May’s issue of Fast Company had a great article about the genius of Ning.com’s business model. Ning.com allows people to create entire social networks (their own Facebook, MySpace, etc.) on any topic they wish, from Lost to theater to Brad Pitt to sewing to football to …
Well, you get the point.
One genius of Ning’s model is compound growth in membership spurred on by the owners of each individual social network.
This is how I explain it to myself: Ning is very similar to a mall, where each social network is like a store built around a common interest. The owner of the store is responsible for recruiting his or her own members — friends, family, even perfect strangers. And each member may recruit others as well.
But not only that. The customers of one store may just decide to start their own — with a member of a Brad Pitt network starting an Angelina Jolie network.
The store owners build their own stores, serve their own customers, and lots and lots of people join “the mall” of Ning.
However, lots of people does not always equal a lot of money.
And that’s another genius of ning, for ning is following the path of what people have come to expect from Google, the leader of all things Internet advertising. The company is only doing targeted advertising, with a skiing network receiving ads about skiing. Also, Ning started with the advertising from the very beginning, which should prevent a backlash from their customer base.
The article did not mention Meetup.com in their list of companies with similar business models. Meetup is built on a similar idea, except instead of meeting only in cyberspace, the goal is for members to meet offline. Each of the groups are locally-based, with “store-owners” recruiting people with common interests to meet and pursue those interests in a traditional social atmosphere.
Perhaps that’s the subject of another blog …