Feb 01

dataportability.jpgWHAT: the Adium/Gaim/Trilian of social networks

WHY: social networks will follow the same trajectory of instant messaging services 5yrs ago. We were talking tonight on ReadWriteWeb about how many people misinterpreted Open Social as being an open data exchange initiative for social networks. That it was not, but Dataportability.org is. And as it gets adopted I predict we will see a similar sequence of events that led to the commoditization of the IM platforms. Consider this:

Right now we have a balkanized landscape of social networks, at least 15 major players with varying levels of dominance depending on the country. Remember back when you had to run ICQ and Yahoo messenger on your desktop alongside MSN messenger and AIM because you had friends on each network? Dashboard products like the ones mentioned above emerged though and they unified the messaging so you could chat with whomever you liked via a single interface. Effectively the IM channels became irrelevant – your only awareness of which “carrier” you were using was maybe the color of the dot by the person’s name in the dashboard.

Now granted, this analogy isn’t entirely analogous (probably more accurate would be the advent of the jabber protocol), but right now social networks are like the IM services were B.C. (before consolidation): you have to sign on to each individually and maintain disparate profiles in multiple places. But as more players adopt the blueprints put forth by groups like Dataportability.org and we transition into A.D. (after dataportability), you’re going to see the same type of commoditization occur to the social networks. Now keeping in mind Clayton Christensen’s “law of conservation of modularity,” value never just evaporates, it gets teleported to a different layer. Where do you think the value will reside once the networks themselves become commoditized?

Bingo- the unifying client that is used to manage one’s communication and presence across all networks. You won’t login to Facebook/Hi5/Orkut/Beebo/Linkedin/whatever to interact with your peeps at that point, you’ll fire up your _______ client and have a single place to talk with everyone and manage your identity. This sequence of events seems inevitable to me and the startup I would keep my eyes on (besides our own ;-) is the one that has killer Flex UI designers on staff and is living/breathing the DataPortability specs right now thinking down this path. If that happens to be you, drop me a line and let’s talk.

7 Responses to “The startup I would invest in tomorrow if it existed”

  1. Sean –

    A significant difference between IM and social network data is that the value of the social graph is (perceived to be) orders of magnitude greater to marketing folks, application developers, advertisers, and thus the technology providers themselves. The economic incentive for the data owner to share is low — unless there is a clear way to increase the value of the data via sharing. One can argue that the user owns the data, but that is not the reality of the current Terms of Service for most services. Besides, users are encoding that data using technology created by the companies. (I own my identity, but I don’t own my credit report…the credit agencies developed the tools and protocols to encode my “financial network” in their systems.) Users who want to control their data would need to find services that don’t place a value on their data. Then they’d need to convince their friends, colleagues, potential employers, potential romantic interests, etc., to join that network (or one that shared with it.) For data sharing/collaboration to work, there has to be a clear win for the tech companies who have invested millions in the infrastructure to deliver a quality experience. (Would anyone pay $50 per month to use Facebook if they offered a premium service that allowed data sharing? Probably not. But they gladly take a free service with highly targeted ads based on the social graph!)

    While I’m a fan of open — I use open source software every day for my business, I use email and web protocols that scale due to their open standards, and I’ve contributed to open source projects — I also recognize that this data is essentially the secret sauce of the social network services. To change their posture, we as innovators need to present to them a clear way for them to profit directly from sharing it. I haven’t heard that idea in a concrete form that could be executed today. I would invest in the startup that could explain how to make more money for Facebook through data sharing — not just in hypothetical terms, but a hard business case.

    One development that might be of interest to fans of collaboration…we participated in a Google-sponsored Open Social Hackathon last night (proud to report our team won the contest :) in Mountain View, and there was a room full of Facebook application developers turned Open Social developers sharing ideas for compelling, rich social network applications (happy to report there was not a werewolf in sight!). The sharing of expertise, best practices, and designs for more entertaining and relevant applications will ultimately lead to a better experience for all users. Open Social will help foster the portability of applications so that the small companies risking their second mortgages and careers on this phenomenon will be able to deliver them to a larger audience, profit, and pour that profit into more innovation, and so on.

    Of course, the bad news is — none of them want to share their secret sauce for free either….not until banks give free mortgages to entrepreneurs ;)

  2. Dan B says:

    I agree completely with your thoughts on an integrated social grid. In fact, so much so, I think you have been reading our internal docs. :-)
    I would like to discuss this with you in more detail.

  3. Andy Edmonds says:

    Seems 8hands.com are walking down something of a similar path. Desktop based software tho… Would love to give them a run for their money ;-)

  4. Dan Mayer says:

    I believe this is the goal of Social Thing, as best I can tell the current site and product doesn’t come close that claim, but that is their claimed strategy.

  5. barry.b says:

    “social networks will follow the same trajectory of instant messaging services 5yrs ago.”

    I somewhat disagree.

    here’s why. I use adium/pigeon exactly the way you say – consolidation of my 4 IM accounts.

    but this only gives me core functionality – chat.

    when i’m on my Mac using Adium, I can’t videochat (or whatever it’s called) with my friends with MSN accounts.

    consolidation is fine for basic stuff, but chat is a lot simpler than social networks. As Linkedin gets competitors, it’ll work hard for market differentiation, by adding new features, etc.

    How do you consolidate that?

  6. some great insights Sean. I think data portability would be a great convenience factor and that’s something that we want to incorporate into the crowdbox platform. Since crowdbox would be a niche subset of event-based networking. Since we’re business/conference oriented we have a plugin for porting over a LinkedIn account and working on some similar for other networks.

    But the main thing I wanted to say deals with the convenience factor of having to deal with so many logins. At least in the short term we’re planning to integrate OpenID into crowdbox and really hope that there will become some kind of standardized credential system for the web so even though in the long-term there is still the hassle of having to deal with specific features of a given platform, at least in the short term there’s only a single login to remember!

  7. Dan B says:

    I agree completely with your thoughts on an integrated social grid. In fact, so much so, I think you have been reading our internal docs. :-)
    I would like to discuss this with you in more detail.

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