The Power of Networks: Lessons from Failed Companies and Successful Social Media Platforms


Hatched by Glasp

Sep 12, 2023

3 min read


The Power of Networks: Lessons from Failed Companies and Successful Social Media Platforms


In the digital age, the success of businesses and social media platforms heavily relies on their ability to harness the power of networks. This article delves into the reasons behind the failure of Otsuka Furniture, a high-end tangible goods retailer, and explores the significance of networks in the context of various social media platforms such as Twitter, Instagram, Vine, Snapchat, and Facebook. By examining these examples, we can uncover valuable insights about the importance of understanding and leveraging the core asset of a network to drive success.

The Failure of Otsuka Furniture:

"「なぜ大塚家具は失敗したのか」お客は安ければ喜ぶワケではない そのモデルは「家具屋」ではない". This headline highlights the failure of Otsuka Furniture, emphasizing that customers are not solely driven by low prices but rather seek value and a unique experience. Otsuka Furniture's downfall stems from its failure to recognize that it was not just a furniture store, but a high-end tangible goods retailer that needed to create a distinct identity and cater to the desires of its target market.

The Network's Role in Social Media Platforms:

When examining successful social media platforms, it becomes evident that the core asset lies in the network itself. Twitter, for example, is an elegant public messaging protocol that enables users to quickly share their thoughts with a global audience. However, its early users often treat the 140-character limit as a sacred rule. Twitter needs to recognize that its true strength lies in the efficient exchange of information within its network.

Instagram, on the other hand, is primarily a platform for sharing visual content. Despite the introduction of videos and changes in aspect ratios, the core value of Instagram remains its ability to facilitate the easy sharing of visual content and receiving feedback from others. Users have innovatively integrated videos into the platform, showcasing how the network itself is the true driving force behind user-generated innovation.

The Unique Constraints of Vine and Snapchat:

Unlike other platforms, Vine and Snapchat have distinct content creation limits that are intrinsically linked to their networks. Vine's six-second limit for video content imposes a linear attention cost on viewers, forcing creators to adopt a specific pacing and storytelling style. Snapchat's initial ten-second limit on video length was eventually expanded to accommodate longer stories, demonstrating that these platforms understand the power of their networks and are willing to evolve accordingly.

Facebook's Recognition of the Network's Value:

Facebook has long recognized that its chief asset is its graph, or the interconnection of its users. Understanding this early on has allowed Facebook to prioritize network development and expansion. While some companies fear the negative reactions of their early adopters, Facebook has embraced change and capitalized on the potential of its network.

Actionable Advice:

  • 1. Recognize the core asset: Businesses and social media platforms should understand that the network itself is their most valuable asset. Focusing on network development and efficiency can lead to long-term success.
  • 2. Embrace innovation: Companies should not be afraid to make changes that seem heretical to user expectations. By evolving and adapting to the needs of the network, businesses can achieve self-awareness and growth.
  • 3. Understand user motivations: It is essential to go beyond surface-level features and understand what truly drives users to engage with a platform or brand. By catering to these motivations, companies can create a unique and valuable user experience.


The failure of Otsuka Furniture and the success of various social media platforms highlight the importance of recognizing and leveraging the power of networks. By understanding the core asset of a network, businesses can adapt, innovate, and create a unique user experience that drives long-term success. Embracing change, focusing on network development, and understanding user motivations are key drivers in harnessing the power of networks and capitalizing on the potential of the digital age.

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