actually a “network built on top of a platform.”than”network on top of a network”.
The key test of survivability of a network grafted on others is – if you cut off the first one, will it survive on its own?
100% true that.Have to analyse whether it is a “Parasite” or another “Host” sharing the same resource.
I think the flip side of this post is to note that a lot of founders have to ask themselves a question – do we have a legitimate business and website, or are we a Facebook app?
Is Zynga a Facebook App?
not any more. i don’t know the numbers. maybe they will disclose them in their next quarterly call. but i am sure that they are getting a ton of game play on mobile and that draw something will only increase that
Fred pretty much summed it up, but I would argue that for the longest time, they were. I’d like to see the growth numbers in Daily Active Users on zynga.com versus the Facebook apps. As far as I’m concerned, their mobile games are a different business model entirely.
Same business model, different platform.Is Apple’s 30% cut from iOS really that different from Facebook’s 30%?
As Fred bluntly said last year, don’t be anyone else’s bitch:http://techcrunch.com/2011/…Zynga had hit products that people flocked to on their own, with Facebook initially giving them exposure and pushing traffic. FB was a great way to spread the word, but the product is what sustained them. When they were ready, Zynga moved off the Facebook platform.
FACEBOOK PLATFORM, OR JUST DISCOVERY ENGINE?
Facebook played both the role of a platform and discovery engine. Once Zynga’s games became popular enough, they were not reliant on FB as a discovery engine. With the money that success brought, they were able to sustain their own architecture well enough to develop a full platform for their games. So they didn’t need FB for that either.FB’s platform launched many companies that would have not received the exposure otherwise. The ones with a product that was actually good, can survive on their own. Services like heroku.com now offer the platform for smal/new companies/developers. Facebook and Google still serve as the discovery engine.Apple played the same two roles with their iPhone/iOS as platform, and Apple Store as the discovery engine.From a developer’s point of you, we can concentrate on the engineering part, and leave the marketing and fundmental system ops (uptime, scaling, etc) to external parties like these… #winwin
It’s amazing to think that Facebook with all its might was built primarily based on Liking, Sharing and Linking- 3 pretty low level Social Gestures. It takes less than 1 second to perform each one of these tasks.
And Pinterest does all three with one click…
I’m sure if Facebook had the chance to use a mind-reading device to input all of your valuable data, they would.. without your permission too – though you could possibly opt-out by adding a META tag similar to Pinterest’s “no pin” …
its overwhelming. not elegant but obviously has scale.
Sent this reply by email a LONG time ago but Disqus didn’t post it…There is something about it that fits the neural pathways for more women than men.It doesn’t appeal to me, but Pinterest has dropped Facebook’s share of my wife’s social network time from 80% to about 30%.
There is something about it that fits the neural pathways for more women than men. I can’t really get into it, but Facebook’s share of my wife’s social network time has dropped from 80% to 30% as a result.
yeah ..a lot of talk about pinterest being loved by brands ..appears to be potential there vs facebook
It’s much closer to purchasing intent than Facebook is…
It’s much closer to purchasing intent…
It’s might comes from the simplicity of the gestures that connects people broadly at a very thin but core level. Broader and narrower instead of deeper.The issue is whether you can layer on niche communities, commerce or even discourse on to this. Or whether the language is too simple to support it. My sense is that Facebook’s inherent limitations are themselves spawning the growth of vertical niche marketplaces outside.
Why would you want to grow a self-sustainable network on a platform who will in the future attempt to a) ‘extort’ a % of revenues from you, b) control how much exposure you get in users’ feeds..
Your questions are so well put the answers are self evident.That being said, businesses are about getting found by the right people. Everyone is on Facebook. And just because Fcommerce is a misnomer (IMO) doesn’t belittle the value of the huge pedestrian mass of people walking right by your ideas. The relationship between liking, sharing and buying holds the key.
“pedestrian mass of people walking right by”I love it!I don’t disagree that these large networks needed to exist before their trickle effect could happen, and pave the way for the investment money to be risk-averse enough into put into these smaller niche communities.If the cost of acquiring new users didn’t come down to more in-line with what Fred considers marketing (customer support and some outreach vs. advertising), then the risk to competition coming in and copying your product + having deeper advertising budget would make it too uncertain … but inherently this puts the focus on developing a quality product because that alone is enough to bring in the users (via word of mouth / usefulness, etc.); Networks that have inherent virility in their tools will be the first ones we see scaling / being invested in.That’s why I think Facebook will be much less relevant in 5 years too. There’s so much UI/UX improvement that can happen but it can’t with their business model.Edit: Added some
I don’t worry about competition as much as value. I don’t ignore it but it doesn’t scare me.Thanks to @andyswan:disqus who got me to reread Blue Ocean Strategy in the hammock on my vacation last week. The parable of Cirque du Soleil keeps giving back.If you can see the blue ocean, screw the rest and just go do it!
“If you can see the blue ocean, screw the rest and just go do it!”Another awesome Arnold quote.I read the Blue Ocean Strategy many many years ago. I wonder if/how much that subconsciously influenced my direction. I know I own it, just not sure where it is.. likely in a box at my parents’ house which I don’t want to go hunting for.I do want to reread it. I’m planning to go to Halifax sometime this summer, to a place my family has there that I spent a lot of time as a child at. It’s on the water, yacht club in the basin. Constant breeze during summer. Nice and relaxing. If anyone wants to join me there are a few places to sleep! 🙂
We shouldn’t forget that a product’s perception exists in the minds of it’s users/customers. A deluge of incredible features isn’t enough to overcome a poor impression.Inherent virality is a combination of perceived value and sex appeal.
@VictusFate:disqus Great insight re: sex appeal. Many products/services still could be disrupted due to their lack of sex appeal/personality, though I think we’re seeing that more and more, especially with the rise of investment towards the creative types.
facebook will be less relevant in the way that google and microsoft are less relevant
@fredwilson:twitter I’m really not sure Facebook will be able to hold a foundation like Google or Microsoft.Sure, they can take a defensive stance and maintain their controlled ecosystem for awhile, and fend off potential competition using whatever billions in IPO money they get to sue anyone doing anything similar for patents they have, but like you and many others, I too want to see patents totally gone – they just hurt innovation, and if people truly want to support innovation, prove to people its benefits, build your crowdsourced fund to let your innovation go through the motions — there can only be much less waste.This will also be celebrities of the future, those who push for seeking funding and support for their innovative ideas.And there will be many many of these kinds of people who will make discoveries – and be celebrated even for their attempts / efforts / passion (locally and internationally) – and if we also create a society where everyone is taken care of at a minimal level and doesn’t have to worry or fear about survival then all energy can go into being social, being creative, connecting with eachother; Love, compassion, learning.Ahhhhh… a glorious future. 🙂
As we move forward, this has been an argument that I have been losing for some reason….I believe that our network, which is definitely a niche, must focus on depth of engagement which I do not believe is possible on Facebook (outside of my own experience and reviewing the results of this thing known as “f-commerce” I believe I am right) but everyone else wants to start our network from facebook.There is something superficial about facebook, for example, what does a “like” really get you? People “like” things and never venture to the website that they claim to like.I do like the concept of sharing networks; I cannot help but believe that connecting on a deeper level will involve opening up a broader “view” of ones various activities on the internet (do I have a deeper connection with Arnold because I know he is an expert on wine? Do I have more trust for the opinion of Fred because I know what music he listens to (he has yet to convince me to buy any of his weekly choices 🙂 )?
Networks are platforms for behavior.Facebook did something very right. But just because everyone is there sharing and cheerleading each other doesn’t mean that we will transact, converse or watch TV there. But we do share. A lot. We are foolish not to be there for certain activities.I had this discussion with a client. I wanted to say to his incessant push for measurement and ROI, so just close down your page and your Twitter feed. Design the community for the communities needs and find the intersection with your business goals.
Arnold, as I tell everyone about Facebook, “…we will never get a sale from Facebook and thus we have to develop another way to measure ROI.”My demographics make Facebook a necessity from an advertising perspective, just like in my demographics the number one way to get a sale is via shopping.comBut to get depth, to get consumers to interact with each other involves a lot more. But I do wholeheartedly agree with the statement, “We are foolish not to be there for certain activities….” I just think too many people expect too much from Facebook….
