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:
— 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.