Social network marketing: Getting from zero to critical mass

(above is a picture of  fun San Francisco tradition called Critical Mass in which cyclists take over the street! Thank god I don't drive much around the city)

What does it mean to hit critical mass?
I've heard several pitches in which an entrepreneur outlines a marketing plan for their business which is lots of hard work, but eventually they reach a "critical mass" point where all of a sudden magic kicks in, and smooth sailing is ahead. What these discussions often leave out is, what exactly is a critical mass point anyway? How do you know where it is, and how do you know if you've hit one?

To answer this question, let's return to the original definition of "critical mass" from the Physics world:

  The smallest mass of a fissionable material that will sustain a nuclear chain reaction at a constant level.

What does fissionable material means? What is the chain reaction that happens for a web property? Let's look at it from two separate contexts - user acquisition and retention.

User acquisition
One way to interpret this is that initially, your site has difficulties with user acquisition, until you hit some scale points in terms of total userbase. Then all of a sudden, your site goes "viral" and you start getting lots of users coming in. To formalize this idea, you could imagine the following happening:

• Initially, you are getting users through ads or PR, and your viral factor is <1
• As your site grows, word of mouth effects (bloggers, friends, etc) give you some name recognition
• This brand recognition increases your conversion rates across the board, thus boosting the percentages that make up your viral factor, increasing it to >1

That's one way of viewing it, although I don't believe that's what most people mean. They usually mean that their site is not that useful until there's a certain # of people on it, and when you cross the critical mass point, then the site becomes engaging. So let's talk about this idea in an engagement context:

Engagement
As discussed above, there's an idea that for a user-generated content site, you have an early bootstrapping problem. If you're YouTube, but have no content, then no users will stick around. Yet if you have no users, then you have no one to upload content. So you need to break out of this local minimum until you cross some threshold - this is the critical mass point. To formalize this idea, here's the retention focused view:

• Early on, you are getting users through PR or ads, but all your users bounce off the site
• However, each user you acquire have some chance of creating content (profile/pictures/video/etc)
• Eventually, new users have enough content to consume that they stick around on the site, perhaps messaging older users, who now return
• Once you have a "critical mass" of users, then there's enough activity to keep everyone coming back

In this perspective, you can imagine that there are actually multiple phases that your user passes through - initially, they have a passive experience where they are pulled back onto the site because of notifications like friend adds, messages, etc. And it's possible for your site to never get past this phase. However, if you acquire enough people, new users pull back old ones, who then start coming back, until they start using the site on a regular basis.

What "scale" of network does your website depend on?
However, the discussion above also neglects that users want to consume different kinds of content depending on how they view the site. For example, the following scenarios are probably FAIL states, even if on the surface they look good:

• 1,000,000 users composed of 100 strangers in 10,000 different locations
• 1,000,000 users who created 1,000,000 different forums with no cross-visiting

The reason is that the above scenarios represent ultra-fragmentation, with no ability to reach critical mass points. This illustrates that there are different scales of network, which reflect different product designs. These include:

• Networks of "real friends"
• Networks of online friends united around an activity or interest (WoW, anime, etc)
• Networks of people in the same local region
• etc.

It takes careful thought to figure out what network your product is really built on. It's very common to see companies that are primarily targeting purely online friends build features that are really meant for people that know each other offline.

Similarly, even within a type of network, it's important to consider the level of adoption within that network. You could argue that there's a concept for a "minimum social group" which represents the smallest number of friends within the appropriate network, before a social tool is useful. This minimum social group concept is kind of interesting because some applications only need a small number of friends to get off the ground, and others need more:

• Skype: 2 minimum
• Mailing list: 4-5 minimum
• Forum: 10 minimum
• Social network: 10? 15? 20?
• ... etc.

So I'd encourage anyone building a social site to really consider what type of network they are building for, and how many people they need at the local level. Once you can figure that out, then the next goal is to aggregate these smaller groups into a larger one. This is essentially what Facebook did - by understanding how to dominate a smaller space like a college, they could roll up lots of small spaces into a larger population.