Hey Carl! Long time no reply.(disclaimer: this message is post-morning coffee)”there is something superficial about facebook…”I would have to agree with that observation. But to take that further, what I think is superficial isn’t anything that facebook is itself, but the person who uses it. In my opinion certain people are afraid of social intimacy so instead of grabbing a coffee with a friend or giving someone a call they go on facebook and surround themselves with [safe] surface level interaction. Facebook gives the user complete control over who they talk to and how they do it. If someone posts on your wall, sends you a message, or likes a post of yours there is an ignorable amount of social pressure forcing you to respond (and even less pressure forcing you to respond in a meaningful way). Therefore, facebook is a great place to make that initial interaction happen, but you need to take people out of their comfort zone and put them face to face (or something else) in order for them to connect on a deeper level
“put them face to face (or something else) in order for them to connect on a deeper level”This is something that many are never given the support to navigate and learn how to connect on a deeper level, and then the avoidance mechanism can kick-in, and then ‘Facebook’ is the perfect hiding place again.
I wouldn’t say that they aren’t given the support that they need, that’s what the first 18ish years of your life are for, learning how to be a social being. But you are right when you say facebook is the perfect hiding place. It makes it too easy to avoid actual human interaction by satisfying yourself with little snacks in the form of notifications. So people begin to fear what might happen if they are forced to perform in the social realm and opt to stay in their sheltered facebook world…? maybe that’s a little to critical/removed but it sounds good and there might be some truth in there somewhere :PI’ll admit that I am part of the group that I’ve described in my previous comment and this one. So many times have i sent someone a message on facebook when i just as easily could have met with/called/skyped. Why? Because it’s easier, less stressful, and much less of a time commitment.
Breadth vs depth. Breadth by its definition requires a simplicity that is incapable of catering to the needs of a rich and deep experience.I’ve yet to experience the ideal combination of community and market. But we’re getting closer. If there is anything formulaic about a deeply connected net instigated community, it would beget a booming new economy. I suspect there is no such pattern.Instead there are principles which encourage the formation of unprecedented community marketplaces. You know them better than I.
Well said. Couldn’t agree more.
Kickstarter is close….
They’re working hard to create a community, and began with a marketplace of interests. Bolting on community is damn near impossible, it’s gotta be baked into the core of the platform/app’s identity.
you nailed it…..and it’s a real challenge, in my opinion. on the flip side, if you start with the community and try to bolt a marketplace on, you run the risk of “i dont want to shop here wtf” type of vibe going on. but i think with all the stuff like livingsocial, etsy, kickstarter, blogs, game mechanics…..we’re getting a bit closer.
Well said.There’s some innovation happening embedding transactions within shared object that may bridge this somewhat.If all objects can be transactional as well as social, the gap closes a bit.
facebook is a photo sharing site first and foremost. that’s why instagram’s emergence as the go to photo sharing service among the youth sector should be concerning to them.
I’m surprised you think it’s primarily a photo sharing site. I agree that’s one of the main sticky-points, though you think it’s the main?
Photos as social object as personal shareable icons.Not just a ‘photo site’ but a photo site that perfectly platforms and gets that people cheerlead theirs and their friends lives through images.Who needs Hallmark when you have Facebook with greetings and utterances as dynamic objects?
I understand how it’s a social object, and it’s powerful – no doubt.Perhaps I’m just fixated on the importance of the lower level tools (messaging, liking, sharing, connecting), and whereas a photo album allows for all of these ‘actions/features’ to be applied to a centralized object all at the same time.So then yes, that makes photos / photo albums’ importance have the multiplier effect of all of those at the same time. Okay. Thanks Arnold. :)Next step is perfecting group-watching.. already have that idea figured out. I wonder if my hate for how Facebook was founded is driving me to help take it down (and their control, and their blatant disregard for people).
I swear I don’t have a single friend that uses it for anything else… Facebook is the place to see photos of your friend’s kids spilling their cereal. It doesn’t have a much deeper purpose in my opinion.
Your Facebook friends are the people you went to school with. Your Twitter friends are the ones you wish you went to school with.
Always there with the pithy comment Brad! So true though!
Come to think of it, it’s photos I’m tagged in from events I went to are mostly why I end up on there. Sometimes contacting someone is easiest through Facebook.
A few grandmothers may disagree with you.
WhiteWine is a good snapshot at things on Facebook that are not, erm, snapshots ;)http://whitewhine.com/
yes. i’ve said that publicly a few times. http://venturebeat.com/2010…
man instagram is just plain awesome. i totally agree.
I disagree with the thesis that Facebook is primarily a photo sharing site. I have no data, but it does not ring true with the usage I observe.
Youth behaviour on Facebook is changing pretty fast.They used to want 1000 friends – now they are wondering who those other 400 pple are. They take ‘breaks’ from it and make their friends change their passwords. It goes on and on.Facebook may or may not be the leading social network in five years. And thus why it’s always a danger building networks upon networks.
both my daughters suspended their FB accounts during midterms week. that means FB is stil quite powerful in their lives.
yes agreed.also means it can be perceived as a “distraction” 🙂
Michelle explained the snooping addiction to me. I still don’t understand why some folks love to see what they’re “not really friends” post.
I agree and disagree… People use Facebook for other things… 50% of the posts are not photos, but photos in general get lots more interactions – likes, comments – from what I’ve seen
The power of facebook is context around interactions and relationships. Photo sharing by itself is not that interesting. What is interesting is knowing why two people will find the same photo interesting. The value is not in the act of sharing, the value is in the context around the relationship. Facebook has that explicitly, instagram, twitter, pinterest et al only have implicit data
thats sounds better erik
Interesting but this is changing.Groups on Facebook function like groups on LInked In except with a better platform for sharing.If you pull the idea of ‘friends’ out of Facebook, where’s the context?
From personal experience… Most of the photos on Facebook I see are new babies and toddlers of my friends, pets, vacations… I really don’t pay too much attention to who else likes the photos… People “like” things that are noncontroversial in my network… Making the context around who likes what less interesting.
Other than making potential better advertising predictions, are there any further benefits implicit vs. explicit for the user?
All of these are ad driven businesses so making better ad predictions is the whole enchilada.Facebook explicitly knows who I went to school with. Who I worked with. Who I dated (If I had dated during the facebook era…). All this is context that layers on top of the implicit data of who I interact with.
agree totally…..fb has the graph
@ErikSchwartz:disqus For me at least, I have absolutely no interest to click on ads shown to me on Facebook. I use other sources for determining what I’ll use as services / what I check out, etc.. That fine-grain detail I think is over-prediction.Perhaps someday there will be a much better prediction engine in place, but what’s more important is when certain ads are shown to you as showing ads in the wrong context will miss the critical moments when engagement can occur.
the ads on FB are god awful. i saw an ad for dental surgery there the other day. oh god.
It’s the way it asks me to ‘Like’ an advert that baffles me. Disconnect.Totally dumb system, Fb/ads.
i don’t use instagram. i hope to soon (android). but i watch my kids use it. and i can tell you they are loving sharing photos on it. way more than they love sharing photos on FB.
As both Instagram and Facebook are free ad supported sites (I assume that’s where instagram is going) you are not the customer, you are the product being sold. Your value to each of their real customers (advertisers) is dependent on what they know about you. Instagram has your email address and where you’ve taken pictures. Facebook has everything.
It’s been the app I am most social with for several months, now. I love it – great sense of community, very civilised and stimulating – and fun. Long may it last.Look forward to seeing you there, Fred – as ever, I am to be found as ‘egoboss’ 🙂
It is the only value i get out of it
“facebook is a photo sharing site first and foremost.”I agree. If facebook is a communications medium for what people in my opinion either think they are, or what they want to be (as opposed to what they really are) nothing makes it easier to do that than photos.Take away the photos from facebook and you have nothing.
Facebook is 50% photo sharing (it might rise higher inverse to the ages of the users children) and 50% “witty or inspiring observations/comments”…which of course are often not witty or inspiring.Facebook should be very concerned because of Instagram AND the rise of Tumblr AND the still growing herd of suburban “normals” who are still discovering Twitter. And pile on the fact that Facebook is becoming less of a portal for things like Instagram and Twitter as users continue to flock to smartphones and simply go to the direct platform. Facebook feels stale to me.
Interesting comment. Just remember looking forward that we are moving to a new cycle that pushes into new realm. That realm is where the users will create their own networks. It doesn’t matter so much to them who the company is, but if it works for their needs.That is why I feel it is safe to say that @fredwilson:disqus knows the forward look is more than just trying to take Facebook, but to take Facebook and not be threatened by both the up and comers and soon to be newcomers.Be agile.
It makes Google’s reaction to social even weirder. Their fear/emulation is ill placed.Reference:http://techcrunch.com/2012/…
THERE REASON THEM AGGRESSIVELY MOVING TOWARDS MOBILE.
stale can be a good business. look at Microsoft and Google.
