Is there money in social networks?

Social networks have a very bad name. Whenever some startups open their pitch saying: we are a social network for XXX, many people would roll their eyes. I was one of those people. I thought that the social networking game has already been won. However, after reading the book "the social network business plan", I realise we may be on the blink on seeing what social network can unleash.

One of the reasons we write off social networks is the narrow perception we have of them. We have a fixed view of the kinds of interactions that social networks enabled . Typically, we are restricted to think of interactions such as friending, poking, updating profiles etc. That is too limiting.

If we expand our view to include 'social networks' such as Threadless, PatientsLikeMe etc, the scope for powerful interactions will increased. The opportunity then is to apply these interactions to new markets that required such organisations. Think of markets as radical as fighting terrorism, conducting medical research etc.

One way to spot these markets are the gross margins of current companies in that market. A high margin might suggest some form inefficiencies that the companies are using to exploit the consumers. Social networks are a way to shift the power back to consumers.

Posted in: idea generation,network