Social saturation

The talk below from Forrester CEO George Colony was perhaps the most interesting one I saw at Le Web last week.  He had two big points to make:

  1. Web service/application architectures will shift to more local processing and storage.  This is a natural result of the fact that processor and storage technologies are improving faster than networks. 
  2. Social networks are so well penetrated now that there is little room to grow – that includes penetration into the population and hours spent per day by the active users.

I want to focus on the second of these today.  Both have been bouncing round my mind since I saw the presentation on Thursday, but I think the second is more topical.  Firstly it was the subject of debate on Fred Wilson’s from yesterday, and secondly it is more pertinent to the activity of most of the readers of this blog – as entrepreneurs, investors and consumers.

My first reaction to the argument that social is close to saturation point made sense to me, and most of the people I spoke to about it at the conference afterwards agreed.  The reasoning is logical and comes from research Forrester conducted research with over 1m US consumers which found that ‘social is running out of hours and people’.  Taking the hours piece first – people are spending more time on social than they are volunteering, praying, emailing and using telephones, and more than they are exercising, and only a little bit less than shopping and childcare.  His argument is that people simply don’t have much more time to give to social.  The second piece of the argument is that at around 80% in the developed world social is already so well penetrated that growth can’t come from adding new users either.

Colony’s conclusion from this is not that social will go away, but that the next generation of social apps will be about doing things more efficiently and saving time.  That contrasts with many of the current crop of social apps where the use case is often killing time.

Fred Wilson posted the video below yesterday and invited debate in the comments of his post.  Many commenters were simply outright critical of Colony, but several drew the distinction between social as an app, which might be peaking, and social as a platform, which is only just getting started, and this I think probably hits the nail on the head.  Applications are where people spend time, platforms are where things happen.  There might not be much time left in the day for all of us to spend much more time in social apps, but we can all increase our engagement with social by using the platform components more – that means hitting more like buttons, sharing more generally, connecting more sites to Facebook and Twitter, and using social more to help discover online content and interact with the brands and companies we love.

This might have been what Colony meant when he said the next generation of social services will be about driving efficiency.


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  • Great thoughts on this! To push the thinking a little further, I think that social services can still grow by adding the number of connections (connecting more people, realizing more ways the same pair of persons can be connected) and makes those connections more valuable. 

    For example, while big social networks like Facebook and LinkedIn are growing more and more global, the immediate social circles around a Facebook member is still predominantly regional (as with Facebook), or industry-based (as with LinkedIn). The first observation is what I recalled from a recent analysis of the social connections on Facebook, and the second one is just my observations of the LinkedIn stats over time. I still dont see people in different countries (especially different cultures) really interacting with each other, really forming strong connections that transcend the cultural and regional barriers, despite the availability of the tools and the ease of connection via those social networks.

    And perhaps the number of connections are not growing is precisely because the social tools are not efficient enough, thus creating a limit on the number of social connections a person can handle. 

    Secondly, social networks are just beginning to realize values of social connections beyond entertainment, socialization (for consumers), and advertisement/branding (for businesses). Only LinkedIn is somewhat ahead in the sense that people regularly use LinkedIn to do business and to realize the value of their connections. The problem here is that business is still conducted outside of the social networks. I wrote before about how LinkedIn, when integrated with an easy to use web-based business software suite (like Google Apps), can be of tremendous values to small businesses. Similarly, Chatter and Yammer, it’s competitor, are utilizing the social network paradigm to change the ways employees work together. I would love to see integrated with LinkedIn, so that global trading partners can connect, trade and communicate with each other seamlessly and securely. Hopefully that will happen soon..

  • Thanks for the comment.

    I would draw a distinction between social as entertainment and social as a productivity tool. There is much more room for the latter, but as you say we will need more efficient tools to unlock the potential here.

  • Gordon Guthrie

    I saw all the tweets about it and marked it down as a must watch video.

    From the commentary you would guess he only talked about social, but he said three separate things, all of which interested me.

    I think he is right on social. At the Scottish Lean Circle we get people to go exercises on existing companies – and when you do Porter’s Competitive Advantage stuff on Facebook the threat is always a substitute product that consumes the users time. Anecdotally that has been true that friends are leaving Facebook for something else that takes their time.

    Interestingly the (nearly) 14 year old says just last night “can I get a Twitter?” – having been Facebook daft like every other teenager in the town. Under questioning he said that everyone was switching – like a flock of starlings. Facebook was just becoming ‘the old thing’ and taking up too much time. (The plural of anecdote isn’t data, YMMV, the price of shares can go up or down, yada-yada).

    The third thing he talked about, collaborative/social working in the enterprise but ‘better than sharepoint which is not loved’ is, obviously, right up our street at Hypernumbers.

    When I was with BT Global Services we had a big sharepoint practice which we were supposed to push onto punters. We never used it ourselves because it was a big, big pain. That’s a huge, very nascent market and (from experience) the barriers to using cloud products in the enterprise are a lot lower than I expected.

    The first part about processing power particularly made me laugh as I was a Cray XMP programmer in 1986 and whenever the troops bang on about performance (or premature optimisation as it is better known) I point out that:
    * the servers we used at in the bubble cost £1.5m the pair as opposed to renting them from £200 a month like we do now
    * I used to programme a Cray/iPhone back in the day and I had an allocation of 25 mins CPU time per year

    Needless to say they give me dogs abuse for being an old fart, Grandpa…

    Nonetheless the oomph that you see in Javascript for instance is amazing compared to what it used to be even three years ago. I think he is right about the client consuming more computation versus the cloud, but the problem with apps is that they are intrinsically not networked. What makes the web profoundly different to an application is the link tag. I can understand that there will be immersive applications but you can’t ‘link in’ to an app whereas you can always link out of an app into a browser. You can ‘drive by’ a webpage but you can’t drive-by an app – you commit to an app – it is intrusive.

  • Hi Gordon – do you think the trend to more storage and computation on the device might result in a paradigm that resembles browser based apps?
    – ie you get the benefits without the commitment and the linking still works. I can see this might require some pretty significant rethinking from current browsers, but then maybe that is the new software layer that Colony was talking about.
    Re Facebook – the data has been running in the opposite direction to the anecdotes for so long now that I think people like to talk about quitting FB more than they want to do it.

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