Facebook does not qualify as a “sticky” plumbing technology to run enterprises large and small though. Stale works well from a perceived stability standpoint in that case.Few CIOs have “enterprise facebook installation” on their tech roadmap… ;)I am by no means trotting out the idea that Facebook will fade any time soon, but I do not see, aside from the mammoth user base, what makes it an inevitably successful company for years and years to come…I am on it intermittently, post a few pics, like a few things from acquaintances and have NEVER felt a need to click thru and buy something because I saw an ad on my sidebar. But I am likely the minority.
Facebook was built because of email notification after being tagged in a photo. That’s what made many people return to Facebook in its early days. The same goes for Twitter – still to this day.
Hence the recent upgrades to FB photos. Full screen mode, higher resolution…Related to this is the fact that the once heralded FB mobile app now looks old and creaky and can’t begin to compete with Instagram’s photo workflow.
Agreed. I’m not sure it is the ‘go to’ service quite that broadly and it still has quite a heavy ‘artistic’ culture that many in youth sector don’t care about. But the workflow is great, it is easy to add value to photos and make yourself look more awesome. There are other players but imho Instagram is the class act – they are more than a set of filters. Fb should just buy them. Strong synergy. 🙂
Like I said – FB should just buy them.
that’s wrong fred. i’m no fan, but its dangerous to think of it in those narrow terms. instagrams a photo sharing site.
Just noticed I do much of my sharing via Instagram. It’s how I share pictures to Twitter, and checkins to Foursquare. Google+ get’s all my URL sharing/commenting, with a touch of resharing of photos.So it’s Instagram for photos, and Google+ for URLs. Twitter get’s URLs and Instagram forwarded shares.
Interesting. Case in point: My almost 15 year old daughter closed her facebook account and said she doesn’t miss it. Our last visit to a restaurant together, I checked in on foursquare and she “checked in” on instagram. I see this becoming a pattern for us.
Try checking in on foursquare via instagram – photo check-ins are more interesting, and instagram is such a lovely community.
I’ve bought everyone in my family an iPhone except for me. So I’ll have to stick with plain ol’ 4sq for now.
that’s my life right there. the funny thing is when my kids check into a restaurant on instagram they are using foursquare’s geocodes
And Yahoo used Google for search, oh shit.
Facebook was built on email notifications that you’ve been tagged in a photo.But everyone knows the real killer feature is the ability to “poke”.
It is also behaviorally impossible to not respond back to an email from Disqus that says that someone is talking to you.An engagement ringtone.
Only bad thing about Disqus is that you cannot aggregate addresses in a single folder.
Wondering whether engagio can solve [email protected] ?
Have you tried Engagio, JLM. I’m sending you an invite.
that was my contribution to the original MVP. i asked Daniel to add that feature at YC demo day and he and Jason added it over the weekend. at the time no other comment system had it.
The elegant simplicity of the Apple finger swipe, the Like, the automatic share and now the “pin” — these are all sinuous connective tissue.Connecting things, people, sensory experiences (pictures, video) — into communities.There is something absolutely primordial about these gestures particularly when they do not require any real technical sense, appreciation or experience.I can see the water creatures becoming mammals in front of our eyes.And it is all getting easier and easier.Is this a great time to be alive or what? To be able to see this stuff developing literally in front of your own eyes is just amazing.
Best para ever JLM’sinuous connective tissues”water creatures into mammals’The market thinker and phrase maker in me salutes you!
Do you think there is purchase intent when people want to share? If it was possible to buy the thing they were sharing at the second they shared it – almost facilitating an impulse buy – that people would be more likely to transact? If the payment method was fast and frictionless..
Not sure exactly what you are asking but I do think that immediacy and instant gratification in all things Internet — particularly purchasing is right up there w/ the things I mentioned.I think the ability to use Amazon’s One Click or PayPal is huge.They are the enablers of Internet impulse purchasing.I have 6′ of books on my desk which were spawned by One Click. That slut One Click with her legs akimbo has parted from me many a seed dollar. Drained me truth be known.If it were not so easy, I might have defended my virtue more ably. I, alas, am apparently of the same loose and easy virtue as that slut Lady One Click.It has gotten to the point that a checkbook is becoming almost a charming old school eccentricity.Like guys who drive old cars reliving their wild youth.
EVERYTHING ON INTERNET SHOULD HAVE “BUY” BUTTON NEXT TO IT. #GETONIT
I’m on it FG 🙂
There is no “like” button on @engagio — so here it is MAJOR LIKE.
I’m going to bump it up for end of week/early next. thanks for the nudge.
And can you add a “buy” button?
with a cherry on top?
I agree completely. But that buy best be frictionless.The issue is not adding a transaction loop but adding a wallet that lets you buy seamlessless wherever AND let the brand stay in touch and the referrer part of the string.
We lucked out for sure! Incredible time to be alive. UI is really incredibly important. I just watched the original macintosh keynote in which Steve Jobs described the PC as being a bicycle for the mind. That was with a crappy point and click UI. With multitouch displays, image, speech, and motion recognition, we’re creating teleportation devices for the mind!
The fact that they are ‘low level’ doesn’t mean they are ‘unimportant.’ A huge amount of social interaction is just ‘touching’ someone. The technical term for this escapes me for the moment but it is most social interaction and it is deeply wired into many species.
I meant to say they are lower value to the end-user, vs. engaging in comments/discussion which lets you meet new people.
Disqus would be an example your third way?
They could become that. They have that mojo although I don’t know that is who they want to be.
i hope so
I don’t think a “professional network” needs to be as self-reliant as StockTwits or Zynga. I actually think a professional networking application brings more value by focusing on the curation of the different sub-networks than by focusing on replicating existing infrastructure. (http://meeteor.com/ , a Wharton startup, is a good example.)
this conversation is going to get dangerously abstract…..and it’s already too subjective. i don’t see how twitter is different from facebook regarding their philosophy towards operating as a network. i don’t see how the architecture of the internet is related to this discussion either; in my opinion there is no inherent architecture to the internet, it is all just made up as we go along. the closest there is to a required or implicit architecture of the internet is limitations of spectrum/bandwidth, and so i think any conversation about the supposed, inherent architecture of the internet should start there. another way of looking at it that the dominant paradigm will be the one that most customers/users choose. apple’s approach here is clearly a winner — at least for now. i think in the long run we will see deep vertical integration, all the way from DNS down to computing devices. with AWS, kindle devices, an app store, and a media store, amazon basically already has a full vertically integrated network in place. will it choose to cut off others? i doubt it, or at least i hope not as i don’t think that would be prudent. but will what is created to operate within its network yield a better user experience for amazon users? almost certainly, in my opinion. i view deep vertical integration, like what amazon is positioned to do, as the basis of competition in the governance layer — my term for what comes after the application layer. i believe apps are peaking in value (i.e. although not necessarily price, as who knows how long the bubble will last) and the future belongs to those who create apps designed to work within a vertically integrated network. i also think this type of deep vertical integration characteristic of the governance layer will help us get past obstacles created by domain seizures and spectrum allocation policies. in other words, it helps us get past the dangerous limitations imposed by the nation-state system. as such, the governance layer ushers in the world beyond the nation-state. #cyberutopia #web2012
you are way ahead of me kidwhich is why i follow you so closely
thanks for the compliment! though i think it works better the other way — your experience puts you ahead of me, and so i have to follow you closely
i mean it. you push me to think outside my comfort zone.
well i appreciate the compliment — though as you a few more decades of experience than i do i think you are way ahead of me….which is why i follow you!
I agree this is deep.
“the closest there is to a required or implicit architecture of the internet is limitations of spectrum/bandwidth…”Well said.
“i also think this type of deep vertical integration characteristic of the governance layer will help us get past obstacles created by domain seizures “About as frequent as airplane crashes.
unlike airplane crashes, though, domain seizures are becoming more frequent. but spectrum scarcity is the bigger issue, in my opinion, and i think that problem can be solved with vertically integrated networks. so there are multiple arguments for it, in my opinion.
for now……that is. you think the frequency of seizures will go up or down? i think it will go up until the power structure collapses, until there is some type of significant government reform on a global level. and of course, there is still the spectrum problem…….
is there a way to bookmark comments? i want to bookmark this :)ps. if tumblr allowed me to tag things into groups it would just eradicate my Pinterst account and make things like this way easier to find for myself later – just sayin!
Good idea. They really should have that… it could probably roll out and gain traction pretty damn quickly too. “Post it to Tumblr” around the web could potentially let you tag into groups at point of posting too.
