How do you know if a Social Media Startup will Fly?

Last week I was at an intimate round-table event where two bright and enthusiastic social media entrepreneurs touting around a new location-based service. On the face of it their proposition had something going for it – they began their talk with a whole host of scenarios where it could be useful, and a number of different groups of people it could work for. For as long as they were talking, the picture they painted was vivid, but as soon as they stopped, that image disappeared.

When the topic under discussion was thrown open to the group, there were a lot of tough questions posed, some around the specifics of the social media space, and others which were simple basic business:

• Is the service really different enough from what’s out there already?
• Is it going to serve an actual need in practice?
• Does it gel with the way people are already behaving?
• Who is it for – will it “own” a particular group or demographic to begin with?
• How will it generate revenue and make money?

Watching the owners of a social media startup being comprehensively grilled was struck a chord with me at a deep level. I have been through the ringer myself trying to get something off the ground that seemed entirely plausible, that generated enthusiasm, but which didn’t get anywhere, and which should probably have been abandoned a long time before it actually was.

The Key User Question in Building Critical Mass – What’s in it for Me?

In our case, the key question that we never really got a satisfactory answer for was how to build the traffic to critical mass. For network-based social media services, the value of the service is proportional to the square of the number of people already using the service. So, having 1000 people using such a network is about 100 times (10²) more useful than having 100 people using it. Hence, for the earliest adopters, the value must lie somewhere other than in the practical use of the platform itself. At the most basic level, the platform must be capable of demonstrating their status as an early adopter – being ahead of the crowd.

Enabling the growth towards critical mass, where the platform becomes useful for users other than the earliest adopters, requires answering one question repeatedly for all groups of users, for all stages of development and launch – what’s in it for me?

Users won’t do something for the benefit of your platform unless you make it worth their while. In our case, the time and effort involved in sourcing or authoring appropriate video was probably prohibitive for early adopters – the platform did not facilitate them showing off their early-adopter status. Without content, there could be no audience of people to either comment on, vote on, or even just view the content. In hindsight, this was the kiss of death to our own venture.

Believing in Oneself whilst Listening to Others

I am not sure how much the social entrepreneurs we met were listening – I suspect they took some of the tactical considerations for success to heart, but I’m not sure they will be seriously questioning their key premise. Getting a startup off the ground certainly requires sufficient self-belief to generate enthusiasm in potential partners and users alike, but that must be mixed with being receptive to good advice. Overall I felt that what I witnessed had too many holes in it – the answers to the basic business questions were too equivocal, too complicated, and, ultimately, not quite plausible.

I really wish that I had been given a similarly rough ride before I had committed to spending a lot of time, effort and money on my own doomed pipe-dream. Did I learn anything in my adventure? Yes, definitely? Would I attempt to create a pure social media platform again? Possibly under the right circumstances – but I wouldn’t do it if I wasn’t sure that all the basic business questions has been posed and answered plausibly and unambiguously. In particular, I would want to see a clear plan for building traffic and measurable sign-posts that would offer early exit points if it didn’t to take off.