Let's Get Rid of it

This is the chance to utilize the network effects which we learnt during our MBA classes in the best possible way. If the suppressed souls in an Egypt and a Libya can do it , why can't we in this much lauded democratic nation do?  Tsunami of corruption was always here , lets not further allow it to wash away our well being , lets not allow it further to eat away our growth saga , lets not our future generations suffer from it. Better late than never , this is the time to seal your name in the history books. Lets get rid of this bunch of ants surrounding our hard earned sugar cubes. 

Social Network Size : How many can You Handle?

When i walk through the lanes of my hometown , i know everyone around knows me there. The people at smaller places are much more familiar and friendlier with each other than those living in big cities(Who has time?). Why so? Is it the time factor only?

In the earlier post on What is Your Online Social Limit? , a question was raised on the Bounded Rationality while we maintain our Social Relationships. Has our Social Network changed with the emergence of New Media? Has the technology expanded it?

Our 'actual' and 'real' friends still are very few limited by our own human nature and capabilities rather than technology. Social media is allowing us to 'maintain' our friends (who otherwise would move on slowly) in the rapidly changing world. As the old saying goes 'Out of Sight means Out of Mind', these sites ensure that friends are never out of sight and hence mind. They help us integrate our networks and rebuild (virtually) our old and many new communities. But where to stop? As we have seen in the drawbacks of Network Effects , after one point any new addition leads to congestion and slowly the value of the product/network/connections starts diminishing.

One School of thought says irrespective of the limits provided by these sites , most of human beings can maintain , nurture and sustain around 150 meaningful relationships at a time , online or offline it doesn't matter. This 150 is what we call as Dunbar's Number. It is considered the basic building block for human organizations (from many traditional corporates to Roman Army - are organized around this one Dunbar Number). Groups less than 150 members can function without any formal hierarchy and structure and hence minimal level of bureaucracy. Everyone knows everyone else and how they are related to each other in such groups.But with increase in level of social complexity in our relationships, this number seems to be getting reduced to a lower level. The average number of friends a Facebook account is currently 120 and (try/check yourself) the number of such friends whom we frequently interact is quite small and STABLE.

Here is this Social Networking Site which is trying to leverage on this phenomenon and restrict the number of friends we can have to 50.

They position themselves as 'The Personal Network' allowing anyone to share the moment (Photo Sharing) with his/her close friends (maximum 50). Hence , while you form your high quality network and share with only those who matter the most , the upper limit ensure that your network is not cluttered with just anyone and everyone.

Beyond 150?

Do we really socialize in big networks? Do we really so called 'network' at all then? We are merely broadcasting (advertising?) our lives to a layer built of acquaintances. Our real intimate friends are still the same - consistent and stable. One way to make meaningful networks is to divide your online friend-list into smaller units (functional , regional , etc) - That is the whole purpose of Tags and Labels for our contacts which we ignore most of the time. Such filters aligns the network's relevance towards the particular need at hand.

So is Big the new Small?

I have been living away from my home since more than 10 years now. From high school to undergrad to work to post graduation , one thing i have noticed that most of the time it is not advisable to have your best friend around as your roomie or as your flat mate or as your working group partner. The magic just wanes away slowly. The strong ties are an expensive bet.

Social Networking sites has given us the ability to build big networks comprising of weak ties which requires less time , dedication , inhibitions and commitment from both end and most of the time very valuable (getting new job or new projects or new client or a recommendation , idea or advise) in harnessing the true value of our network. And the bigger your social network is , the more are the chances that you wont be 'out of sight' of many of your connections. There will always be stream of updates , status changes of yours reaching out to your connections and vice versa and All Live. This is where Allen curve comes - which says that there is an exponential drop in the frequency of communication as the distance between engineers increases which implies the more closer we are , there are more chances that we will communicate. Online Social Networks bridge the gap and the distance and increases our chances of having a future communication with our connections.

What is Your Online Social Limit?

Okay , so i came across one Facebook profile and got stumped by the number of Facebook pages (see below) he has liked. Yes yes the count is in excess of hundred. Got  interested to know how he actually keeps up-to-date with his facebook news feeds. Won't the updates from these numerous pages cannibalize those pouring from his FB friends? And what about the Bounded Rationality concept being taught in our MBA classes? Will he be actually able to 'consume' the contents thrown by this pages? Perhaps he should have chosen Twitter (yes , thats how the twitter is being used now , more like feed/reader).

And can he keep on liking the pages the way he is doing? Can we keep on following on twitter and making linked connections endlessly? No flat no , it would convert the social space into spammers paradise, infact we do see many so called 'tools' which 'connects' to the unknowns basically in pursuit of their own marketing motives. So lets see the limits imposed by the social networking sites to ensure they remain relevant and avoid the spammers' dominance in their network :

Linkedin

• The status updates has a limit of 700 characters but keep it to 140 incase your linkedin account is linked to your twitter account.
• Total number of Invitations any one can send : 3000
• Number of Linked Groups any one can join at any time: 50
• Maximum number of connections one can have : 30, 000
• Also , the number of additional invitations one can receive is a direct function of the acceptance ratio of the invites sent earlier by the account.