Aligning your user acquisition to your network goals
As many have observed, startups working on the Local space have had a very very tough time, with the exception of Yelp. In Seattle, where I'm from, Judy's Book raised a ton of money and then promptly closed shop because it was hard to get traction.

The reason of course, is that a regional network is a pretty specific one - there are tons of them - plus the minimum social group is actually pretty high. You need a lot of diverse people on the site, reviewing everything in site, before you hit a reasonable coverage % for reviews.

Similarly, if you are doing blind addressbook importing as the way to grow your userbase, but you aren't targeted about what traffic you're pointing into the viral loop, then you might end up with a bunch of users from Turkey or some other random part of the world. Probably also not what you wanted.

So to review:

• Critical mass is defined by what type of network your social product operates on, and how many users you need on that network before the product becomes useful
• Thus, critical mass is a product-by-product discussion - there's no one-size-fits all
• Similarly, people that use your product go through a collection of "phases" - from ranging from passive usage where there isn't enough content to consume, to the point where they are very active and creating content themselves. The threshold point between the phases is a local observation of critical mass
• Sites that are useful for "online friends" and don't require too many people are the easiest to get off the ground (but have other issues, like they might be too niche)
• Site that are useful only for large numbers of "real life friends" (local review sites are a good example) are the hardest to get off the ground, yet are hugely useful if you can get people on board

As always, comments appreciated.

Comments

[plin]

Thanks for this insightful article regarding how to gain traction for your specific site. When I first started reading it reminded me of the book Tipping Point.
That said, for every social network site you are currently trying to build, there are multiple ones that tailored toward the same audience. I would love to hear your opinion regarding how to how do you attract the first thousand or ten thousand participants.

[Siqi Chen]

Jesus Andrew, the genius never ends. Thank you for this.

[Eric]

What do you think about the potential of white-label social networks, like Ning, in this context?

Also, I hate it when I'm biking and my tire gets stuck in the tracks.

[Eric Dewhirst]

It would be interesting to model the critical mass issue as it relates to Craigslist. At first in a new city people try but traction is low - then a few months later they try again. The buzz is strong so communities grow over time.

I know for us - we have spent targeted Ad spend until we get our internal population/member ratio and then traction occurs. You have to spend to get there - but once you get there you can turn down the spend.

It is a fascinating business for sure - Thanks for the post Andrew.

Cheers - Eric
P.S. - Here is a post on our how we get critical mass - http://blog.pickuppal.com/2008/05/02/pups-per-click/

[Sidney Price]

Andrew, another winner, your mind is truly a wonderland, Thanks!!

[dave mcclure]

again mr. chen, nice use of pictures :)

>>imagine there are multiple your user passes through...

actually, i wonder if you may want to consider that it's really your website that is going through phases, and that your engagement strategy should probably be matched to those phases. i've been running across this recently in several sites & apps that operate on a user-generated content basis. in fact, i think you can summarize it briefly like so:

Phase 0: you just launched a very rough alpha & you have no content. you're just testing for basic functionality, and for the most minimal of user interest & activation. optimize for one very basic call-to-action. if you get some traction & don't completely suck, progress to next phase.

Phase I: you just launched a soft beta, and you're still testing for better activation, but now you're collecting content. at this phase, emphasize content contributors who add stuff to your site, and offer them significant emotional incentives to contribute (pimping their content on the home page, perhaps paying them, etc). if you reach a minimum critical mass of content suitable for your viewing audience -- and the content collection UX doesn't suck -- progress to next phase.

Phase II: you have now launched solid beta, perhaps even begun some paid promotion (or not), and the user experience doesn't suck. you should now emphasize referrers / affiliates who are incentivized to invite, share, blog, embed, or otherwise distribute your content with the primary goal of acquiring other users. again, this can be done via emotional or financial influence (altho you may want to wait until you monetize and/or have funding to do the paid promotion). if you are now generating a large viewing audience, progress to the next phase.