All Disqus comments have unique URLs.
yah but i use pinboard bookmarklet was trying to get it to capture that and couldn’t
Oh yeah, it doesn’t use OpenGraph standards yet I think. That’s why you can’t ‘Instapaper’ it as well.
I understand what you’re saying, and where it is going, though I don’t see vertical networks disseminating very easily into ‘apps.’ Coming to agreements that are fair will be very difficult task, mostly because integrations won’t only help the main interlink but will also help all others interlinked into the ecosystem. Some inclusions / integrations will be much more potent (and therefore more valuable) than others. I guess like all governance it will take internal politics and time..
“governance layer”It’s good to get abstract -> like surreal trippy abstract once in a while. I’d prefer to dip into that mode of thinking more often, but my work doesn’t allow it. Gotta stay grounded and follow all the code paths, know all the program architectures, and stay fresh with latest patterns to manage complexity.
But don’t you got to get abstract to get that rooted layer to go in the right direction? Or, does most of your business decisions come from what the code tells you to do, or lets you do?
Let me draw up a universal stack:App <– Used directly by end usersPlatform <– Gives 3rd parties features, users, and monetization potentialOS <– Low level software that makes high level software feasibleInfrastructure <– HardwareiOS and Android are both operating systems and platforms.AWS includes infrastructure and an operating system.Facebook and Twitter are both platforms and [email protected]:disqus when you talk about networks, you have to specify at which layer the network operates. TCP/IP/DNS operates at the operating system layer. Twitter and Facebook are networks at the platform and app layer. I would imagine that the professional network you are referring to (built on top of Facebook) is only a network at the app layer. If any user could create their own professional network using that service in order to get additional eyeballs and potentially make money, that network would then be operating at the platform level! I think this is what you’re trying to get [email protected]:disqus Amazon can do this deep vertical integration because they already have the infrastructure and operating system layers covered which are the hardest to build out. There is only room in the market for a few of these companies. People seem to think that smartphones and tablets are the end all be all for hardware but that’s not the case. We’re in the post-PC era and we are going to see more hardware come out for particular applications. Companies that create this hardware can choose to create their own operating systems and platforms but in many cases it will make sense to use existing offerings. So in the technical sense of the term I don’t think vertical is huge.From a business perspective, there will be many situations for which having a “vertical solution” where all aspects of the user’s needs are met by a single solution provider will prove to be important. When choice and flexibility (a la Microsoft) is important, open platforms will win. When having something “just work” (a la Apple) is important, vertical solutions will dominate. We’ve been fixated on platforms since the iPhone came out but there are many situations for which vertical is the right answer and we will se that play out in the next few years.
What do you think of Microsoft in the cloud doing something like Amazon? I just started working for them, so I have an interest and a curiosity in what you say. Wrong tree?
Are you familiar with Azure? That’s Microsoft’s attempt at AWS. They’re trying hard but I don’t get the sense that they’re gaining much traction.
I am familiar, actually. As it happens, I am the new Developer Evangelist for their Global program. They seem to be doing well in gaining traction. They have nearly 50,000 startups in the cloud, hosted by BizSpark (three years of free Azure use). And they have hundreds of partners, like DEMO and Tech Stars. I think Microsoft is going to make this thing grow big.
I saw that they partnered with TechStars and thought that was a good move! I’m really not antiMS.. I’m actually really excited about Windows 8. But in cloud they’re just so far behind. So as an evangelist, tell me why Azure’s better than AWS.
I am familiar. I am the new developer evangelist for the global program. They are gaining traction. 50,000 startups on the Azure sysytem. Partnerships with hundreds of orgs, like Tech Stars and DEMO. I can tell you more about it. Let me know. Douglas CretsCEO, dB C MediaNew York, New YorkHong Kong, China+1.917.499.1993
great comment! the vertical debate is a question of degree, and governance; i really dislike apple’s approach, as i view it as deceptive and expensive, but i love amazon’s approach. so there is a huge qualitative element here, which is why i favor the comparison to government rather than anything else. i’m not sure that there is only room for a few. amazon could move quickly because it forked android. someone else can fork android too, grab a whole bunch of apps and make it easy to port them over to the new forked version, focus on creating mesh networks……it’s not an easy task, there’s no doubt about that, but i don’t think you have to be a $100bn juggernaut to get it done. i think the cost is rapidly falling, because these vertically integrated networks will be able to build upon the work that they are all doing — just like how amzn built kindle off google’s android.and precisely because there are more devices coming, because we are entering a world with more and more devices and each person having multiple devices, i think that sets the stage for more and more vertically integrated network — as each device will be designed for a specific use case and thus will benefit from being a part of a network specifically designed for this use case.
Sorry… too many Amazons. I agree anybody can build a Kindle Fire. The hard part there was negotiating contracts with content providers which they did long ago. And yes, the fact they have AWS to serve up content makes their offering very cost effective.When I said there will only be room for a few Amazons, I was referring to AWS. The hardware + ops + software + API adoption required is extremely capital intensive. Microsoft, Google, Apple, Amazon, HP, Facebook, and possibly Salesforce will have this but my guess is that few others will. I think that only companies with market caps of $100B+ and business models that heavily depend on infrastructure will end up investing in building IaaS or similarly foundational platforms.
it won’t have to be built from the ground up like AWS was….someone can build it on top of an existing provider, i.e. rackspace or maybe even inside AWS. what’s important is not who built it but who controls vertical integration. if rackspace, amazon, google, or whoever gives a customer the freedom they need to run their own cloud, then cost becomes low. just like how cost is low to create devices if you use android as your base and fork it.
I think we’re saying the same thing. Obviously if you’re using AWS or Rackspace for infrastructure you’re not truly vertical in the engineering sense of the word but if the point is that a company can create hardware for the user and the back end services (over the web) to support it than you’re absolutely right. That’s exactly what we’re doing. My company is developing restaurant technology. We’re building remote hosting for the restaurant’s data (on top of AWS) as well as the POS devices (custom hardware + Linux + custom software). In this sense you could view our POS device as being a kindle fire for restaurants – we run the entire solution end to end.
lol okay yes we are saying the same thing! your business sounds fantastic, restaurants is an especially ideal segment for this to play out in my opinion.
hit me up if you want to chat some more about what we’re doing – [email protected].
Vertically integrated networks don’t cut off others per se, but they do subsume the very best of the others.
or is it an an overlay network you are describing.
Good point: As I understand it, a lot of Internet, internet protocol (IP), long haul, backbone links are ATM networks: Since ATM was designed first for voice phone calls, it has sessions although IP does not. Also ATM has its own error recovery, and IP does not. And ATM is for its part of the network doing its version of routing without involvement of the IP routing. As I recall, some, maybe most or all, of the undersea optical fiber links are ATM.I’m rusty on this stuff but once knew something about the details because for a while was working on IP network design optimization.Remembering that, also much of the core of the Internet is not IP but MPLS (multiprotocol lable switching) with BGP (border gateway protocol) between MPLS networks. The difference is the routing: MPLS is for routing just among, say, a few dozen core nodes, instead of all of the Internet, and does its routing logic very quickly as needed by the data rates in the Internet core.If we look around, we can likely find other examples of overlay networks involved with the Internet.But we’re talking lower levels of the usual hardware communications engineering ISO/OSI seven layer communications stack which may be a bit irrelevant to Fred’s post here. That is, Fred may have been talking about networks such a Facebook with the Internet just a lower level given with ATM, MPLS, BGP, etc. just irrelevant.It seems to me that, generally, we can, do, and will have, exploiting the Internet, networks on networks. A large reason is just that individuals and groups interact and, thus, form networks, social, business, or whatever. Another reason is, once Web sites/services publish APIs that use the Internet, we’re on the way to networks of networks. E.g., there is Verisign. Some ideas for e-mail enhancement depend on APIs for third party services. And of course, we have ad networks complete with various browser cookies, third party cookies, IP address tracking, etc.There is, use the voice phone network to discuss politics and say, “I didn’t see that piece; can you send me a link?” when the network of people who know the e-mail addresses of others is used to send the link which is a DNS level address in the Internet with likely also a Web page address within the network of the Web site. The Web site may be in a large server farm where there is a network of servers that provides HTTP session affinity.
What if you see other networks as your “distribution channel”? Disqus is a bit like that? Early startups definitely need to leverage the strong network effect all those big platforms (or networks) have got, right?
use them for distribution but not for core network functionality
Maybe an appropriate analogy is, well, the internet. It being originally designed to be a network of networks that can withstand a nuclear attack. The networks (and therefore businesses) that can withstand a nuke from Facebook, Twitter, whatever, are the ones that will survive and thrive.