There are basically 2 types of Linked Accounts:

1. LION: Linkedin Open Networker - They just go and connect with anyone and everyone sending and accepting invitations with no selectivity and inhibitions. Majority of them are regular recruiters who wants to broaden their network to find the best suitable candidates for their job openings.
2. Non-LION : They connect with only those they know and have some sort of personal or professional relationship. They believe more on the quality of their connections for any potential opportunity in case they require.

Facebook

• Maximum number of Facebook Groups you can join at one time : 300
• Number of friends one can have in his/her friend list : 1000
• Maximum Number of friends one can have is 5000 after which no friend can be sent an invite. But still one can follow any additional person through his/her fan page. What we lose out is having a sense of personal touch with such friends
• There is no limit on number of fans a facebook page can have.
• The status updates has a limit of 420 characters.
• The maximum number of pending friend requests one can have : 120

Twitter

• Maximum number of twitter account you can follow = Max(2000,110% of your follower count)
• There is no limit on the number of people following you.

Twitter in due course of time seems to be converging towards becoming a jungle of affiliate marketers. These accounts follows you indiscriminately so that you follow them back and if you don't in next 2-3 days they unfollow you. They just  want maximum followers for them who can click on the links they tweet and eventually help them get those pay per click advertising revenue. If you have a public (or not protected) twitter account , just ignore them once they follow you. They will go , come back again and again but don't you follow them back as they don't add any value to your network. Hold on.

Network Effects Revisited

In network effect , the utlity of a product increases as more and more number of people use it. So the more ubiqitious the product becomes , the more valuable it is. Example includes mobiles , telephones, fax machines , Social Networks, web marketplace like eBay, Groupon (the higher the free subscribers the better are the chances to meet the minimum guaranteed number of purchasers for the deal to actually materialize),  Wikipedia, Stock Exchanges(yes , as the number of participants increases the transaction cost decreases). 

What about SQL?? (Why all/most databases use this as their basic language?)

The initial value of any of the examples mentioned above depends on the quality of its offering and not on the number of people using it. This is the value generated by the offering when there are no other users.The initial quality is the key to atract the users which calls on other users also to join say through word of mouth. The product overall value accelerates once a certain critical mass joins in and derives value from interactions/connections with each other.

Drawbacks

Firstly,  it leads to congestion and slowly after one point of time the value of the product starts diminishing. This happens in case of telephone/mobiles networks wherein if the infrastructure is not scaled at appropriate time , then each additional user will increase the load on the network and decreases the value for other users. Is this what we are seeing happening with the Google Search engine. As pointed out in the article 'Why We Desperately Need a New (and Better) Google' , the search engine has become more of a jungle with spammers and marketers hunting around with their Ads and Sponsored sites and hence losing out on value. Thats what happened with Bill Gates who left Facebook due to huge number of friend requests pouring in; for him the value of the network started decreasing. Social Networking sites like Facebook surely will need to go an extra mile to safeguard the 'Spirit of Community' which will get destroyed with increasing number of friends/followers in one's network. The network will no more be social but again the same jungle of spammers and advertisers what Google is today.

The other drawback is that it causes vendor lock-ins wherein the customer becomes dependent on the provider for products and services and is unable to switch to another vendor. Microsoft has been doing that with its office products which required one to have MS Office to remain compatible with others many using it until Google Docs and OpenOffice's of the world came up and era of Free and Open Source Software (FOSS) got some momentum..

If there are no competitors to a successful network , then the monopolism sets in and the network provider starts hiking its charges and put restrictions. These restrictions out of the monopoly nowadays are inspiring many firms with new revenue model. The best example being Linkedin which restricts almost everything except your capability to add connections(that will come soon ! its just the beginning , let them face some 'congestion'. There is certainly going to be an inflection point where each new user will make the life harder for existing users. Imagine twitters and facebooks of the world charging you for making a status update.What will happen then? Multiple networks will then compete on an even similar basis, the core product value will again gain prominence. Eg: There are more fax machines in the world now than ever before but its value has decreased because of other substitutes like email, scanner, faster courier , etc. So the numbers have lost value here while the product is inherently losing out with modern ways of communications).

And if there are competitors to a network , then the silos sets in wherein each player starts setting their own standards and benchmarks. Thats what we are seeing in Mobile Operating Systems war - from Nokia and , Blackberry to Google and Apple all players trying to form their own community which promotes their distinguised OS.

One other interesting drawback can be that the markets can adopt an inferior product in place of some superior alternative just because of the network effects. For example i feel that Macs PCs are superior to Windows one but still its the Windows who are dominating the market. Same case with Apple iOS and Android and its the Android which seems to be winning the race. And governments/regulators do realize that since markets cannot be matured enough to choose the best standards/practices/products/networks , its the government who should take the lead to investigate and monitor the firms intention of making any offerings. Hence we see so many antitrust actions !

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Take this one now - Consider IT as an offering , is its value increasing with more and more of its adoption. If we go by Nicholas Carr argument , then slowly its becoming a commodity with no strategic advantage. So does it mean that IT doesn't have any network effect?