Phase III: you should now focus on organic end-user acquisition, begin to dial down paid acquisition costs, start ramping up monetization, and hopefully begin to identify 1 or 2 high-volume channels that could become break even. if your monetization doesn't suck, now would be a good time to go raise capital & tell your potential investors you are getting close to profitability, and that they better give you a shitload of money & a high valuation before you don't need them anymore and can tell them to fuck off forever.

Phase IV: you are now running a break-even and/or profitable business. you have predictable & profitable customer acquisition in volume. borrow as much money as you can get, buy as much paid traffic as you can, and ramp the shit out of your organic channels. sit back while the benjamins roll in. wait for eric schmidt, steve ballmer, or warren buffet to give you a call.

rinse, repeat.

[Eric Dewhirst]

@dave mcclure - that was the sweetest summary I have read in a long time! The most succinct line:

"borrow as much money as you can get, buy as much paid traffic as you can, and ramp the shit out of your organic channels."

Nice comment - Cheers - Eric

[Workpost.com]

Yes, getting critical mass is quite difficult.. thanks for the article.

[Christian]

Andrew, i really wonder when you'll introduce micropayments for this stuff - i'll give you a virtual gift on Facebook to start with!
With regards to your post, I think that's a pretty sweet summary - although I would add one parameter to the equation: in addition to figuring out what type of network you're targeting, you also need to figure out what "fuel" drives that particular social network. So if you're zwinky you know they're suckers for their little avatars, if you're dogster, you know they're crazy about cutie dogs. I think you could've done the pure "community building exercise" 3 years ago, but now that everyone has picked a primary social network - you really need to figure out what they're coming for!

[Q dub]

Another way to think about it is that it's not the number of dots, but the number of lines on the social graph that measure critical mass. Now of course, some lines are useless, e.g. MySpace celebrities and Scoble/Calacanis's 5000 Facebook friends. For most communication/sharing social sites, you have to think about attracting "chunks" of pre-connected users at a time, and for local info, you're absolutely right: either entire neighborhoods come online at once or you don't get them at all.

[Bill Allman]

Andrew,

Provacative stuff. I would add that one further consideration is the "density" of the starter population from which the network arises.

Social sites that are of the "organize my friends" variety -- Facebook, eg -- grow because they leverage existing online and offline social networks (ie, people invite their friends.)

These populations in effect have 99% density. That is, just about anyone that a user knows may be fair game to invite to the new network.

But in building social networks around shared interests -- golden retriever fanciers, ultramarathoners, rare coin collectors, or in the case of our sites at www.healthcentral.com, people with diabetes, breast cancer, or migraines -- the density of the target population is way, way low. It's highly unlikely that a person diagnosed with type II diabetes, for instance, knows anyone else in their existing social networks who suffers from that disease.

Thus a single individual can't be a huge viral catalyst for these kinds of social nets, for the simple reason that they can't just email all their friends with "hey, i found a great diabetes site!"...their friends won't care because very, very few of them have the disease.

Ironically, while the 1st type of social net is a "nice to have" application for people to organize their social lives, etc., the 2nd kind of net -- one of shared interests -- is critical: Whether it is trying to learn about stamp collecting or trying to cope with MS, connecting with a network of people who have the same goals and interests is huge -- there is so much shared information and support to be gained and given compared to one's own already-existing social nets.

Thus in the case of building these 2nd type of networks, the challenge isn't just to get a user excited about the benefits of the social net -- these are quite obvious and quite powerful. It is figuring out how to grow those populations to the level that they are valuable. One way is to leverage the already existing, smaller node points of existing communities that can help spread the word. Another is through transference: People come to the site via searching for basic information -- side effects of a drug, for instance -- and discover the social net that exists there. But the density factor means that these kinds of crucial nets grow far, far more slowly than the "organize my friends" type of net.

The good news is that, because they intrinsically are more valuable to each individual, these "shared interest" nets are likely to be more lasting once built.