Why it’s hard to evaluate new social products

Like any tech early adopter, I try and evaluate every new buzzy product that comes to market. These days, many of these come with built-in social and messaging functions.

“What’s the point of this?”
Most of the time I find my most common reaction is “hmmm, well this is neat, but what’s the point?” These new products often look trivial, even unfinished. And yet, I find my reaction is often wrong because of how hard it is to evaluate the “network” component of a new social product, when the network is often 95% of the value prop.

Network blindness
I find myself blinded by the following:

It’s hard to demo the network, when only a few people are on it
It’s even harder to connect w it if it’s not YOUR kind of network – Quora’s the exception to the rule :)
The typical # of connections you need with active users to really appreciate a product is something like 10-20, and it’s hard to break through that threshold if you aren’t acquired organically via invites from a dense network already
The value of the network rises exponentially, which is hard to comprehend. That means a network can rapidly go from useless to useful very quickly
Finally, the non-network components seem technically trivial – the 140chars, the snap, the ding dong. This leads to a “WTF” moment for many people

Imagine using Twitter for the first time, but no one’s on the network. The whole thing seems pointless, and while it’s easy to grok the mechanics of how it works, it’s hard to guess that “oh, one day 200 million people will be using Twitter and then it’s really useful to find out news, celeb gossip, articles, and chat w people.” It’s a communication network at its core, and without the people, it’s not very useful.

eBay, browsers, and other platforms and networks
Many platforms and networks are like this- think of eBay with only beanie babies, and the foresight it would take to think the network would go beyond collectibles. Or imagine using the web browser if the web was only a few thousand pages. The same things that make these really powerful networks later on are the same things that impede comprehension of their value in the early days.

Single user products
Contrast that with great single-user products like Evernote, an amazing mobile game, or a new 3D TV. The value is a lot more obvious and it’s easier to demo because there’s no network component. You don’t have to extrapolate.

In fact, extrapolation of network effects is so hard that it probably makes sense to just try to invest in stuff that already has an engaged network, even at a small level. And to look at stuff like network density, the activity of cross-network interactions, etc. from a metrics standpoint. But even at the end of that, you still need to make a big leap on if they can get to the next level :)

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http://twitter.com/rodolfor Rodolfo Rosini

I do not fully agree with “Imagine using Twitter for the first time, but no one’s on the network. The whole thing seems pointless” – as it happens I saw the deck and the UX/UI of Jaiku [*] before it was developed and saw immediately the virality, use case and it differentiation. Granted, it was at a time when very few social networks existed but sometimes is easy to spot a great product just by its wireframes.

* alas Jaiku ended up being bearhugged by Google at a time when it was growing faster than Twitter, was more stable and was already a mobile-first product.
http://petegrif.tumblr.com/ Pete Griffiths

Yes – single user value makes early adoption much easier. Pinterest is great recent case in point.
http://jimshook.tumblr.com/ Jim Shook

Yup. And the factors that make them so hard to build from the beginning are the same ones that make them such defensible businesses later.
http://www.adamlieb.me/ Adam Lieb

I’ve really been struggling with the idea of micro/macro network effects and how they impact new user experience. Some products thrive on micro, some on macro, but the best products do both very well.
Keith McCurdy

Nice post Andrew. Good point about network effect and WTF moment. I guess that is one of the reasons that the easiest way to start a social product is with a focused group (like a college, or colleges). Amazing that Twitter got traction….
http://doriandargan.com/ Dorian Dargan

I think part of evaluating a social product with network effects is also having knowledge of current consumer behavioral trends & the foresight to see where they will be going.

If you can understand that a particular experience could appeal to users on a small scale, you can imagine that it’d be even more valuable when the network is larger, more diverse with greater opportunities for niche communities to develop and thrive.
http://andrewchenblog.com Andrew Chen

Seems like you’re trying to use an example of a failed product to argue the point it’d be obvious it’d be successful?

(Not convinced that the Google “bear hug” was the problem- after all, after its purchase, YouTube is much bigger and better than its ever been, with more revenue. Jaiku just failed, and its network wasn’t strong enough to keep it going.)
http://andrewchenblog.com Andrew Chen

Yes, and the weird part of starting with a niche that’s not techies is that then, naturally, the techies don’t get it :)
http://jimshook.tumblr.com/ Jim Shook

It really is amazing. Will make for an interesting HBS case study someday. Curious to know how the lean startup disciples fit Twitter’s rise into that model.
http://jasoncrawford.org/ Jason Crawford

“The network is often 95% of the value prop”—agree. Social apps like Twitter or Quora are all about two things: content and community.

The corollary is that the real work of building these products isn’t coding or even designing features. It’s community-building.
http://twitter.com/SerkanTweets Serkan Bolat

Good point! Twitter is a very simple and inefficient platform per se. Many people complain about 140-character limit, poor design, and lack of significant features
including tweet scheduling. Some even think Twitter is a nonsense time-waster. However, more than enough users happened to turn it into a value for one another, which makes Twitter a success.
I believe what defines success for almost all web products is consistent hard work at all times. Viral marketing works only for continuous hard-workers, too. Building a technically great network platform is just a starter, not a business yet, but making and keeping it enchanting for every single customer is the magic. Yet, customers do not create value on their own; it is founders’ ongoing effort enabling them to add
value. They evangelize, promote their product, work with developers, and so on.
Otherwise, history is full of founders who lost their passion for their once-success-story product. They stopped energizing the market and revitalizing consumer-product relationship. Then, the product is gone.

In short, as long as the product is not clearly in opposition to the current trends, we may give more importance to the degree of entrepreneur’s passion for his product and willingness to work faithfully in our evaluations of new social and web products. I’ll keep following Andrew’s blog to learn how to measure this degree:)
http://www.facebook.com/cyrus.adkisson Cyrus Adkisson

Brilliant post. This so perfectly outlines the early frustrations but huge possibilities of fundamentally social products… fairly certain your bullet points will find their way into an investor-facing presentation deck very soon (credited, of course).
http://www.facebook.com/cyrus.adkisson Cyrus Adkisson

This is also why accelerators will continue to dominate the social media product category. The built-in credibility (leading towards a near-guaranteed minimum viable user base) is too valuable for either the startup or the investor to ignore.
Constance

What do you do when you create a new product with one idea in mind, but your users find another use for it? I don’t know how often this happens, but it must take a lot of work to anticipate your user’s whims.

@andrewchen