I agree with Michael’s analogy. So really we are just trying to make sense of meaning at different levels of abstraction. Some one in Facebook behaves differently from someone using a higher network.There may not be any useful meaning to it.It would be interesting to see which levels provide value and which captures value. Ultimately this is what means anything if we are looking for profitable models.This is dynamic of course! It would be interesting to find out if/when Facebook goes on a vertical acquisition strategy (since they will have all that money).
Facebook and Twitter are pure social nets and starting to believe that @markslater:disqus may be right that sharing, as it happens today, has become commoditized on both.Not certain that either one can really support independent communities or networks. Quite certain that I would never build one on top of either one. To me, commerce is the missing link and Facebook especially, seems commerce and storefront incompatible.
You just reminded me of a comment I made awhile ago on AVC, where I made the analogy of oceans, rivers, streams, etc.. where I think I mentioned oceans are like Twitter / Facebook, a pool of all links / info, oy.. I’m not going to remember it repeat it right now.I wonder if there’s easy search through past comments on Disqus’ main website / my profile?
you mean a tool that would let you see, by date/time/place what you/a friend said/shared on a network/an app?
Hm, I was thinking just a way for me to search past comments I made on AVC for certain keywords .. Perhaps Engagio has that? I will look later today
My team & I have solved the problem of Facebook and Twitter commerce. We are building it right now and should be ready for launch 1st June and it’s not a ‘store front’ solution or a fan page solution.Imagine if you can extend the dynamics of the social graph to commerce. The virility of the share, the re-tweet and the like – with instant and frictionless purchasing 🙂
The most widely used network of networks is probably email. It may not seem intuitive at first, but truth is, my corporate email is a network and it interoperates with other email networks so that we can all communicate. We take this for granted because it’s widely used and understood. But it’s fundamental premise for interoperability is that it’s all based on a standard. So I’d venture to say that the proliferation of networks of networks is highly dependent upon finding standards. Where standards don’t exist, APIs seem to do the trick.
Are you fishing for Likes? (’cause I just liked this comment…and yeah, it only took me a sec)
Let’s be careful of the HYPE of networks on top of networks. I’m reminded of the year 2000 when “e-markets” were the rage, and they made PERFECT SENSE in theory, but about 250 of them collapsed after 1-2 years of trying. What they underestimated is that User Transition to these e-markets wasn’t going to happens as naturally as they thought. Social networks like communities have to have a natural built-in incentive for their users to engage in them. You can’t create a Community if the community members don’t want one, or if they need to resort to un-natural acts to be in them.
Agreed. The hype is what investors need to be careful of, and perhaps overzealous entrepreneurs who haven’t thought deeply yet into all of the network effects at play.Indeed, the built-in incentive must have value-added services/tools which then would allow those to exist on their own – as that is the main draw.If you try to force anything, you’ll be hitting friction along the way which just will make life hell, and in business, expensive.
As this thread and more generally many threads on this blog and more have clearly shown, it was difficult to understand why something like Facebook, Twitter, Tumblr, Flickr, FourSquare, Pinterest, Linkedin, Yahoo groups, etc. would work. So, when they do work, people eventually come up with some reasons. A part that is curious and challenging is being able to analyze accurately beforehand when such a Web site or service will work. It appears that even for the successes few, sometimes no, people understood just why beforehand.From my wife’s Ph.D. in essentially mathematical sociology that tried to have a science of groups of people and from more, understanding social behavior can be challenging.To explain the popular social Web sites, I just return to some of what has long been known about people: They like to be members of groups. There they like praise, acceptance, and approval. My guess is that young women are especially attracted to such sites much like they are attracted to gossip and cell phones for gossip. What successful social Web site needs something different to explain its success?Not everything successful on the Internet is essentially social. E.g., Google search and Amazon shopping are not very social.To do something new in a social Web site, maybe one way to get started without facing the challenge of first getting a network effect across the world would be to start in niches. One niche is professional fields. So, could have a social network of violinists, mural painters, cabinet makers, etc. Another niche is geographically local: So, have a social network that is especially attractive for some people in one geographic area where, e.g., they also see each other in person. So have a social network of people in one town learning to cook, say Italian food and who meet once a month for cooking lessons and demonstrations. Then when successful in Peoria, expand to Urbana, etc. When successful in Sandusky, expand to Toledo, etc. Then have a network of local networks of people interested in learning Italian cooking. Chinese, French cooking? Have pot luck dinners with dishes from Vienna, Paris, Marsaille, Florence, Naples, or even BBQ from Austin, Memphis, Kansas City, etc.! Use the Web site so that a team working on Sacher Torte can do well against the team working on Dobos Torte, the team working on Sauerbraten can do well against the team working on Wienerschnitzel!But social is not all there is to life, Web sites, or the Internet. Also important are information, business, etc.
my day job
The interoperating you speak of is related to the de-centralizing that is occurring / will occur.The giants who are trying to have a controlled-closed ecosystem aren’t needed, and they are damaging / cause friction to these synergistically connected relationships of only the ‘best networks’ working together.I know I’ve talked about this before in my reply to The Independent Web – http://mattamyers.tumblr.co… – though it’s not changed much – just becoming more apparent, to me at least, that it is indeed evolving this way. It might be 5-10 years from now before you really see this happening, and where the cross-promoting / cross-linking / large strategic partnerships come to fruition, though they will happen.There really only needs to be one service / network / platform for each low level function / behaviour, and there will be a few great options but then the following play that will occur will squeeze out the competitors merely by touching on every important metric to a finer degree (ease of flow and branding being the main ones IMHO).In response to “a network on top of a network” it would really depend on where that network derives its value. Does it exist simply because it’s “1-click” from Facebook or does it hold more value than that? Is it more of a fad thing, where users just do it because it’s only 1-click away to “be apart of it” or are they the users who genuinely find value in the service/tool?Okay, back to the present reality — off to the laundrymat to put my clothes from wash to the dryer. 😛
In your definition – is Pinterest (a sharing network) a network built on top of other networks (content networks)?
How are the content sites “networks”?
Why not? (happy to hear) Ask people who use Pinterest / SoundCloud/ Vimeo and they will tell you they are a community. Any well executed content site can have a community. In my def if enough communication and sharing mechanisms are in place and members of a community actually use them – hurray! it sounds like we have a network.
They CAN have a community, but few content sites do. Sticking a share link on your content to someone else’s network builds their network, not yours. Yes Pinterest is a community (mostly pirated by spamming Facebook followers IMHO, how would I get 100+ interest followers with my single pin otherwise)).
Your pin was just that good.
content is rarely a network
“really” or “rarely”?think of blogs. they are ongoing conversations with connections to each other via links.the content is the node of the graph and the link is the edge.
rarelyi’m thinking traditional contentnot blog content
most everything is content. if it’s linked together in a meaningful way–it has semantics–it becomes networked.
well, not the content itself. Each content represents something someone did (content creators). And many times a collaborative effort of multiple people. People, offline/online context, communication and sharing tools and purpose => networks?On a side note – is Twitter a network? (yes, that’s a serious question 😉
i think yes. and i did the day we invested in it. i still do.
This is an important distinction to have made.
Hi Fred…it’s nice to be mentioned in the same post as Twitter and Facebook and Zynga. Our community will be thrilled. One day I will write about this process more as we think about the loop of it all and hooks, and timing of the moves. I think it is almost impossible to completely live on another network long-term so at some point you need to make a move and invest.I don’t believe every network should be or needs to be open so networks of networks just make curation harder and some data worse (if you care about the data set).I am likely too close to this stuff for the most part. Today I think every ‘social and ‘community’ idea starts on wither Twitter or Facebook and slowly moves off and creeps a little towards the other network until it finds the right balance of broadcasting, sharing and ommunity features for it’s platform/network.
i don’t see it that way. some of our most recent investments, like soundcloud, codecademy, etc started on their own domain and while they get some distribution on facebook and twitter, the vast majority of their users and traffic is direct
Not sure what we are disagreeing on as Stocktwits.com was always a focus …it was the $ we flet was needed to unite the networks. The vast majority of messages now live on Stocktwits.com and it’s apps. They do get pushed to Twitter and Facebook if the user wants. What most people dont understand is that from day 1 using the $ and human curation and some technology around some basic rules (slowly evolving too), allowed our content to be piped to the big financial portals in a content for new user coexistence…as we think people want to read content wherever they are already living. Let them come and go but offer a value proposition for them to share most on your platform.
i think the $ tag on twitter was one of your most inspired moves. maybe your most inspired move. pure genius.
