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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Another View on Vertical Social Networks

Comments (10)

Once again, David Cohen has “encouraged” (euphamism for “hey Brad, c’mon and write that post already”) me to respond to his post titled Big or Bullshit – Vertical Social NetworksDavid called bullshit – he thinks “the aggregators and toolsets that emerge around identity” will be big.

I’m a horizontal guy.  When I look at where I’ve made money as an investor, it’s mostly in things that cut horizontally across a domain, rather than a narrowly targeted vertical activity.  That’s where my bias lies.

But I also like to think that I’m a flexible thinker that is always willing to learn.  I only really learn by doing, so I’ve made a few angel investments in vertical stuff, including Wallstrip (bought by CBS), Dogster (dogs and cats), Shelfari (book lovers), New West (online magazine about the New West), and The Enthusiast Group (for – er – enthusiasts – stuff like YourRunning and YourMTB.)

I’ve learned a lot.  Dogster has blown me away with their success – who would have thought dogs would have more friends than a typical MySpace or Facebook dude.  Some of this is Ted Rheingold and his teams obsessive focus on their business while some of it is the amazing power of a compelling vertical network.  But the real magic is the traffic numbers and the corresponding revenue generated by escalating traffic and a high eCPM due to tight targeting.

Not surprisingly, generating organic traffic is the biggest challenge for a vertical social network.  The second biggest challenge is stickiness – once you get the user, what do you do for the user to keep her using the site.  Primary content generators – like Wallstrip and New West – aren’t really social networks – yet.  But you can see how they could evolve toward that with a little elbow grease (and a squint.)  The others rely on regular usage – and this is where the concept of vertical social network starts to stall.

I woke up one day and had 2,741 logins to different social networks where I had “friends.”  That’s 2,740 too many (some of you might argue that it’s 2,741 too many.)  I’ve got the same friends on multiple services, but there is no integration between them.  Aha – the need for a social operating system, ala what Facebook announced with the Facebook Platform.

But living in a single platform doesn’t work, unless it does everything I want and Facebook has a very long way to go.  I doubt I’ll shift my various blogs to Facebook (even if I republish them there) so suddenly I have my own Vertical Social Network – people that read my blog (and the blogs in my blogroll.)  We are right back to horizontal land – ala Lijit, MyBlogLog, and Me.dium.

I have three conclusions from all of this.

  1. Vertical Social Networks don’t need a lot of cash to get to an interesting point.  None of the companies I have invested in have raised over $1m and it’ll be clear before they get through the $1m whether or not they are on to something.
  2. All Vertical Social Networks need to be creative about both generating traffic and keeping traffic.  Aha – the value of widgets.
  3. If I hear another person with a plan to be “the MySpace for <category X>” (now people are saying “the Facebook for <category X>”) I’ll puke (not really, but this isn’t an effective way to get my attention.)

I don’t know whether Vertical Social Networks are going to be big or bullshit.  However, I do know that I’m going to continue to hang out in horizontal land.

  • paul malin

    what do you think of http://www.ning.com

  • http://blog.supernaturalagency.com MartinE

    Actually if you use ning you could start a vertical social network for practically nothing. You have to pay them something to control advertising and your domain, otherwise there are no dev costs. Maybe a PR retainer and some SEM…

  • http://www.linkedin.com/in/rdewey robert

    I’m thinking there’s still an opportunity for a horizontal network. The one problem I see with existing solutions is that they all require a user to exist within a proprietary network. You can’t add contacts who are not in the network, nor can you communicate with them. Tell me the scalability in that.

    The network is your communication. The network is who you interact with. If I know John Doe’s e-mail address, then I should be able to directly add him as a connection, not waste my time with an invite process. If I know Joe Blow’s mobile number, then I should be able to add him. When I add someone, I should be able to add as much information about that person as I can in the form of simple tags. Others who connect to the same people can fill in the gaps, or fix any errors.

    With technology like XFN and other microtags, such networks can flow with the internet. You have tons of people in your blog roll… all representing relationships. XFN tries its best to show this, but it often fails as your need a new HTML microtag for each connection.

    When you break it down, you get efficient communication via open standards (i.e. e-mail) – not proprietary messaging locked within a specific service. As the semantic web begins to take over (somewhat), such a network would also allow the attachment of data to specific users (such as iCal).

    Take care,

    Robert

  • http://www.pardonthedisruption.com Chip Griffin

    I think vertical social networks alone are but a tool, not the end game. I argue in The New Media Cocktail e-book that convergence and the power of niches represent the future of media and content. Vertically-oriented sites that blend content and applications have strong potential. You allude to such a combination when you note that Wallstrip isn’t YET a social network.

    Building relationships and providing content together is a powerful combination.

  • http://cg.urbantwelve.com Chris

    If I hear another person with a plan to be

  • http://blog.thylmann.net/ Oliver Thylmann

    Another thing is social networking as a feature. It does not need to be the entire concept. We got asked recently why we now want to become a social network … well we don’t, we just will. Social Networking is a feature, Tagging is, Ratings are too, … at least if you are in the local lead generation market.

  • http://cg.urbantwelve.com Chris

    The problem with

  • Luke Karisny

    First, I believe that social networks are inherently vertical. Myspace is where the teens hang out and Facebook is for 20-somethings and tech / valley / alley geeks. Since these were among the original social networks they never had to brand themselves as “The for ” because the idea of a social network was still novel and not the web 2.0 buzzword that it is today.

    Secondly, a single ecosystem (or operating system, to use the correct “industry term”) will probably never be attainable (see: OpenID, etc.). If it is, it won’t last long. The web is constantly changing and it only takes me about half a second to click that StumbleUpon link to find the new hot site of the week. Netizens owe allegiance to none, especially not to those who provide no real value or sustenance.

    I think that everything we see right now only makes us ask more questions until eventually one person, or a group of people, will realize another way in which our lives can be simplified by technology. Soon after that you start to see many things become obsolete. This age-old observation of technology finds its way into the web where it moves in short and sometimes very long cycles.

  • http://www.shelfari.com danny

    I am a first time reader and like where your thinking it at. I don’t know if Facebook will be the centalized hub for all vertical social networks. But the facebook platform is definately a step in the right direction. Shelfari just created a facebook application and linked it to their website. I wonder if all social netwroks will start doing that as well. Any opinions?

  • John Svoboda

    The problem with the verticles to date is that most are not granular enough to define a natural community. If you’re out walking your dog and you see another guy walking his, do you automatically pick up a conversation? What about if you both have German shorthairs? Ah, different. The question then is how to build narrow yet have the growth upside. Dog breeds were an indigenous structure that other categories don’t have. Ning bets that user-defined width is the answer but a downward spiral of fragmentation is the likely conclusion. Maybe the answer is not in the structure, which is easier to debate, but rather in the user motivation.

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