The Next Billion-Dollar Consumer Startup: Vertical Social Networks and Prioritization for Success

The Next Billion-Dollar Consumer Startup: Vertical Social Networks and Prioritization for Success

In today's digital landscape, where swiping and liking static content has become tiresome, many users are seeking more curated and meaningful connections through social networks. They want digital experiences that align with their online and offline interests. This growing fatigue around traditional social media platforms presents a unique opportunity for the next group of billion-dollar consumer companies: vertical social networks.

Vertical social networks are platforms that cater to specific interests or industries, allowing users to share content that they can't post elsewhere. These platforms have the potential to provide users with more targeted and enriching experiences, enhancing their status within their existing networks. Think of platforms like LinkedIn, Clubhouse, and Quora, which have gained popularity by focusing on specific verticals and providing users with valuable tools and connections.

Even for platforms that don't specifically target Gen Zers, the chance to build a following, whether personally or professionally, is often a strong incentive for users to join a new network. The allure of being part of a community that holds all the important data related to their profile and interactions encourages frequent engagement and makes it harder for users to churn. This concept of a "System of Record" creates a sense of belonging and investment in the platform.

The emergence of new devices and advancements in technology also contribute to the potential success of vertical social networks. These new devices provide users with more opportunities to be "present" on social products, opening doors for new networks to thrive. Additionally, advancements in functionality can enable new types of content, which in turn can become the launching point for a new social network. For example, Snapchat's success can be attributed in part to its introduction of AR filters, which expanded its user base beyond high school students.

Another aspect that can contribute to the success of vertical social networks is the ability to "unbundle" existing platforms. YouTube, for instance, serves all types of content, but there is a significant opportunity to create products with killer features for specific categories. By focusing on niche interests and providing tailored features, these vertical social networks can attract dedicated users who are seeking a more specialized and immersive experience.

While vertical social networks have the potential to become the next billion-dollar consumer startups, success hinges on effective prioritization. Prioritization is not just about value; it's about confidence. By clearly defining your product strategy, you can make prioritization easier and more effective.

To understand value in a less ambiguous way, it's essential to focus on outcomes. Articulating value in terms of measurable changes in customer behavior that generate business value provides a clearer understanding of what needs to be prioritized. By listing out the biggest opportunities or problems with your product and overlaying them with your organization's strategy, you can identify the intersection that should be your primary focus. This alignment of solving the right customer problems to drive product outcomes creates a strong product strategy.

Instead of fixating on a ranked idea list, product teams should prioritize opportunities rather than solutions. Starting with the desired outcome you want to achieve and then working backward allows you to focus on opportunities that align with your strategy. The tighter your product strategy, the easier it becomes to define and prioritize only those opportunities that will lead to the desired outcomes.

Increasing confidence is another crucial aspect of prioritization. Rather than solely focusing on value, shift your thinking to how confident you are in solving the desired outcomes. This confidence-building process requires getting out of the building and speaking with customers. Discovery becomes a journey of gaining confidence, narrowing down problem spaces, and converging on the best solutions. By de-risking through gaining confidence in your bets, you can prioritize effectively.

In conclusion, the next billion-dollar consumer startup has the potential to be a vertical social network. These networks can tap into users' desire for more curated and meaningful connections based on their interests. However, success hinges on effective prioritization. By aligning product strategy with desired outcomes, prioritizing opportunities over solutions, and focusing on gaining confidence, startups can increase their chances of becoming the next big thing in the social media landscape.

Actionable Advice:

1. Define your product strategy by identifying the intersection of customer pain points/opportunities and your organization's strategy. This will guide your prioritization efforts and ensure you focus on solving the right customer problems.
2. Prioritize opportunities, not solutions. Start with the desired outcomes you want to achieve and work backward. This will help you identify and prioritize opportunities that align with your strategy and lead to the desired outcomes.
3. Increase your confidence by getting out of the building and speaking with customers. Discovery is a confidence-building process. By gaining confidence in your solutions through customer feedback, you can effectively prioritize and de-risk your product bets.

Remember, the next billion-dollar consumer startup could be a vertical social network, and effective prioritization is the key to success.