Thanks Fred…$ was most likely the triple brainchild teamwork of Sorwn and our CTO from the beginning @genevate:disqus and I who really thought about how to capture the language and cross platform possibilities.I think the extra interesting iteration was when I dm’d you $TWIT and $FBOOK for private tickers and you said immediately that would work. I think every iprivate company could be tagged like this and we nailed $GRPN and $ZNGA well before they had chosen their symbols….lots we could do here ….if I only had time.
I tend to agree but you can do interesting market research building on top of another network.
What if it’s tangential not on top of.
Two interesting variations on the theme to consider…Disqus: a de facto network of networks that I hope and pray will do more to expose and develop that aspect of the service.Tumblr: can be considered a monolithic “network,” but it functions more like a permeable network of networks. (Much more so than Twitter, in my view.)
i agree that disqus needs to do more to expose the network. and i think they will.
The new disqus beta is a great start. (It’s a very good beta, all things considered).
Very good start imho, loving it! They have surfaced in-network discovery quite well.
+1 to Albert when he says that we’re better off in a world with a proliferation of networks for sharing different things w/ different people. On top of that there should be hassle-free cross-network synchronization / global meta tagging mechanisms for the things you want to group and display to yet another audience/network. Not only should they interoperate but it should be possible to mix in all kinds of related content in there.(Wish me luck with my YC application this Thu 😉
Thanks! Removed it cause my team tells me it’s bad luck! But you were faster! I guess it’s not about luck anyway 😉
How is building a network on top of a network any different then the old model of building a platform on top of another platform? Or put your way, Fred, is it a platform if it is built on top of another platform? If the analogy is correct (and I am not saying it is or it isn’t) then we have a long history of platforms being built on top of platforms that should lend guidance.
most platforms are built on top of multiple platforms
I can only think of examples of platforms built on top of operating systems. I guess the web is a platform built on top of the operating system, which is a platform and of course any platforms built on the web are platforms on platforms on platforms. I was thinking of platforms on OSes.
i think of OSes as platforms to build things on
Most importantly in this post I strongly believe Albert is right. I share some of my market ideas on Facebook, but that is lazy of me. I have some friends who live on it and know they like this but for 99 percent of my few hundred friends it is noise. I dont care that much because I dont use facebook so that is a problem for Facebook to clean up,,,,I am a lazy sharer.At Stocktwits we think about all the reasons one would want to use and share on our platforms….some reasons include the extra reach, analytics, and compliance features that go with financial publishing and we are hypothesizing many others. I do think people want this financial information back at them in timelines and plotted with price and other people’s comments so that they can benefit from their journals in a focused way. BECOME BETTER INVESTORS. Vertical networks have value props they have to live by the day.
Definitely. Twitter or Facebook help you graft the initial users from them into your network, but you have to continue providing your own, organic value inside your network.
cool comment Howard ..cool to get that bit of insight into how you guys think about your feature set and value to customers
I agree with the networks of networks thesis – not because of any well-developed theory of the infrastructure of the internet, but because this is how “real life” works. That’s always the theoretical framework I go back to. Not to be too facile about it…but think about it in this context. You go to college – perhaps a state school – and there are thousands and thousands of undergraduates. This is the initial network. In some sense – even if very loosely developed – you will always be connected to this network. But then networks emerge within the network – student groups, athletic teams, fraternities, etc. These are their own networks. But they contribute to and inherently make up the broader network (i.e. the college). they are interoperable, dependent, and mutually beneficial to each other. We are simply organizing ourselves on the web/mobile the way we have been in real life for thousands of years.
I think this is right. The internet has made it easier to create and connect my network of networks, and their subnetworks. LinkedIn is the digital rolodex. For me, Facebook is my interactive phone book. Remember those A – Z leather-bound planners that always had scraps of paper shoved in and could barely close, like George Costanza’s wallet? That’s the utility of Facebook. I don’t have to remember email addresses or phone numbers for anyone in my various networks (work, family, friends, college, etc).
Zack: Your example brings up an interesting point in the discussion. If you build the network on the same platform, it is a network of networks (like Google Circles). However, if you build that same network (group of nodes of students) on a different platform, is that a “network ON a network”?Perhaps the question that is distinctive on whether could the second network splice completely? Not in the way the nodes are “real life” related but in how they are technically bound. I think it is because of this, it makes Freds point. You really cannot build long term a network ON a network.
The best examples bring unique value to a niche.They don’t care which networks they work with, how many are in the room, who’s on top, who’s in the middle or who’s on the bottom.
yes exactly….stocks and markets is all we care about…as Fred said early….for proplr that love stocks and like talking about them all day long…
Yes we built mytrade closed with little “other-network” interaction. You built stocktwits open with lots of layering. Both work very well and have their pros and cons, but that’s noise to us as we just want our users getting best experience possible given our trajectories. More than one way to skin a cat but the common denominator is niche.
i would not call us open….but yes layered. The big value prop for many a financial contributor is to be HEARD so the layers matter. We are slowly and cautiously opening more and more.
You just want to be the core value-added service to your target users in this network-orgy..
That’s how you get invited back.
Don’t think of it as networks on top of networks, and networks of networks, the correct metaphor is the existing one: layers. Social is an additional abstraction layer on top of OSI. That is, it is the fabric of anything built on top of them. Most successful networks have built upon the previous infrastructure, and pieces of those older systems often become integrated parts of their backbone. They may or may not get swapped out over time. Take fiber, for example, over copper. Or the fact that qwest ran fiber along railways.
I don’t fully like the visual of layers for things like niche community vs. general public/community. I agree layers work for infrastructure, though I don’t see Facebook or Twitter specifically being infrastructure – they are supporting low level functions, and they do have a mass of traffic – but I don’t think that makes them a foundational structure.Awhile ago I wrote an analogy that’s more in-line with how geography works with oceans, rivers, streams, ponds, etc.. and how the different information flows relate to each one. I have to find that comment and will add it to a longer blog post I’m going to be posting to my blog, hopefully soon.
I like the idea of layers here, Daryn.Seems to me the initial wave of the web was primarily about building the infrastructure layer, powering the network to exist in the first place. The Web 2.0 era spawned services that users could join to express themselves & identify connections in their lives – to other individuals + interests. In many ways it feels like this was a metadata layer that’s enabling a new phase, where all this information floating around is now being leveraged by new services (on top of the “old ones”). This is why Fred’s point about interoperability is a key one – it’s helping startups create new models and grow faster and stronger than ever before, based upon the existing social framework that exists.
is iOS a layer?
You mean iOS like the operating system? Not a layer per se in the traditional model. It just contains plumbing.If you aren’t familiar with the OSI model, it’s basically categorizes the function of different pieces of a communication system into abstraction layers. It’s something they teach in networking classes, or at least used to back in my day. I’ve always found it a good analogy for all sorts of complex systems.http://en.m.wikipedia.org/w…
yes, but i mean specifically the apple mobile OS
Isn’t it a layer? Like everything else that you need to get through to get the only goal we all have – Users.If I build a FB App, as a dev, I think of the pros/cons of FB pretty much like I am thinking of iOS right now (as I build a native app).
As someone in the business of advising companies dealing with this and other tech biz model issues, my firm’s thinking comes down to the idea that “nobody wants to join you on your island”. No matter how great, tricked-out, awesome, exclusive even. Your island app/site/network/community will pale and fail unless it’s closely connected to the rest of the world (LinkedIn, FB, Twitter, etc. etc.)
All ‘first generation’ social networks on the web piggyback on top of email. Your inbox is your most intimate social network.Twitter and facebook provide another layer on top of this. So really we’re seeing 3 tiered networks: email -> facebook/twitter -> stocktwits, foursquare, etc.
Email connects the dots in social design but in itself is not social. Nor dynamic.Maybe we are defining social differently.
Interesting comment on building networks on top of other networks. I am using a large number of APIs for a recent project and I’ve been thinking about this very question.An API (application programming interface) allows a developer to “hook” into data provided by another service. The foursquare API gives you a list of venues and checkins, and the Facebook API gives you a list of friends.A major shift in the last five or so years of web development is the near ubiquity of APIs that allow developers to build on top of other platforms. Every major social network that I can think of has an API as a core part of its strategy.APIs are popular among developers because you can both tap into a pre-existing user base and fill your app with content quickly. Almost every “build an app in a weekend” hackathon relies heavily on the use of APIs, because they allow a developer to “fake” an app in a short amount of time.But I wonder if all of these little apps aren’t giving away the farm as it were by relying too heavily on APIs to power their existence.Paul Graham wrote a _fantastic_ article called “Schlep Blindness” http://paulgraham.com/schle… that I feel is related. It’s worth a read but to summarize, the real value in a startup is built by the schlep (i.e. the difficult, boring, time consuming work that no wants to do). Filling a database full of useful information, whether it’s a social graph, venue information, hotel reviews, or photographs, is a huge amount of work. It’s so much easier to borrow someone else’s data.By building on top of other networks, you can feel like you’ve gotten somewhere quickly, but you’re avoiding the schlep and ultimately limiting your value. You have to pick an area where you are actually building something unique of your own.
