In 2004, Marc Andreessen (!) and Gina Bianchini founded Ning. Ning was born to enable anyone on the internet to build one’s own social network (think Wix for Social Networks). The same year, Facebook was born in Zuckerberg's dorm room.

The question then was: Would Internet Social be centralized or decentralized? Will there be one big winner or the multiplication of smaller-scale communities? Both companies started off pretty well: Ning raised US$119m in four years and Facebook got rapidly seeded by Accel and Peter Thiel.

But they did not end up with the same trajectory. Mark Zuckerberg was right, Marc Andreessen was wrong. Internet Social will be centralized around a few massive players. In 2011, Ning was bought by Glam Media for US$150m - a little more than what they had raised. Facebook was then valued at $52 billion.

The 2000-2020 internet social has been dominated by a handful of players: Facebook, Twitter, Pinterest, Instagram. Yet will it remain exactly as it is ? Most likely no. The Internet Social landscape is undergoing a major change: Decentralization. Momentum is shifting from internet giants to micro-communities. And even Mark Zuckerberg is amongst the many excited about this:

Facebook's momentum is behind (hours per week per user on Facebook is -26% since 2017 & Facebook NPS is -21%). And while it is certainly not dead, the 2020s will inevitably see the rise of new social products. Let's look at the different opportunities that come with the unbundling of internet social.

There are infinite places where social interactions happen online. Any comment feature is a social component; any forum is a social network. But still, there are social gravity centers where users come to connect, share, interact. Those are of two categories: Vertical Social Networks (VSN) and Communities.

Vertical Social Networks

Vertical Social Networks are social networks for a specific group of people sharing similar interests or objectives. They are rarely solely social networks - they are often connected to proprietary products or services serving the targeted niche. Vertical Social Networks own their platform. Some examples:

Communities

Communities live wherever on the internet an audience has become extremely engaged and participative. A Facebook group is a community, Subreddits too. Communities erupt organically and rarely own their platform. As opposed to VSN, monetization is not always implied.

The next $1B consumer startup will be a vertical social network say CRV's famous twins and investors Justine & Olivia Moore. And they are not the only ones. In the tech world, we see vertical social networks getting funded again after a decade of scarcity. In Europe, Peanut - vertical social network for mums - has raised $17m with some of the best investors out there: Index Ventures, EQT & Partech.

There are only two ways to make money : bundling and unbundling. The 2010 decade has seen marketplaces being unbundled, now come Social Networks. A good start to identify underserved niche user groups is to look at those already living off big platforms. If your heart is consumer, look at Reddit. If you prefer professional networks, look at LinkedIn.

Greg Isenberg has been building online communities for almost a decade. He pulled out a Guide to Unbundle Reddit (works for LinkedIn too):

European founders, there is a also a massive opportunity in unbundling Reddit and LinkedIn geographically:

If you bootstrap a network, you will face the chicken and egg problem: users because there are other users. So how to attract your first ones when your network is empty?

In 2015, Chris Dixon published his famous Come for the Tool, Stay for the Network article:

“The idea is to initially attract users with a single-player tool and then, over time, get them to participate in a network. The tool helps get to initial critical mass. The network creates the long term value for users, and defensibility for the company.”

In a nutshell, you build a single-player tool to attract first users, then you go multi-players. Early-adopters come to use the tool, and then, as more people use the tool, a network emerges. This is a proven playbook that solves the cold-start problem not only for social networks, but also for SaaS and Marketplaces (Lenny Rachitsky wrote about how marketplaces such as OpenTable and Eventbrite used this technique).

Some examples of Vertical Social Networks that used this technique:

Note two things:

Strava is a perfect illustration of both Vertical Social Network and the Come for the Tool, Stay for the Network. It is both single-player (set personal goals, track your runs) and multi-players (post pictures, send kudos). There are many more Stravas to be built in different verticals.

Some Strava for X ideas found on Twitter:

And the list goes on ! The best ideas here are those who are:

Communities are niche audiences whose centers of gravity moved from the creator and towards their followers. As soon as an audience perceives value from fellow audience members, a community is born. This is usually gradual and organic, and for this reason there is no clear playbook on how to do it. Communities take so many different shapes and forms that any definition is useless. More interesting is to look at what Communities can be:

• Communities can be venture businesses. When Emily Weiss started her blog Into the Gloss, she was not planning to raise a $100m Series D at $1bn+ valuation five years later. Her blog turned into a community, then into a beauty brand, Glossier. This is an amazing story that I suspect will be repeated.
• Communities can get acquired. In 2017, Indie Hackers - a community of internet businesses founders - got acquired by Stripe.
• Top Creators Make a lot. Ben Thompson is making $3M a year with his tech strategy blog Stratechery. Tim Ferris’ podcast generates $5M-$6M a year.
• Most communities exist across platforms. There is a big misconception that Community Creators are either Youtubers, or Podcasters, or Bloggers. Yet the vast majority of Creators use various medias and platforms to engage their community.
• Communities are not only online. On Deck started as IRL dinners in SF. The Wing is a 10,000 women-focused online and IRL community backed by Sequoia.
• Slack, Discord, Whatsapp & Telegram are major community hubs. Sarah Nöckel hosts Femstreet - a community for women in tech and VC - on Slack. She has more than 1,000 members paying $100 a year for access.
• The more niche the better. There is no such thing as too niche when it comes to Communities.

