The next $1B consumer startup will be a vertical social network — here’s why

The next $1B consumer startup will be a vertical social network — here’s why

In today's digital landscape, where swiping and liking static content has become tiresome for many users, there is a growing demand for more curated and meaningful connections. Users are seeking digital experiences that cater to their specific interests, both online and offline. This is where vertical social networks come into play, offering platforms that enable users to share content that they can't post elsewhere. By focusing on a specific niche or interest, these networks can provide a more tailored and engaging experience for their users.

One key factor in the success of vertical social networks is the ability to provide the best tools for users. Even if a platform isn't the first or only place to post a certain type of content, it can still thrive by offering superior features and functionality. For example, platforms like LinkedIn, Clubhouse, and Quora have gained popularity by providing users with unique ways to enhance their status within their existing network. This incentive to build a following, whether personally or professionally, often drives users to join new networks and engage with them frequently.

Another advantage of vertical social networks is their ability to serve as a "System of Record." These networks hold all the important data related to a user's profile and interactions within the community. This not only encourages frequent engagement but also makes it harder for users to leave the platform. By becoming the go-to destination for a specific interest or niche, these networks can establish themselves as the primary source of information and connections for their users.

The introduction of new devices often creates opportunities for the emergence of new social networks. As technology evolves, it expands the amount of time and ways in which we can be "present" on social products. This opens doors for new networks to capitalize on these advancements and provide unique experiences. Additionally, new devices or step changes in functionality can enable the creation of new types of content, which can serve as the launching point for a new social network. For instance, AR filters played a significant role in Snap's success, allowing the platform to expand beyond its initial user base of high school students.

Unbundling is another strategy that can lead to the success of vertical social networks. Platforms like YouTube have to serve all types of content, which can sometimes dilute the user experience. By building products with killer features for specific categories, there is an opportunity to "unbundle" platforms like YouTube and offer a more focused and tailored experience for users. This can attract users who are looking for a more specialized and curated content consumption.

In a talk at Startup School 2012, Tom Preston Werner emphasized the importance of design, focus, and optimizing for happiness. Design plays a crucial role in the success of a product, as every addition dilutes the overall experience. Therefore, it is essential to prioritize focus over adding unnecessary features. Moreover, optimizing for happiness should be a core goal for any startup. The aim should be to create more happiness in the world for customers, members, and shareholders. By aligning people, product, and philosophy, startups can create a strong foundation for success.

In conclusion, the next wave of billion-dollar consumer startups is likely to be vertical social networks. These networks offer curated and meaningful connections, cater to specific interests, and provide unique tools and features. By focusing on niche markets and leveraging new devices and functionalities, these networks can stand out in a crowded digital landscape. Additionally, unbundling existing platforms and optimizing for happiness can further drive the success of these networks. As the digital landscape continues to evolve, vertical social networks have the potential to reshape the way we connect and engage online.

Actionable advice:

1. Identify a specific niche or interest that is underserved in the current social media landscape. Build a vertical social network that caters to this niche, offering curated content and unique features that enhance the user experience.
2. Prioritize design and focus in the development of your platform. Every addition should be carefully considered to avoid diluting the overall product. Focus on providing the best tools and features that differentiate your network from existing platforms.
3. Optimize for happiness by aligning people, product, and philosophy. Ensure that your startup's mission is centered around creating more happiness in the world for your customers, members, and shareholders. This focus on happiness will drive user engagement and loyalty.

By following these actionable advice and leveraging the opportunities presented by new devices and functionalities, the next billion-dollar consumer startup could be a vertical social network that revolutionizes the way we connect and engage online.