Mobile Could Be What Makes Private Social Networks Succeed
Photos, location, professional networking, or all your real-life friends… Instagram, Foursquare, LinkedIn and Facebook lead social networking today because they’ve found existing the types of networks to connect users around.
Now a new generation of startups has been showing up in recent months, trying to nail another type of networking that so far has yielded no big success: small, very personal networks. Like you how use texts with your closest friends.
These companies are looking pretty healthy — almost too healthy, if you look at some of their valuations versus their user numbers — and it’s because of how they’re using mobile.
Path is the market leader here, even if the overall market is small today. Having relaunched last fall as mobile-only network for close friends that provides a cool spinny menu feature for actions like photos and check-ins, the company has shown enough progress that it was able to raise $30 million at a $250 million valuation. It reportedly had around three million users as of the April funding, with a half a million people on it multiple times per day.
So, not that big. But it’s quality engagement, particularly for a mobile non-gaming app.
Pair, which launched last month, may have finally nailed a social network for the monogamous. As of its marquee-investor funding round last week, it had 220,000 downloads (not bad for an app that is the opposite of viral). United Kingdom-based Cupple and Korea’s Between have already offered similar apps, with both claiming larger user numbers.
High-quality smartphones seem to have set this new class of apps off: great photo and video recorders make the content you share higher quality, and location and other device features help you easily show your friends what you’re up to every day. Designed properly, these mobile features can provide the intimacy that a previous generation of privacy-themed sites didn’t do on the web.
Some top examples ended up as small acquisitions. Drop.io focused on files, and sold to Facebook in a talent acquisition, The Fridge went to Google, and a variety of others gradually faded away.
But it’s easy to see a bubble in this set of niches. They’re all small by many measures. Facebook is at more than 900 million people. Instagram is somewhere around 50 million. Networks designed for as few people as possible naturally grow slower. So while Facebook is making money with relatively low-performing ads because it has so many users, that same possibility is further off for these apps.
The photo filters on Path are one example of an alternative revenue stream, but one suspects this won’t be how the company ends up making its investors money. And yet, there is a world of possibilities. It’s easy to see deals targeted at anniversaries or happy hours be valuable to users. Or mini-games that come with virtual currencies built in.
Will Facebook or other more mature networks compete directly? So far, the market leader has messed around occasionally with list features, but has avoided creating specialized networks. Its mobile app is bloated, it doesn’t pull together social and mobile features in a way that can compete against the mobile-first apps. But it already has a great asset in this contest: Messenger. The Beluga-derived mobile messaging app that keeps getting quality upgrades.
All in all, the quality of the apps and the growth they’re seeing suggests that 2012 could be the year that private sharing networks finally came of age.
Photos, location, professional networking, or all your real-life friends… Instagram, Foursquare, LinkedIn and Facebook lead social networking today because they’ve found existing the types of networks to connect users around.
Now a new generation of startups has been showing up in recent months, trying to nail another type of networking that so far has yielded no big success: small, very personal networks. Like you how use texts with your closest friends.
These companies are looking pretty healthy — almost too healthy, if you look at some of their valuations versus their user numbers — and it’s because of how they’re using mobile.
Path is the market leader here, even if the overall market is small today. Having relaunched last fall as mobile-only network for close friends that provides a cool spinny menu feature for actions like photos and check-ins, the company has shown enough progress that it was able to raise $30 million at a $250 million valuation. It reportedly had around three million users as of the April funding, with a half a million people on it multiple times per day.
So, not that big. But it’s quality engagement, particularly for a mobile non-gaming app.
Pair, which launched last month, may have finally nailed a social network for the monogamous. As of its marquee-investor funding round last week, it had 220,000 downloads (not bad for an app that is the opposite of viral). United Kingdom-based Cupple and Korea’s Between have already offered similar apps, with both claiming larger user numbers.
High-quality smartphones seem to have set this new class of apps off: great photo and video recorders make the content you share higher quality, and location and other device features help you easily show your friends what you’re up to every day. Designed properly, these mobile features can provide the intimacy that a previous generation of privacy-themed sites didn’t do on the web.
Some top examples ended up as small acquisitions. Drop.io focused on files, and sold to Facebook in a talent acquisition, The Fridge went to Google, and a variety of others gradually faded away.
But it’s easy to see a bubble in this set of niches. They’re all small by many measures. Facebook is at more than 900 million people. Instagram is somewhere around 50 million. Networks designed for as few people as possible naturally grow slower. So while Facebook is making money with relatively low-performing ads because it has so many users, that same possibility is further off for these apps.
The photo filters on Path are one example of an alternative revenue stream, but one suspects this won’t be how the company ends up making its investors money. And yet, there is a world of possibilities. It’s easy to see deals targeted at anniversaries or happy hours be valuable to users. Or mini-games that come with virtual currencies built in.
Will Facebook or other more mature networks compete directly? So far, the market leader has messed around occasionally with list features, but has avoided creating specialized networks. Its mobile app is bloated, it doesn’t pull together social and mobile features in a way that can compete against the mobile-first apps. But it already has a great asset in this contest: Messenger. The Beluga-derived mobile messaging app that keeps getting quality upgrades.
All in all, the quality of the apps and the growth they’re seeing suggests that 2012 could be the year that private sharing networks finally came of age.
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