An interesting article about social network published at the end of 2014 on Forbes, one of the most famous and respected business magazines of the World, contains some useful information for entrepreneurs and startups.
The article, written by Freddie Dawson is entitled How to create a social network that makes money. This title can look a bit click-baiting for a magazine like Forbes but it gives what the title promises. We want to add some comment to make it easier and faster to understand.
Dawson talks about profitable social networks and how they are built and he is not talking about Facebook growing, Twitter rising, Pinterest funding, Google’s social network experiments and past failures but about WAYN (Where Are You Now?).
This social network has 22 million users from all over the world with 50% of traffic coming from USA, India, UK, Italy, Canada and Spain. The site was voted best community for 7 years (last time in 2014) at the Website of the Year Awards. But what is WAYN? It’s a travel community born in 2002 that introduced with time a lot of social network features. WAYN was able to corner a part of the market, facing changes as they came and adapting, remaining always on the top of its niche. WAYN is the most successful niche-oriented social network and it was successful even before “general” social networks became mainstream.
According to Dawson’s article, the key for social networks success is to have an idea of how it will be able to earn money. Although obvious, it is the hard truth. We hear every day how important it is to find a good niche in the market that has not been filled or a niche where you are convinced you can do better than one already there. It is not enough to have the idea and the passion, you also need to have ideas of how your social will make money. This is the little detail, the obvious part that many people forget to prioritize.
WAYN found a good niche, spoiled people in that niche, always improving user experience and maximizing profits (advertisements from businesses in the industry, charges on booking services, etc.). A commercial mindset is vital.
So if you are going to create a social network or a start up with a large social element, always keep in mind the revenue streams: There may very well be a place for you in the market but is highly likely that someone else is also looking to fill that place too. The key to success is to have a plan (and maybe more than just one plan) of how to monetize your social network.