StumbleUpon, Del.icio.us, Faviki, LoopLinks, Instapaper, LinkRiver, Diigo. These are some of the bookmarking web applications. Such market niche with so many choices for users. How do these app merchants stand out and make themselves, well, “special”? How to encourage take-up among the digital dwellers? This article aims to describe the imperatives of social apps and key competitive factors to thrive in the dynamic web marketspace. The imperatives are presented in the form of Social App Adoption Equation.
Social App Adoption Equation
Social App Adoption equation, Adoption = f (Cost, Utility, Social Effect), where Adoption refers to the propensity and motivation to use a particular web app
Cost is expended, which refers to the time, effort and dollars spent during the period of adopting and assimilating the web app into one’s life. At his talk at the recent Netbash @WCIT 2008 in Kuala Lumpur, Vinton Cerf mentioned about the creation of risk-free environment for your prospects and customers to try out your products/services. He gave the examples of Google and Xerox. Google created AdWord, which customers don’t get charged until their text ads were clicked. Xerox charged its customers on per-copy print. Both Google and Xerox lowered the adoption barrier.
Web apps can be offered as free and thus, minimize or eliminate the cost factor. It is common for many web-based startups to let users use their products and services for free. Think Facebook, Twitter, YouTube, Flickr, Lastfm, Plurk, and many, many more. Generally, these providers launch first, build a critical mass of users, and eventually, discover later the right revenue model. Only quite recently Facebook start monetize its user-base with ‘social ads’
Another flavor of free is the versioning strategy, where software/service are chunked into different versions. The ‘free’ edition usually with limited features compared to its ‘pro’ version. Of course, there is also the try-out strategy, where companies offer limited trial period e.g. 30-days and allow users to freely try out the products. After the trial period, users will need to purchase license to continue using it. Also, the web apps must come with built-in simplicity.. from sign-up process to mastering the product. Tedious sign-up process can discourage users. The rule is, as little effort as possible to master the app.
Utility is experienced and derived by exploiting the capabilities and features of a particular web app. In the Age of Dot-Com (1995 to 2001), web apps focused on functional aspects for enabling self-service. Key metrics include number of eyeballs and critical mass of users. The Age of Social Web (2001 – present) focus on interaction, relationships and shared meanings & experiences. ‘Web apps’ added with social-ness. This is not to suggest that social-centric sites didn’t exist prior the Social Web age. SixDegrees, a social network service, was formed in 1997 and was shut down in 2001. SixDegrees is ahead of the market’s adoption curve.
Eventually, sites like Friendster (founded in 2001), MySpace (2003), Orkut (2004), Facebook (2004), Bebo (2005) emerged and ignited the social networking wildfire. The functional utility, which can be derived by exploiting the capabilities of the web app. Bookmarking web app provides bookmarking, search engine provides search function, so on and so forth
Social Effect refers to the network effect of a particular web. The value of a social app is dependent on the number of people using the apps. The more people using a social app, the more ‘valuable’ the app becomes. Users also extracted value via experiencing of ‘social ties’ forged within the community. The social ties, in turn, emotional bonds, a user forged within a community act as a form of barrier to entry or lock-in for social app providers. First-mover advantage provide head-start but no guarantee of winning.
‘Social ties’ can be sticky. A user who has created a profile on Facebook with considerable number of friends is quite unlikely to move to MySpace. A user with hundreds of followers on Twitter is reluctant to move over to Plurk. This stickiness is good for the creation sustainable community of users.
Social App Adoption equation provides a simplistic conception of the critical components, which are utility, cost and social effect. The lower the cost, the higher the utility, the more robust the social effect will lead to higher adoption rate, fueled by positive feedback. The consideration of these elements is critical for merchants of social apps. Of the three elements, Cost is probably the element within the total control of the app merchants. Next is utility derived, which may differ from one individual from the other. Different users assign different perceive value to each function. The Social Effect element is beyond the control of the merchants.
Free is Never Enough
Free (Cost) is a commodity these days. The Free factor helps in getting users to try-out a web app but it’s not a compelling enough to develop social stickiness. For example, the growth of Facebook. The social networking site is certainly not the first one in the marketplace. Before Facebook, there are already established players like MySpace and Friendster.
However, Facebook managed to grab the spotlight and is showing impressive growth, mainly due to its innovative flair. The company open up its platform to the third-party developers in May 24 2007. To date, there are about 400,000 developers (e.g. Microsoft, Amazon, Slide, Rock You, iLike, etc.) have developed over 24,000 applications on the Facebook platform. Recently, it launched Facebook Open Platform, FbOpen, to make the developer platform open source. By opening up its platform, Facebook can swiftly enhance the value (Utility) of its site, at a speed it couldn’t have done if it goes alone. MySpace used to ‘dislike’ independent developers for its social networking site and usually either shut them down or buy them out.
The platform strategy worked well for Facebook and it is one of the key reasons it managed to grow at impressive rate (Social Effect), despite being late to the social networking scene. Such innovation makes Facebook the coolest kid on the block!
The Facebook example is a reminder to social apps merchants that lowering of adoption barrier is prerequisite in the Web world. Innovation that leads to better user experience and generation of social effect around the web app determines success.
Becoming Sticky Social Platforms
Here’s the simplistic steps of how social platforms evolve:
- Imagineering Sit under a tree (or wherever) and think of the next crazy, sexy, cool social app to do and engineer it!
- Set it Free Roll-out the social app and make it free (it’s more like a free beer, rather than free speech).
- Scale the Crowd Entice the Web mortals to your virtual social world with your refreshing’ community context and concept (e.g. Zebo with people listing the stuff they owned) and ‘tools’ (web applets).
- Swirl the Loop Get on that positive feedback loop by getting on the TIPPING POINT
- Monetize the Social Streams Remember, the purpose of a business is to generate profit. So, monetize your crowd to foot your bills, finance your next project, etc