The Next $1B Consumer Startup: Vertical Social Networks and Building Better Online Communities

The Next $1B Consumer Startup: Vertical Social Networks and Building Better Online Communities

In today's digital landscape, there is a growing fatigue around swiping and liking static content. Users are craving more curated and meaningful connections, as well as digital experiences based on their online and offline interests. This is where the next group of billion-dollar consumer companies can thrive: vertical social networks. These platforms enable users to share content that they can't post elsewhere, providing them with a unique value proposition.

One key aspect of successful vertical social networks is providing users with the best tools to enhance their status within their existing network. Platforms like LinkedIn, Clubhouse, and Quora have capitalized on this by giving users the ability to build a following, whether it's for personal or professional reasons. This creates a strong incentive for individuals to join these new networks and actively engage with the community.

Moreover, these vertical social networks act as a "System of Record" for users, holding all the important data related to their profiles and interactions within the community. This not only encourages frequent engagement on the platform but also makes it harder for users to churn. By creating a comprehensive ecosystem that caters to the needs and desires of its users, a vertical social network can establish itself as the go-to platform for a specific niche or interest group.

The emergence of new devices and advancements in technology also play a crucial role in the success of vertical social networks. When new devices are introduced, they expand the amount of time and ways in which we can be "present" on social products. This creates opportunities for new networks to thrive and engage users in unique ways. Additionally, these devices often enable new types of content, which can act as a launching point for a new social network. For example, AR filters were a significant factor in Snap's success as they attracted users beyond their initial high school student user base.

Unbundling is another strategy that can lead to the success of vertical social networks. While platforms like YouTube serve all types of content, there is a significant opportunity to build products with killer features for specific categories. By focusing on a particular niche and delivering tailored experiences, these networks can attract a dedicated user base and differentiate themselves from broader platforms.

Transitioning to the topic of online communities, it is essential to understand why most of them fail and how to build a better one. Psychology tells us that if we can get someone to buy into something, they are much more likely to stick with it. Avoiding cognitive dissonance is key. To build a thriving community, it is crucial to get members to buy into the community's purpose and values. This ensures that the community is comprised of positive contributors rather than individuals solely focused on self-promotion or tapping into the audience for personal gain.