Here is probably where everything starts: ad-driven platforms (Facebook, Instagram, Youtube) only reward top creators. Mid and small-size creators are left out - no matter how engaged their audience is. Long story short, mid and small-size creators desperately need new tools to engage and monetize their community.

Hours per week per user on Facebook is -26% since 2017, Facebook NPS is -21%: that says it all. Users expect and deserve more from online social interactions.

Social Networks have become more media platforms than community platforms. They are not designed to make strangers connect. There is a clear need for safer, more intimate online places. This is where companies like Cocoon - a private app for relatives and close friends - come into play.

The Rise of the Creator is an expression that comes back a lot. Actually, there is nothing new in people creating online. What is new though is the fact those people feel legitimate enough to ask to be paid. Platforms like Twitch helped a great deal in democratizing that. After witnessing almost two decades of creators producing high-quality content for free, people understand it's time to pay. Creators are now legitimate... and armed !

Creator tools abound. Yet it's relatively new. Commsor, a community data software, produced the most extensive mapping of community tools: they found out 60% of the tools are less than 3 years old. It has never been easier for creators to create, distribute and monetize content. Rebels are armed.

In 2014, Patreon was growing fast. Creators flooded the platform and 'Patrons' (= donors) followed: founder Jack Conte's bet of making creators adopt the membership model proved successful. As more creators launched Patreons pages, those pages were increasingly promoted on other platforms, thus driving more 'Patrons', of which a fraction would in turn become creators. The flywheel was rolling:

Borrowed from https://brianbalfour.com/essays/patreon-onboarding-growth

Patreon then made an interesting move: they started promoting other Creators on an artist's page. They sought to become an end-user destination media platform to discover new Creators. They started to push content consumption rather than creator profiles. Patreon entered the discovery business.

Yet, it didn't work. The first obvious reason is that it generated strong discontent among content creators. It's easy to see why an artist would be unhappy to see their super-fans awkwardly redirected to other Creators’ pages (possibly competitors).

In fact, Creator tools rarely succeed in the Discovery business. But why ?

Discovery is a fascinating topic that is extremely difficult to nail in any industry. Countless failed start-ups attempted to enable Discovery in the Travel industry. Shopify has tried 4 times to step in the Discovery business with no success. Discovery in Communities and the Passion Economy makes no exception.

Very recently, Teachable - a leading EdTech start-up - announced its move towards discovery. Teachable enables anyone to teach about anything. This stellar company has been bought just before COVID hit by the Brazilian giant Hotmart for a reported $250m (total funding amount was $12.5m).

In October 2019, they launched Discover by Teachable: a marketplace of online classes on Teachable. This is a very interesting move as Teachable's focus has always been on the course creator, not on the end customer. Founder and CEO Ankur Nagpal makes it very clear during interviews that they are a Creators Tool, not a destination platform. It is certainly too soon to analyze results. But this is a big and interesting bet Nagpal and his team are willing to take: building a Udemy of Creators Courses !

All-in-one Community Platforms is one of the most exciting opportunities in Creators Tools. It is about providing Creators with a private space they own for their community. Think Community-as-a-Service. 

The two startups I find most promising in that sphere are Circle & Geneva. Interestingly, they have wildly different approaches: Circle is white label and asynchronous while Geneva is co-branded and chat-based. Put simply, Circle is Shopify for communities, Geneva is Slack for communities. Yet, both companies share a great deal more than seems at first: a stellar founding team, exceptional investors and NYC.

Another interesting trend is the emergence of Product Studios dedicated to Creator Tools and Communities. This reflects the fact there are still so many tools to be built to help Creators create, distribute and monetize content. And as some of those tools are easy to build yet not venture compatible, an interesting model to address those opportunities is the Product Studio one. Two examples:

The Creator Economy and the Unbundling of Internet Social is truly about making the internet a more humane and intimate place. It is so exciting to watch people building tools enabling people to share their passion, connect with others, and live off it. What we really witness is a meta-trend that impacts a wide range of industries (media, education, social networks) for the better.

There are many more interesting things still to write on this topic. Some ideas for you and me:

I might write on these topics but you can too ! Or we can work on it together ! Anyways, I love the intellectual stimulation of collaboration, so feel welcome to pop into my Twitter DMs or email (ariel.renous@gmail.com)