The Value of the Network is in Defined, Small Groups

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Dan Karp wrote an observation on the value of networks in relation to Facebook’s growth, which resounds to me since I always suspect that “networks have to stay small to be productive.” This insight could save us a lot of headaches when we implement Social Networking inside businesses.

He compared Metcalfe’s law and a quote from Pail Saffo, a futurist. To summarize:

Metcalfe’s Law says that the value of a network is proportional to the square of the number of its users. In other words, the more people have phones, the more useful they become. This “network effect” leads to rapid adoption and puts up barriers for new entrants.

But unlike other networks, social networks lose value once they go beyond a certain size. “The value of a social network is defined not only by who’s on it, but by who’s excluded,” says Paul Saffo, a Silicon Valley forecaster.

Dan Karp then continues to say:

This suggests that the future of social networking will not be one big social graph but instead will be myriads of small communities on the Internet replicating the millions that exist offline. No single company, therefore, can capture the social graph.

Karp reinforces my observations that for networks to work, it has to serve a definite group (small groups, niche interests), i.e. college students, physicians, etc. I ponder on this specially in the adoption of Web 2.0 in organizations. The propensity to implement software solutions by means of tidal waves or en mass may be one of the problems we will be facing. Organizations are in such a rush towards the adoption and their expectations on impacts on performance might be misguided.

As Karp declared, about Facebook:

Facebook may yet succeed in being the one network for all interactions among people on the web — but that ambition might also bump up against the inverse of Metcalfe’s law, and against what we may discover is the natural grain of the web. The natural grain of the web, I assume, means “defined small groups.”


I decided to also add terms to my posts that are helpful for me to remember or learn new words and meanings:

Words and Mearnings:

virtual zombies; mini-feed; social graph;

“data exhaust” that gives users “better peripheral vision” of people’s lives

“Ray Jimenez, PhD

“Helping Learners Learn Their Way”

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