What we have today are not networks but rather exchanges. The role of an exchange is to provide liquidity of content, liquidity of content creators and content takers. When you have all three and you keep transaction costs low, you offer value.Broadcast networks are one to manyThe physical network is the http architecture.
Aren’t the Comcasts and DirecTVs of the world an example of building a Network (think: ESPN, HBO, TNT, AMC, Bravo) on top of another network (i.e., Comcast, DirecTV)? While we may think of that model as ripe for disruption, it works as well as it does because both sides are extracting value, and for the best players, there is serious leverage.Arguably, Facebook’s best strategy is to play a similar hand, and segment over time between the public channels, the premium channels and the proprietary channels.
This is an area I’ve been keenly observing for a while. Old-school businesses seem to not understand where the line is between bootstrapping off a large network, and giving control of your business over to that network. I think about publishers on Facebook, in particular. The process seems to have been: publisher gets some social sharing at time they’re losing eyeballs and revenue. Publisher does more to actively promote social sharing. Facebook launches Open Graph. Publisher marks up all their content as Facebook social objects to get more sharing. Facebook enables custom edges. Publisher starts capturing custom edge data – on Facebook – now to also maximize ad dollars (from better targeting) as well as gain sharing.So far so good, but then Facebook and publishers interests significantly diverge. Facebook ramps down the ‘free’ social sharing in the cause of reducing newsfeed spam. So publishers suddenly get less benefit from their integration than they anticipated. Don’t worry, says Facebook, we now have sponsored stories where your sharing can get promoted to users. Publishers now have to pay to get the sharing they originally anticipated getting free. In turn they’ve also built their business on storing their key graph data inside Facebook, with the hope that Facebook won’t increase the tax for getting this data out again, over time. That’s just a Facebook example, but I think the point is valid more generally too. If you build on top of a platform you must do so in a way that doesn’t bind you to that platform. tl;dr:Agreed. Networks on top of networks aren’t networks in themselves, and they are businesses at the mercy of the underlying platform.
integrate all the thingsopen api: ask all sharing things to share with yoursa browser of browser; an app of appsit talks to all networks and plugs into all of them but is ultimately agnostic
Facebook is a network, but it is a customization – a network of friends. Zynga is an application on top of the same friend network. So anybody who wants to build other customized networks would be better off starting from the internet.
I not only think it’s possible for networks to live on other networks, I think it’ll be the norm as the layers grow richer and deeper.Facebook lives on the web (http as an app layer/protocol) , and the web lives on TCP/IP aka the internet. There’s certainly a huge risk of existing on the top most or newest network, but as a business matures, survives, and thrives it naturally sinks down into the layers and digs deep wells for it’s foundations.
Hi Fred, well — your question certainly sent me down an unexpected road from when I first hit tweet.At first the broadcaster in me thought ok if they aren’t networks how about “channel?” Then I began to picture how Jane Jacob described “emergence” in nature of economies. So how about “emergent” somethings? But really I decided, let the majority label them (and I will make a point of re-reading the comment stream as I bet they already have!)Of more importance to me though was your point “but they have made the necessary investments to operate their businesses in such a way that they are not entirely dependent on other [specific] networks.”This morning when I first read the article I was immediately concerned services like Identified & Branchout were going to force me to change how I use Facebook. I have worked incredibly hard to keep FB as my personal friend & family service (photo sharing etc.) Was I now going to have to mix it with my larger professional networks? I encoutered this recently when I tested Highlight… it took a lot of effort to hit allow and provide them with access to my FB profile. I still feel bad about doing it. I would have much preferred to use Twitter, or LinkedIN. So I too agree with you, build your (networks) to operate on the Internet, make them interoperate with each other and share traffic/distribution. But I’d add, please offer flexibility to the user and let them choose the on-ramp.Thanks Fred!Jon
Some of the most scalable businesses are network of networks – exchanges and similar connecting tissue entities in online advertising, derivative markets on Wall Street, the Kayak types companies in online travel… I wonder which is next…
I’d say, yes, it is still a network.I’m preaching to the choir here, I know, but a network is some interaction whose value to users grows either as more of the same types of users join (Facebook, the telephone network, the internet, etc.) or as two types of users that want to interact with users join (job sites, eBay, clubs/bars.So I believe USV’s investment thesis is, rightfully, based on the immense value created for everyone when this happens well. But networks aren’t valuable as investments, I’d argue, in themself. Craigslist gave away a great deal of value. Wikipedia is valuable but non-profit. Google exploded. Facebook exploded. Both were built on top of the network that is the internet, though. You could argue that the internet was an open source, organic network so private companies that created proprietary, uniquely-valuable networks then profited. But Facebook is a closed system that captures our social graph so it’s capturing a lot of that value. Yet, in a different world (or perhaps a future world), our social information could be standardized and open so that anyone can capture it. (In fact, this debate is taking place now with Google on one side in allowing people to export their social information and Facebook on the other in not allowing it.) In that world, the next level of networks built on top of that mode of interaction would capture value–by, say, offering some compelling, sticky, difficult-to-replicate interaction on top of that data. Maybe better segmenting of friends based on big data analytics assessing all of your interactions to figure out who really are friends with and even who you SHOULD be friends with. In any case, I think networks are constantly evolving, and I’d argue that there are very few networks that aren’t built on other networks. Rather, it’s just a question of defending those networks or understanding how they’ll become standardized and eventually opened.
I disagree with your answer Fred. By defnition, a Network built on top of another Network is a Network. The right question would be about the ownership of such Network and the levels of freedom to operate it, including its potential migration, aka being your own bitch. As long as you dive deeper in the Web, the level of freedom decreases: the Web, OS (android, Ios….), Large Platforms (Fbook, Twitter,..), … and there is no problem attached to it. The problem starts when some players start playing evil.
Everyone who achieves success in a great venture, solved each problem as they came to it. They helped themselves. And they were helped through powers known and unknown to them at the time they set out on their voyage
Fred,I think you are thinking in the right direction and I agree with you that as networks grow, a more structured way to do this would be to abstract certain elements of it, make it a commodity and build the rest.But, the web, being what it is, and with several efforts – including the scripting of Internet 2.0, makes the web and its viral growth (not in the crazy way its depicted these days, but in its primitive form of growing the way it wants to) its both its advantage and its deficit.But to answer your question, I believe networks can be built on top of other networks, as long as there is an abstraction layer in between. Even the web that we talk about is built on top of telecom operators who once had a network of telephone numbers. So once the language spoken on the network shifts, and the network is able to carve out its niche and usefulness – as you rightly pointed the case of stocktwits and zynga, it can be done.The interesting bit is that, despite how ISPs are looked at, they played the game very liberally. The New age platforms, like facebook – or even be it Linkedin (who has a history of curbing APIs) wont be so liberally and will squish new networks, unless it grows very fast before they can get to it.
i agree if you add the abstraction layer
Building your network on top of someone else’s is a smart short term play. If you want to disrupt markets, at some point you have to be the master of your own destiny and not let anyone else’s agenda get in your way.
“I asked if it is a network if it is built on top of another network. I think in that case, the answer is no.Good question.I don’t pretend to have a definitive answer on this but I think I kinda disagree. 🙂 All networks are based on an interest graph. The social graph is just one interest graph. Facebook’s interest and hence focus is the social graph.So the questions become: (a) can you build a social network on top of FB’s social network? Probably not because FB has many of the key social elements wired and they can shut you down but…(b) can you build a different interest graph network on top of FB? Possibly. In just the same way the sites focused on an interest try to build community of like minded users, why would it be impossible for such a group to be built over FB? IMHO it isn’t a great idea because the social graph functions of FB are likely to get in the way more than add value just as too much ‘community’ gets in the way of interest related content on interest graph sites. But I don’t see why it is impossible and I think it is very much in FB’s interest to have thriving interest graph networks on its platform. All good data the better to target users.
