Friday, March 6, 2009

Are we social capital pack rats?

On a previous post, A note on "branded" email, I mentioned the study I carried out together with several classmates on the value proposition of social networking. Thang has spotted an article on The McKinsey Quarterly, When job seekers invade Facebook , that touches on two of the subjects we dealt with in our study.

The first subject is The transferability of "Social Capital" from offline to online. In our study we supported the thesis that, amongst other benefits, the value proposition of social networking has to do with accumulating social capital. As the article reads "Anthropologists tell us that it’s impossible to maintain stable social relationships with more than 150 people." True! Of course users do not maintain stable social relationships with all of their contacts. In-depth interviews with users showed us that usually social networking websites like Facebook work as a repository of potentially useful contacts.

In other words, we collect acquaintances, people we think we might reconnect with, be it for leisure or professional purposes. Given that storing contacts is virtually free, why not doing it? Who knows if I might need those contacts later?

[ Side note 1: Facebook uses a rigid and awkward mechanism to manage people in our network. Facebook forces us to label such an heterogeneous set of online contacts as friends. What about mimicking the offline categories we already use: friend, relative, work colleague, acquaintance.... "Contacts" could be the generic or default term. This taxonomy would allow users to manage privacy and content-sharing permissions in a more natural and transparent way. ]

[ Side note 2: Something that intrigues me are the psychological / sociological reasons behind this "contacts-collector" behavior. Does it have to do with a culture of not giving up choices?]

From a business perspective it results that within our social networks we have a humongous amount of potential value that we rarely convert into anything real. Deeper friendships, job opportunities, favors, or even romantic dates go unrealized. The biz question is very straight forward then: is there a way of materializing that diffuse social capital? In a meaningful way, beyond casual apps, I mean. The entrepreneur in me has a couple of ideas about it...

Let me finish with another quote from the article: "Overall, online social networking, with its support groups and trusted access, is governed by a culture of sharing, not selling." That also appeared as a clear conclusion of our user research. Does that mean that business models that rely on selling are completely preempted in social networking? Well, that is the second subject of our study I alluded to at the beginnig of this post: Creating and capturing value: Specialized vs. generalized social network platforms. I better end this post here or I would have to rename it as the never ending post... Audience, the discussion is served...anyone?

1 comment:

Thangcitadel said...

.... although I generally agree with the thought in the article "Overall, online social networking, with its support groups and trusted access, is governed by a culture of sharing, not selling", I believe starting with "the culture of sharing" and building trust, and gradually transforming it into businesses is largely true in both settings, offline and online. Probably this "sharing and building trust" stage is much more critical online than offline due to the nature of online, people don't know one another in real world, they have no idea of the others, therefore sharing and building trust should be emphasized before moving to any business transaction.

I am not sure the thought of " ...for many there’s nothing more irritating than when a new “friend” contacts you almost immediately with an inappropriate request for a favor" is valid in professional social networks.

First of all, the use of the word "friend" here can be misleading. When I am thinking of people in my network in Linkedin, I never come across the thought that they are my friends, especially to those who I just "meet" in Linkedin. I just think of them as one of the people I know in my network and we have the same interests to come to this common place, therefore I believe we have some level of trust of each other. This trust, I believe, comes from the place in which we meet, "linkedin". Think about the situations that you meet with someone randomly in Ritz-Carlton hotel or World Economic Forum, and someone in a metro station. With whom you would develop a higher level of trust immediately? This relates to one of the findings we found in our study. By the fact that people come to social network with a specialized interest, esp. in professional settings, it is easier for them to build trust and to conduct business in related fields. That is the reason why we believe linkedin or similar specialized social networks should come to realize a sounder business model than a more general ones.

Secondly, based on my personal experience, I am not sure whether a new "friend" request would irritate people in linkedin. Recently, in order to prepare for two interviews, I had to utilize Linkedin. I wanted to do some informational interviews with people who are in the programs (of the companies) that I am interviewed with. Just a simple search in Linkedin gave me three results. Unfortunately they were not in my extended network, and appeared private in Linkedin. I requested to add them to my network and send along an email to ask for a favor from them. To my surprise, I received their replies within hours. We talked on phone many times and they gave me a lot of valuable advice and really wanted to help me with my interviews.

Someone might argue that they are doing so because they want to promote their companies to prospective employees. I wonder whether their motivation is actually closer to Linkedin's motivation - connect professionals and help them succeed through contacts, network, and information. That is what I believe and I just do the same because that is the reason I joined Linkedin in the first place.