Over the weekend I was reading an interview with Reid Hoffman, founder of LinkedIn and a partner at Greylock ventures. He made some interesting observations that social networks do best when they tap into one of the seven deadly sins.
Facebook is ego. Zynga is sloth. LinkedIn is greed. Twitter is wrath or lust (as in the case of congressman Anthony Weiner)? With Facebook it is about vanity, and how people choose to present themselves to their friends. It is the feeling of being connected. The trick is to exploit the importance of deep universal, psychological structure in people’s minds. Zynga is about fun. Fun is important and to have the ability to do something fun for 10 to 15 minutes that is right at your fingertips and involves your friends is better than Television (in terms of social connectivity). With LinkedIn, it is taking control of your economic destiny and improving how you operate as a professional to develop a competitive advantage. As per Reid Hoffman, these are fundamentals for having a fulfilling quality of life.He thinks it is always about scale – whether it is online gaming as in Zynga or at Groupon, a functioning marketplace for local goods and services that works on discounts and daily-deal kind of basis.
Well, Reid Hoffman matters these days as he is one of the most connected entrepreneurs in the valley. He led the Series A financing of Friendster in 1997; he founded LinkedIn which recently had the IPO at $8B valuation; he was part of the first round of financing in Facebook; plus he has investments in more than 100 other startups (both personal and via Greylock).
I also liked his characterization of “data” in social networking. If we call this social networking world as Web 3.0, then data is the “oxygen” or driving force. There are three kinds of data: explicit data, implicit data, and analytic data. Explicit data is where you contribute your profile. Implicit data is created by how you act online. And analytic data is information companies generate through an analysis of explicit and implicit data. For example, LinkedIn creates a picture that shows your skills and what skills most apply to you. This was compiled from explicit data you entered and the people you are connected to, but it is actually not a function of your activities, like answering questions on LinkedIn which was gathered through analytics.
Data is always the oxygen of any system. It’s importance is even more pronounced in social networking world of today and tomorrow.