How Not To Be Abundant

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How Not To Be Abundant

Build an online community that requires you to be invited to join.

The community is called aSmallWorld.net.

I suspect that the community is aptly named.

While I am the subject of my Abundance post, I would like to thank two bloggers whose work over the past couple years inspired that post, Umair Haque and Mike Masnick. Thanks guys.

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» VC Rating: A Small World from VC Ratings
Company: aSmallWorld Description: High-end social networking Competitors: The snobs, celebrities and petty aristocrats using MySpace and Facebook Location: London Amount Raised: Undisclosed (not enough to scare anyone) Round: First Date Announced: 5/2... [Read More]

Tracked on May 22, 2006 3:52:39 PM

Tracked on May 22, 2006 4:19:11 PM

» VC Rating: aSmallWorld from VC Ratings
Company: aSmallWorld Description: High-end social networking Competitors: The snobs, celebrities and petty aristocrats using MySpace and Facebook Location: London Amount Raised: Undisclosed (not enough to scare anyone) Round: First Date Announced: 5/2... [Read More]

Tracked on May 22, 2006 4:39:27 PM

» Inverting the Supply Demand Curve? VC as Economists from Hitchhiker's Guide to 650
In the physical world scarcity is what leads to value. In the digital world abundance is what leads to value. Or atleast thats what Fred Wilson claims (follow up post) In econ 101, they try to teach you that the demand curve slopes downwards, that... [Read More]

Tracked on May 22, 2006 4:45:08 PM

» Open vs Closed Social Network Services from Kauffman Hub
There are several experiments going on comparing closed and open networks. This post includes my thoughts on which is better. [Read More]

Tracked on May 23, 2006 10:41:02 AM

» Networks: Open or Gated? from SortiPreneur
I find it ironic that I disagree with Joseph's post about gated communities. He argues that, for the following reasons, the majority of online networks will be gated.Gated communities have the following characteristics, making them attractive incubator... [Read More]

Tracked on May 24, 2006 1:01:38 AM

Posted May 22, 2006 in Venture Capital and Technology

Comments

id argue that something along those lines can beat linkedin.

Posted by: anonymous | May 22, 2006 9:12:06 AM

Mixi is the counter-argument, at least for Japan. It's a wildly successful social network, invite only, with all it's content behind the wall.

Posted by: Chris Palmieri | May 22, 2006 9:45:52 AM

a weird post fred -->

inviting friends is the very definition of social network - % growth through WOM only should be the primary KPI for any social networking site - these guys are probably the only ones who can measure it.

Posted by: david g | May 22, 2006 11:01:07 AM

david

i am sorry that i didn't explain more in the post. i was rushing this morning.

it's not just that you have to be invited.

you have to be invited by a special member:

Invitations are difficult to come by: only some members have the right to invite friends to join. According to Erik Wachtmeister, the site's founder and the son of a former Swedish ambassador to the United States, a panel considers 12 to 15 variables before permitting certain users to issue invitations.

"You don't want to let just anyone invite," Mr. Wachtmeister said. Asked what those variables were, he replied that it's a "secret sauce."

This is a velvet rope social network.

it will be interesting to see if it works.

fred

Posted by: fred | May 22, 2006 11:09:22 AM

Fred - glad you explained more here was just going to say that gmail and orkut worked on exactly this principle!

I don't buy into your "abundance" posts, either I have misunderstood your message or you are wrong... but enjoy your blog.

Posted by: Andrew | May 22, 2006 12:48:04 PM

Fred - I think that the rules of abundance/scarcity still work fairly well in the 'net.

This invite-by-committe-only deal is probably going to work OK - it's like a country club or a really restrictive version of Facebook I guess.

I think the problem with "net abundance = value" is that it's only true for consumable media and networks whose value increases as they do. Being part of a club (i.e. gmail, facebook) is still only cool if it's exclusive. That's human nature.

Posted by: Jason | May 22, 2006 4:36:31 PM

How about those web 2.0 "invite only/ apply thought your favorite blogger/ give us your email address" alpha's?

Web 2.0 launch techniques is all about reducing supply (ie creating scarcity)

It seems to work as far as getting TechCrunch all worked up over it and thus get some air time. . .

Posted by: will | May 22, 2006 4:48:16 PM

Yes-- this is exactly how not to be abundant.

And likely how not to attract top-tier VC backing.

But not necessarily how not to succeed.

Depends what you mean by "seeing if this works". *I* don't want to live in a gated community, and neither do you. I probably don't want to invest in one, and neither do you. But I'll bet there already exists and will exist smaller worlds that will do well for the founders and members, albeit without a traditional venture-to-big-bang exit. (I mean 'bet' figuratively as I just said I wouldn't be investing).

This one doesn't at first glance look like a winner (unless it's aimed at Disney employees, given the name). But we might see some private clubs pop up and succeed where some folks will be attracted by the exclusivity, and the closedness may serve some purposes (in an intranet sort of way?).

-Ken

Posted by: Ken Berger | May 22, 2006 4:50:35 PM

i think this model makes for a great business. these gated networks create an excellent demographic to give to advertisers, not to mention classifieds, etc. i bet they can make a lot of money.

Posted by: anonymous | May 22, 2006 5:49:42 PM

Fred: Seems to me you were extolling the Times' web site a week or so ago.

This is yet more evidence, I think, that the Times doesn't "get it" and that your prior analysis was incorrect.

The Times seems a sinking ship.

Posted by: Dave | May 22, 2006 6:07:24 PM

dave,

you are correct that i am impressed by the times and the reach they have acquired using the internet. but i am not a fan of times select and have criticized it often and vocally on this blog.

i do not believe in walls of any kind on the internet. i think they are value subtracting.

Fred

Posted by: fred | May 22, 2006 6:59:22 PM

fred,

i agree that in general they are value subtracting... to an extent. take cellphones and carriers for example (ok, bad example, but i hope you understand what i am getting at). i may get better service with verizon in my area, and you may find cingular more useful. however, this doesn't stop me from contacting you. the same applies for email. walled gardens have their advantages, as long as they don't prohibit interaction across networks.

Posted by: anonymous | May 22, 2006 7:13:41 PM

their CEO's comment: We want a million memebers, the right million.

Someone's line about not wanting to be a memeber in any club that would have them.

Posted by: Tom Labus | May 23, 2006 8:16:20 AM

Hi Fred,

I have been a member of aSmallWorld for 2 years, and always had a lot of fun with it, meeting a lot of interesting people and getting to some great parties. In fact, I contacted other members or left a message saying I was in town while travelling in Europe, Asia, LatAm, US etc and always had a blast.

Sure, it is elitist, you are not likely to find anyone who isn´t "old money", it´s really Eurocentric (in Italy we used to joke that looking up on aSW, you could find whoever member of the private school you had attended), and it´s geared toward a younger and partying crowd, but it´s by far the most useful and fun social network I ever used.

ANd it´s not so small either... about 50000 members, and new users have been blocked for a few months now, so no one can join for a while.

My thoughts: not anyone would enjoy it, but if you have a certain background and interests, you will like it. I lost count of the number of nights "saved" by pinging aSW while travelling on business... always met great people, never went to bed before dawn. Eheh.

Cheers,
Giordano

Posted by: Giordano | May 23, 2006 8:47:02 AM

Amen to that! A blogger friend of mine had a brief fling with Xanga. Like Myspace, you have to be a member just to leave comments! I got a free membership just to be able to leave comments on his site, but in short order I stopped leaving comments because I didn't like having to sign in and then I stopped reading his blog altogether.

Posted by: K T Cat | May 23, 2006 11:41:35 AM

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