The best version of every consumer product is the one that’s intrinsically social.
In recent months, there has been a lot of buzz around the "Social+" business model and companies adopting it, especially in the western start-up epicenters such as Silicon Valley and Berlin. However, this is nothing new for us at Kitcod as we have been observing this social revolution for years out of Asia in sunny Singapore.
According to D’Arcy Coolican (will be quoting a LOT) from a16z: “A Social+ company combines the community and network of a social product with a specific category, form factor, or experience. This can range from fitness (category) to audio (format) to games (experience), but the defining factor is that these companies are social at their core.”
There are many differing viewpoints on what makes a company “Social+” and even more so where it originated from. I believe the first major Social+ companies were actually the likes of Groupon and LivingSocial. In their early days you as a customer really needed to get a minimal number of people to come together and buy the offer in order for everyone to get a group discount. This social behavior is exactly what separates a Social+ company from others and China became the new breeding ground for such companies in recent years, so much so that many entrepreneurs in the region (us included) started to adopt this business model and eventually export it to the west.
In mid 2018, one of the largest Chinese news media outlet featured an article on the rising trend of “Social+” in China and how internet companies there have been adopting it. With many examples of apps like Pinduoduo (which offers users major discounts via group-buying) and Douyin (social video platform known internationally as TikTok) that makes more than 60% of their revenue through social commerce.
Fast forward to today, many companies and VCs in the west have been eying the Social+ trend and each want a bite of the pie. Among the most notable examples and the one that we really love at Kitcod is a16z (Andreessen Horowitz) that created an entire series dedicated to this phenomenon and we are going to borrow from it to further define Social+ companies.
D’Arcy Coolican: “The best version of every consumer product is the one that’s intrinsically social.”
1.They own their Social Graph and it's customized to their product.
Many companies leverage existing social graphs of big social platforms such as Instagram or TikTok and that's great, but it has its limitations. At the end of the day the community that you build there isn’t really yours and you will always be at the mercy of those centralized social platforms. That is exactly why at Kitcot we believe that in order to build a strong vibrant community you need to own your social graph. “Comparing the strength of the Fortnite community of today to the social games that were built on Facebook in the aughts supports this theory. It doesn’t mean you can’t bootstrap off another network, but ultimately you need to own your community.” D’Arcy Coolican
2. Their social graph is inseparable from the product.
To be a Social+ company, your social graph has to be critical to the business and not just a marketing play. We have seen many companies trying to add social elements to their app and in the majority of cases it simply messes up their product experience. Just because you can suddenly share a post or add comment functionality does not necessarily make you a social+ company. Take for example online news platforms that allow readers to share the articles with their friends or comment below vs Twitter where posting and sharing content is critical to the very product itself. The later social graph is simply inseparable to the product.
3. P2P engagement is part of the product itself.
Just as easy it was to mistake a news app for a social product (our previous example), it can be equally easy to mistake a user base for a community. To truly benefit from Social+ any app needs to have a P2P social engagement backed into its DNA. Take eToro vs Robinhood for example, both platforms are designed for trading and give many services to their traders and investors. However, eToro allows its users to follow successful traders (copy trading) and share their views and trades on newsfeeds with other traders. Both are social to a certain extent, but only when a company demonstrates that authentic engagement between users will it reap the advantages of being Social+.
After understanding the origins and characteristics of Social+ companies , we will focus in our next posts on the future opportunities of Social+ and its application across different categories ranging from finance and commerce to gaming and education. Let me end with my favorite quote from D’Arcy Coolican: “The best version of every consumer product is the one that’s intrinsically social.”