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The “del.icio.us Lesson” – personal value precedes network value

Vecosys pointed me to this post on bokardo.com which mostly talks about Structured Blogging – but which half way down describes the “Del.icio.us Lesson”:

This is the lesson that personal value precedes network value: that selfish use comes before shared use.  We’re seeing it more and more in everyday services like Del.icio.us and Flickr….even though we’re definitely benefitting from the value of networked software, we’re still not doing so unless the software is valuable to us on a personal level first.

Put like this the point seems blindingly obvious – but it encapsulates why getting to critical mass for many consumer internet plays is such a different game to growing after that point.

Pre-critical mass there is no natural network value, so your entire value proposition can only be about personal value.  That worked fine for Del.icio.us and Flickr because storing bookmarks and photos gives a lot of personal value – it doesn’t work for e.g. review sites, because until there is a critical mass of reviews there is not much value to the consumer.

I have blogged before about getting a consumer internet service to critical mass - some sites are more naturally viral than others – now the Delicious Lesson reminds us that sites which offer good personal value are also in a good position.  If you don’t have either of those things then you need to find ways to beg, borrow and steal your first hundred thousand users.

  • http://www.greatapps.blogspot.com John Wilson

    Nick, I too am fascinated by what I called “crowd dependent” sites i.e. those whose value to the customer increases as the crowd increase and the challenge in attracting early pioneers when little or no value exists e.g skype, Exchanges.

    http://www.greatapps.blogspot.com/2007/01/ill-use-it-if-you-will.html

    From an investor point of view it’s a heck of a bet if you can get it right, but we all know how many more casualties this route has versus those solely focussed on personal value, where the rewards may be lower.

  • http://www.greatapps.blogspot.com John Wilson

    Nick, I too am fascinated by what I called “crowd dependent” sites i.e. those whose value to the customer increases as the crowd increase and the challenge in attracting early pioneers when little or no value exists e.g skype, Exchanges.

    http://www.greatapps.blogspot.com/2007/01/ill-use-it-if-you-will.html

    From an investor point of view it’s a heck of a bet if you can get it right, but we all know how many more casualties this route has versus those solely focussed on personal value, where the rewards may be lower.

  • nic

    Thanks John,

    I agree – the big plays are ones where there is a network effect – as an investor my feeling is that to invest in those companies pre-critical mass (and simply waiting for critical mass is one option) you need to have a very clear understanding how they are going to get there.

  • nic

    Thanks John,

    I agree – the big plays are ones where there is a network effect – as an investor my feeling is that to invest in those companies pre-critical mass (and simply waiting for critical mass is one option) you need to have a very clear understanding how they are going to get there.

  • http://www.leafar.eu leafar

    Dear Nic,
    I completly agree with personal value before Network value. And the example of tagging is excellent (thanks for the link). I think tagging is for personal use = organize. Then you can use it for Network value (Tagging will be available in 2 weeks on U.[lik] and i think we came with a pretty good solution).
    Always happy when you digg stuff in this space.

    Have seen the flixster deal?

  • http://www.leafar.eu leafar

    Dear Nic,
    I completly agree with personal value before Network value. And the example of tagging is excellent (thanks for the link). I think tagging is for personal use = organize. Then you can use it for Network value (Tagging will be available in 2 weeks on U.[lik] and i think we came with a pretty good solution).
    Always happy when you digg stuff in this space.

    Have seen the flixster deal?