The Business of Social Networks
David Silver, a venture capitalist who specializes in social networks, wrote The Social Network Business Plan: 18 Strategies That Will Create Great Wealth. I’ve been reading through the book with interest – since I’m a co-founder of Smaller Indiana and owner of a social network for Navy Veterans.
The two networks have very different business models and goals. Pat Coyle owns and operates Smaller Indiana and is looking to leverage the talent internal to build the ultimate network – bringing together talent, curbing the brain drain, supporting local arts and entertainment, and providing a center for creativity and ideas. There’s a ton of potential and opportunity to continue building out Smaller Indiana – so I don’t see a business plan in place yet (although I am going to share the book with Pat).
Navy Vets is on its way to become a non-profit limited liability corporation. The goal of Navy Vets is to be the largest and best social network for United States Navy Veterans. Any monetization of the network will be donated to veterans’ charities as voted on by its members. I’m looking forward to writing the first check soon! No doubt that the network will change lives… and separate itself from the other military networks looking to make a buck off the back of those veterans who have gave so much already.
The Social Network Business Plan makes quite a different perspective on how social networks should make money. In short, the power of numbers within the network should be utilized as a referral network to drive business to companies. Imagine a bank, a store, an attorney firm, etc. buying into being the official [insert industry here] of Smaller Indiana. That’s where David Silver sees the potential.
I couldn’t actually put the 18 strategies together to list here… I think there’s much more actually. David includes a thorough book on finding and buying, growing, monetizing and even selling your social network. It remains to be seen if referrals will be valued at the $600 to $1,000 per member that David supports… with over a million Ning networks and hundreds of millions of users… that’s a lot of money sitting out there.
If you’re a hard-working entrepreneur who can dedicate yourself to working day and night to grow your social network – than this may be just the book you’re looking for! I would have liked to have seen real-world examples to go along with each strategy in the book. For the most part, it appears the book is a bit of a forecast rather than a business plan.
As for David’s forecast, though… I do agree! The power of a social network isn’t in the features, the platform, the numbers… it’s in the relevance of the network to refer traffic and word of mouth marketing to modern brands.
