This article originally appeared on Forbes.com
I believe that smaller social networks will succeed.
I had better believe it, because HATCHEDit.com, the site I co-founded in 2011 is built on the thesis that there is certain information (calendars, photographs, vacation planning, etc) people only want to share with their closest social network.
However, the brouhaha that unraveled around “mobile journal” Path this week illustrates how challenging the business model is for small social networks, especially in light of current expectations for “hockey stick” growth of a network’s user base. In case you missed the excitement, it was uncovered that Path – which is available as an iPhone and Android app – was uploading iPhone address books – without the express consent of users. While this is apparently not an uncommon practice, nor against Apple’s rules, it goes directly against the way Path has branded itself, namely by what it says on it’s About Us page: “Path should be private by default. Forever. You should always be in control of your information and experience.”
Dave Morin, Path’s Co-Founder and CEO (and one of the original Facebook team), has since profusely apologized and the team has said that all stored address data has been deleted. In the future, users will also need to opt in to this sharing option, which Morin explained was in place only to alert users when there was a new member on the site who might be someone they would want to connect with.
I would imagine that this tactic would likely have been a main driver of Path’s virality because it is easier to get people to remain engaged with a social networking site if they reach an optimal number of connections. That optimal number happens faster if you can proactively alert users to connection opportunities as they arise. The question for Path going forward is how to maintain the “viral-ity” that was previously driven by obtaining this information. And, more importantly what if there is no way to replace it?
The network reached 1 million users in its first year, but was reportedly gaining only 10,000 new users a month, at which point many saw it as a “failed” social network. After releasing a new version the app was growing by as many as 300,000 new users a day, but we cannot know how much of that growth was fostered by the hijacked address data. If Path’s growth slows again, will the industry still view it as a failure? The sad reality is yes.
Not only is Path a beautiful app, it also meets the needs of people who want to remain in control of what they share online (should the firm gain back the confidence of users spooked by last week’s hiccup). But the long-term danger that it faces (and that all small social networks face) is that it will be perceived as an excellent tool that was ahead of its time. And that perception will not be because of any shortcomings in the product itself, but because it is so difficult for the tech industry, the media, and the business community to conduct business without keeping their eyes glued to the rear view mirror. What looms there is the outsized success of open social networks in ramping up the growth of their user base.
To judge all social networks by Facebook and Twitter standards is to ignore the future success of tools that are built for a completely different use. And, as Comscore pointed out in a report released at the end of 2011 regarding where social media is headed, “the next disruptors have yet to be decided”. Open social graphs like Facebook, Twitter, LinkedIn, Instagram and now Pinterest have all disrupted the idea of sharing online. They are the impetus for Web 2.0.
However, small social networks like Path, Foursquare and Hatchedit, are looking to disrupt the notion that individuals want all shared information to reach everyone they have ever met or connected with online. As was noted by Andrew Frank an analyst at Gartner Research in an article in this week’s Sunday NYT, Facebook might not be impervious to rivals or at least more divided attention from people who shift their time to other parts of the Web where intent is easier to understand and the interactions feel less public.
While these large social networking companies are still figuring out their business models and the way they will monetize their massive reach, it behooves the industry (and investors) to consider that sharing diluted by the size of a social network may, in the end, be less valuable than information that is shared by close knit groups.
For example, with well over 500 connections on Facebook I have discovered many things about people I know regarding their personal, religious, and moral beliefs that sometimes surprise me, and often conflict with my own beliefs. With these discoveries comes the risk that places or products I associate with these friends in my broad social graph will have negative connotations (ie., perhaps I will avoid the restaurant they seem to be at all of the time).
Maintaining a default to privacy is a huge challenge for growing a social networking site. I applaud Path for recognizing the importance of that promise to users because the thousands of people who are active on these sites are proof that there is demand for continued disruption in Web 2.0.
In the end, perceived success may be a David and Goliath fight, but I will side with quality over quantity every time.