January 27, 2007
SRO @ SAP
Social Networking was the topic last night at the German-American Business Association's (GABA) sold out panel discussion. Matthias Hohensee, moderated a panel of four leading CEOs in the social space. SAP was kind enough to ignore the fire code as an overcapacity crowd squeezed into one of their conference rooms.
Matthias began the conversation by citing the oft told tale of MySpace and Facebook's success. As in so many similar conversations, those two companies are mentioned in the same breath, as if they are the same sort of platform. Konstantin Guericke, co-founder of LinkedIn, observed that the two platforms have significant differences. MySpace is about self-expression. Given the younger demographic, teens use profiles to try out different personas. Facebook appeals to an older group with less soul searching about identities and more emphasis on projecting an accurate profile online.
LinkedIn took four years to achieve critical mass and Konstantin attributes that to their older demographic. The average age of a LinkedIn member is 35 and he said that the 30 to 40 year old crowd was their sweet spot. He conceded that 55 year olds are just too slow to adopt new technologies.
Since social networking is a "mature" Web 2.0 space, having been on the VC's radar for at least five years, the search is on for underserved market segments. Johannes Ziegler of MiaPlaza is focused on supporting "the life of a grownup." He's connecting with the needs of an older group through communities that first exist in the physical world. MiaPlaza provides a "safe" place for church groups, service organizations, and neighborhoods to extend their networks into the digital domain. His advantage is that MiaPlaza increases the relevance of its content to the user through personalization.
There's a trend away from the "ubernetworks" as Ross Mayfield called the big players like MySpace and Facebook. In a world that has 400 social networking companies in the U.S., smaller niches are being catered to. Just like the real world, there's built in churn as fad and fashion ripple through society. In that sense, marketing a social network is similar to marketing a trendy bar or restaurant. The network has to remain fresh, interesting, and deliver relevant value to the user.
Ross pointed out that "Widgets are the battering ram that will fracture the sand castles of large social networks." A Flickr widget brings people together around an object. A photo with a story attached can be more compelling to some than millions of MySpace pages plagued by bad design.
While not all agree with Johannes that senior citizens are an attractive growth market, there are changes in the nature of networks that will broaden their appeal. Tom Schulz of Trusted Opinion pointed out the importance of trust in online recommendations. He claims that Amazon's recommendation system is broken because it relies on input from people that may or may not share your sensibilities. By limiting recommendations to friends or friends of friends, the recommendations are more likely to meet your expectations.
Towards the end of the presentation, the topic of unpredictability came up. It was noted that nobody expected that Friendster would be overrun by the Phillippines or that Brazilians and Indians would take to Orkut. Cultural differences are inherent in the choice of networking platform. Finally, it was noted that it's unlikely that Germans will ever reveal as much about themselves as Americans. Differences in culture and data security laws give German social networks a more conservative flavor. Perhaps that's why LinkedIn is so buttoned down. As Ross observed it's been almost five years and LinkedIn still doesn't allow you to post photos. Or as Jochen Wegner said in Naked Conversations "It is not natural for Germans to share their views and talk about themselves."
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