Blogging was where we began, and how we built our company so we have preserved this archive to show how our thinking developed over a decade of developing the use of social technology inside organisations

Social Networking tools: a bubble in the making?


I will be speaking at an NMK event in London on December 3 that Colin has provocatively titled “Selling Social Software” alongside two people whose company I enjoy a lot, namely Will Davies and the newly RSSified Louise Ferguson. This has prompted me to think about the many exciting things that are going on in relation to that title, but I am also concerned by the worrying level of hype and absurdly uncritical reporting that is starting to surround the area of social networking applications that many people think of as social software these days (Ryze, LinkedIn, AlwaysOn, Friendster et al)
In the time it has taken me to start writing this post, the following things have happened

  1. A trusted associate has observed that US VCs will invest in anything called social*.* (except presumably the -ism variant of that root) and do we have any ideas for a pitch?
  2. I have received an email from somebody I don’t know about the aforementioned event that says “I have been selling social software for more than a year as VP of Business Development for XXX Corporation” and suggests we discuss their product.
  3. Tom Raggett has noticed some funny PR advice on how to pitch stories to a blog: “…the question is how to land your clients in the right blog at the right time in order to reap the benefits of their highly receptive audience.”
  4. I have received an email from Tony Perkins, creator of the AlwaysOn Network to ask subscribers to help him write a book about Google before its expected $18bn flotation, because “last time I was hanging out with Google CEO Eric Schmidt, he once again reiterated that the interview series he did with AlwaysOn was the best he’d ever done.”
  5. I have developed an urge to spend lots money on interior design (remember: never let a very tall person design a kitchen) and I have been goaded into bidding on eBay Deutschland for several huge paintings of fish.

The signs are clear: it’s bubble time again! Don’t panic; we’ve been here before. Remove sharp objects and business plan templates from your desk. If your broker calls, buy shares in lawyers and inflatable armchairs
Earlier today, Dave Pollard picked up on Business 2.0 crowning social networking tools the technology of the year, and he suggested that they missed out on complementary areas such as personal publishing and knowledge management, which is probably true. But are the current wave of social networking tools really anything except a transitional technology on the way towards less novelty-based tools and techniques? Yesterday, the bloggerati’s nemesis, Andrew Orlowski of the Register, wrote that Friendster is the flag-bearer for a new wave of Venture Capital investment (Why the Friendster bubble ‘has peaked – will pop’)
“It’s the poster child for a clutch of new ‘social networking’ sites. Allegedly, Friendster was the recipient of $5 million from Kleiner Perkins Caufield and Byers, and allegedly too spurned a $30 million offer from Google. Kleiner Perkins’ John Doerr, sits on the board of both. We say ‘allegedly’ because the inside sources for so many of these rumors tend to have an interest in hyping the space. Just like the old days … And just like the old days, too, Friendster doesn’t make any money. Nor do any of the other social networking start-ups.”Looking back over recent posts to Many-to-Many, I notice that Stewart Butterfield fielded a good report from a recent event at Stanford’s Graduate School of Business called Social Networking: Is There a Business Model?, where (as he puts it) “The smell of old skool neon- and metallic-inked WIRED pages was thick in the air”. The consensus among vendors was that the question was answered in the affirmative. as Ross Mayfield put it: “I think we answered this question. Duh, yes.”However, Stewart also reports a teling comment from Cynthia Typaldos of the Software Product Marketing eGroup: “We evaluated all these tools and found nothing that that really works. This is a free agent nation and our career information can’t be owned by some company. What we found in the end was that Blogger, some blogging tools like blogtalk, blogrolling, and yahoo groups we had all we needed. It’s amazing what you can do with all that stuff.” That “stuff” she refers to, in case you don’t know, is mostly free or at least very cheap
So, where is the market? Services? Yes. Software? Maybe.Web Sites? No. The holy grail, if I can call it that, lies in engaging people, making the technology work for people without needing to learn a new culture, and in augmenting our existing social interactions in a purposeful manner, rather than just allowing us to have a zillion close friends or a business network the size of L.A. What the last bubble missed, and what we all would do well not to forget, is that none of this technology has yet become usable to the majority of people. Solving that one is a long hard slog, regardless of whether the VCs want to strap on money belts and run towards an increasingly crowded marketplace
There is a great buzz right now surrounding the new and exciting ways that we are learning about online behaviour and social interaction, and in many ways we are returning to some of the ideas of the early days of the Internet, which is reinvigorating. In a sense, the first bubble was a distraction from the real (but not instantaneous) progress that was being made in the mid-1990’s towards finding useful and meaningful applications for communications technologies. Let’s hope that we don’t have to go throught that again, fun though it was, just when we are starting to learn how we can apply social science and our developing understanding of networks and complex systems to the pursuit of smarter, simpler online applications. It would be sad to see clever people and companies crash and burn chasing rainbows rather than stay in it for the long haul and gradually build the next generation of online communications infrastructure
So …. what is “selling social software” all about? Well, you’ll have to buy our 10-part series (with videos, motivational tapes and an attractive ring binder) to find out. Remember, it’s not available through the shops, and you will automatically join a network of 500,000 of my closest friends. Failing that, come to the NMK event I linked to at the beginning and tell us what you think.

5 Responses to Social Networking tools: a bubble in the making?

  1. By Rage on omnipotent on November 7, 2003 at 3:30 pm

    Spoke: Social Network Analysis

    raSpoke Software does an interesting social network analysis tool for sales relationships. I think they (or someone else) should extend it to recruitment, consultancy, etc. Imagine being able to piece together networks in the ODPM, for example, just t…

  2. By Cynthia Typaldos on November 13, 2003 at 4:58 am

    Yes it’s true, all of this social networking software stuff (that matters) can be cobbled together using free, or nearly free, software and services. There is a lot more information about my thoughts and experiences in social software at my website, my blog, the ProfGuild/SPM website and the ResumeBlog blog (URLs are below).
    I was only allowed to speak briefly at the Stanford Venture Lab event (Tony Perkins not only preferred to hear himself speak instead of the panelists even though he was ostensibly the moderator, but he also stated that I could only speak after the others were thru).
    Anyway, I made a few other comments before Tony cut me off. 1) there are only two significantly interesting uses of social networking — job/career related and yellow pages. 2) the motivation of the nodes, and the chain length are incredibly important — for example, unless you are a contagious virus, more than 2 degrees of freedom results in mostly useless connections. Lots more on these topics in my blog and website.
    Would love to get some feedback.

  3. By Common Craft - Online Communication Planning on November 13, 2003 at 11:39 pm

    Changing Perceptions and Social Software

    I haven’t really written much about the “Social Software” movement/bubble/sector/buzz that’s been created as a result of the success of sites like Friendster, Linked-In, Ryze, etc. It’s not really my focus, but I couldn’t help but post some thoughts- s…

  4. By Lee Bryant on November 19, 2003 at 12:06 pm

    Thanks both.
    Cynthia: interesting to hear your comments on the meeting. I agree that insufficient attention is paid to node motivation and chain length. The theory of weak ties was orginally an economic, not social idea and some of the hype in this area is just silly.
    Lee: I too am very excited by this area, but we should try to retain some critical faculties nonetheless. E.g. you switch seamlessly in your piece (trackback above) between online social networks and online communities – yet, in my experience, communities cannot simply be created simply by linking together a zillion people on Friendster – communities have shared values or language or place or interests etc, and they need to develop bonds otherwiuse they are just an amorphous aggregration of individuals.

  5. By Chris Smith on July 1, 2004 at 4:12 am

    And this is my homepage.
    Chris Smith o