The network of network idea is interesting. Yes, I agree Twitter is in an interesting position, but I’m just not sure that it is in being sort of an “exhaust” of all these networks. That is a good role that it plays right now, but if the way we interact with twitter now is any indication, I don’t think it shows that this idea that Twitter will end up with the “highest quality stuff,” but rather, that Twitter ends up with EVERYTHING, and people don’t seem to be filtering what goes to twitter much. It seems to be a way of pushing out awareness of your presence on other networks to your friends/followers.When we think about what makes for a healthy network, it’s all about creating weak ties between different networks/communities/cliques. So, how do we create channels for the best content to flow from network to network? Right now, the way this is being done is one app building a link to one particular other network – “Post to Facebook,” “Post to Twitter,” “Post to Instagram.” But what if there were ways for someone to standardize these connections? When I snap something on Instagram, shouldn’t I then be able to chose to share the same shot on Pinterest, Tumblr, Flickr, Facebook, or Tumblr? Be able to push content I find anywhere into my Readability account (right now, most apps support Readability, Instapaper, or Read it Later, but hardly ever all three, which is fine when I’m on my computer, but horrible when I’m on my phone. And what about a niche network – say, I use Gimmebar to save design stuff or items I like, why shouldn’t that also be shared Patterntap or my Pinterest collection or… Whatever else? I’d love this, and then there becomes a really interesting opportunity to start using the web the way we want, use different tools the way we actually want to…
I would argue a lot depends on the type of network the “sub” network is built upon. At the end of the day, a network is just a collection of people who want to be connected—usually because of similar interests or goals. The underlying technology shouldn’t define whether or not it is considered a network.Do you not believe Stocktwits and Zynga were networks before they pivoted their technology to their own platforms? While it may not be the ideal situation to bootstrap on top of another platform, you can still build another network on top. I believe a network exists when there is an active community of returning users.
build an awesome service. create your own network.
ROAD IS STILL ROAD, EVEN IF HAVE ONRAMP TO HIGHWAY.1ST NETWORK FEED 2ND. NOT MAKE IT NOT NETWORK.
It was the first thing I thought when Facebook launched Timeline. Any time you can segment, pitch to another audience your content, or even derive content out of interaction, you have a new network. People are network hubs, and Facebook, in one example, is a multi-level traffic system that makes people remote controls for their networks.
The biggest network of all, and the network upon which all these networks have been built is email. Let’s not forget or underestimate the importance, reach and immediacy of email.
Building an app on Facebook is different, too, than e.g. pulling in Facebook data via Connect to let you find friends who are using a service (and see how they’re using it). Weaving Facebook, Twitter, and other 3rd-party relationship graphs into your product can immediately increase the density of your network, which matters. The short-term effects can be profound.That said, experiences built with those two networks-via-API are being commoditized pretty quickly. Unique networks – the relationships between people, places, things and behaviors that you build on your service and aren’t easily replicated by others – are significantly more valuable. We’re all after unique networks; the FB + Twitter graphs are ways to bootstrap your way there and add some complementary value.Distribution is distinct: it’s a way to either make your network larger (more users) or denser (repeat engagement creates more connections between nodes in the graph).
yup. totally agree Luke.
Interesting…this post made me think about the various networks I belong to. And I’ve realized that I behave slightly differently on each one. Sure it’s a matter of context and dynamic. But I’m not so sure that I’d like them to be blended. I fear the swamp water effect….for what its worth.
Has me wondering about the longevity of platforms as well, and some businesses over reliance on them. Should we be utilizing platforms and networks to “get to scale” and “test ideas” but ultimately plan on having a ‘path to network’?
If it is a network on/within another network then there is a dependency – not necessarily desirable when what was the (sub) network gets to a critical mass where it no longer needs the parent/hierarchy – or its constraints.Thanks for the fish. Independence is good.
Most networks aren’t alike. Any new ‘network’ needs to be able to pick & choose which networks they participate in and contribute to. Access to Users via incumbents matters. What sets aparts winners from the rest is what they do After they get that access.Zynga generated $$$ for FB & social experiences for its 800 million users. Stocktwits created a zero-cost alternative to Bloomberg, in your daily news stream.If a startup imagines life as a zero sum game, they might as well die today.
Nice post – and interesting point about the difference between leveraging other networks vs. aggregating them. One salient example of leveraging other networks that I don’t think has been mentioned is the way a number of successful two sided market businesses (most people know who are they are) have filled in hard to acquire parts of there own networks initially by scraping or posting to craigslist.
like AirBnB did
Information (i.e networks) are beyond the singular ability to control indefinitely. The natural tendency throughout the history of the world is push pull into and out of vertical silos of information. The stronger and more compact the vertical silo the more likely it becomes that the information gained inside results in external competition and possibly self destructive information will escape. So while scribes wanted to pull of their information into their network (information silo near monopoly), people demanded more information than could be produced (causing self destructive information to be released), along came books which wanted to create its on information network (vertical silo, too) but people wanted more so eventually leaflets (faster printing and its on little mini network) turned into small monopoly regional newspapers (vertical information silo/network) which was not enough so radio came along to build (another network AM/FM which wanted to keep all the information), to TV, to Cable, universities sharing information electronically, to the browser, to napster, to Amazon, to Apple, to Google, to Facebook. All of these are networks and most got their start from the network before.So my point is there is not a network that can or will be created which can contain the information that is learned within. This causes the very natural progress towards creating another network. So you think Facebook has won- you have lost. Just as MZ explained in some of his IM’s “it’s like Friendster” the seed of the eventual destruction was planted. And if you try to create another network similar to the ones before you are toast. But more to the point of this article and the challenge we all will face is not necessarily *just* the individual silos of information inside the giant silo that is inside the distributed connected network of computational devices but exactly what will be next. So just as I am trying to solve real world issues by creating new and exciting products- I fear that I am not innovating *enough* for the reason that I see what we are doing on websites as not different than the radio programmer sitting around trying to solve the problem of boredom. We each are living inside a vertical information silo (mine the internet) his (the radio tower). The internet will be become faster- but that network too shall surely find a competitor. We have to think bigger than who will stream the next videos that will entertain us. In fact, some of us are working on a few big ideas precisely because this network we are on (the internet) is starting to see the government regulate the information and it wants a new home.And the cycle continues…So I would not have trusted Amazon had not Business 2.0 and Upside not explained that hey you can trust these guys. Of course those were magazines, which, as I was trying to explain above promoted the eventual death of the contained information within the pages. Yes you can control and or even build off of a network but the seeds that will eventually kill said network have already been planted. And if you happen to believe that what I am saying
There is a terminology in hockey to describe this form of behavior, it’s called a “leech”. A players is leeching off another star player skills and success on ice. Much like James Neal of the Pittsburgh Penguins is leeching off Evgeni Malkin (NHL scoring leader), or in the Rangers case, Brad Richards leeching off Marion Gaborik. However, there are cases that the leeching player developed into a superstar like Martin St. Louis of Temps Bay Lightning, and I truely believe this is the case for Stocktwits and Zynga. I am regular user of stocktwits and love their product. You can tell in the internet world who is a leech and who will become a superstar by just focusing on their product development.Just wanted to shout out to my follow Torontonian Howard Lindzon, we are well represented. You made us proud!!!
There are a lot of interesting entrepreneurs coming out of the greater Toronto area these days
Nice post ! Thanks for, writing on my blog dude. Ill message you some time! I didnt know that! Springhill Group
This is a really relevant topic and I regret not seeing it when it was fresh in the eye of the highly intelligent regular commenters here. (Subscribing to email notification if engage.io has no way to notify me of new posts — hint)I’ve been thinking about this space for a while, specifically with professional or employment related services. Though I took a break to focus on more urgent life matters (like eating) I’ve been passionate about doing this. I don’t believe that building or relying on Facebook as the base of a professional social network is the way to go, not as a long term strategy and not as a limiter in what I want to do with my own network. I see Facebook as role, for me, it was my college friends, and I only see that as a professional relationship where some other link connects us. LinkedIN is purely professional, but it’s largely experienced people, in their jobs, taking advantage of carefully cultivated networks that are essentially “networking,” not always a friendship, sometimes little more than an acquantainship. It’s hard for me to see that as what I want from a “social network,” 21st+ century Rolodex fine, but not social network. I want to make the very act of finding a job a social and communal experience and I’ve begun working on a throw-one-away to do that just that.Would love to hear comments from you guys as I progress on this ‘jobitr 2.0’ experience.
I agree – I always read what he has to say. 🙂
You can always find him at HowardLindzon.com 🙂
yupthis is a conversation we’ve been having for years herei just keep coming back to it as i think it is fundamentallike boxing out in basketball