The challenge these companies will face will be to integrate multiple software platforms into a single workable platform. The obvious choice is to pick the best platform and run with it. No one is going to want to eliminate a feature that won a client though, so they will probably cannibalize features from other platforms as they absorb other companies client lists. The danger here is of creating a Frankenstein’s monster platform that tries to do to much. The best answer here, to me, is to create a clean, strong, versatile base platform and to treat the different features you can offer as apps. By doing this you can sell a customized offering tailored to any customers needs without turning your platform into a bloated mess. And since people are already familiar with the concept of buying an i-phone and sticking the apps they need onto it your business model fits into your customers comfort zone.

The idea of niche specialist offerings still resonates with me, I just have to integrate it with my instinct that companies are going to consolidate, and when multiple companies merge the new company will be sort of all over the map. Also, we know from the forces pushing the M & A wave that the companies with the broadest bases will be the strongest and most stable. The new larger companies will form out of multiple smaller companies, each with its own track record of successfully selling within one or two core markets. In order to integrate them without loss managers will have to create a new internal structure that can manage multiple and widely different constituent competencies without losing blocks of valuable customers (and lets face it, a platform developer isn’t worth what they spent on their software platform, they are worth the contracts they have managed to develop and keep).

I think the best way to pull this off is by creating bubbles within the company, pairing up sales execs who have expertise, contacts, and a track record in a market niche with designers who are familiar with the needs specific to that market and having them focus on building a niche focused practice group within the larger company. They say when you go to Vegas if you can sell one casino within a week everyone on the strip is asking for your number,

Focusing on a niche is a tried and true sales strategy. And having expertise within the clients marketplace is the best way to serve them and create a community that’s a winner. I just think that companies have to be bigger to survive. So to me the most successful companies 1000 days from now will be larger and more flexible, and offer more services to more people. At the same time, they will be subdivided internally into niche practices that focus on one or two marketplaces. Boutique operations will likely fail as standalones, the social media company of the future will be more like a mall, a conglomerate of multiple small successful boutique operations with the flexibility to change them out to grow and compete in a changing marketplace.

Our niche is real-life groups and most of our users are ex-users of these networks. While it’s been enticing to look at at the market opportunity for being a general social network, the needs are different and the cost to reach users is different enough where it makes sense for us to focus on our niche.

NICHE STOREFRONT
I probably sound old-fashioned when I say this, but whether it’s a local one-off (florist, pharmacist, etc.) or chain (Gamestop), I hope we see a resurgence of the smaller players where they remember you by name when you come back. I can stand to see far fewer CVSs, Walmarts, Targets and Best Buys breaking ground in our familiar neighborhood locations.

As we all know there’s never a simple answer to these kinds of questions especially with so many moving parts but one thought I would raise is “context”. As social networks grow in popularity the more successful ones will think about how they communicate, sell, socialize and service in the context of who they are or who they want to be. I don’t know if there will continue to be mega social networks or like the “bunch” http://www.jargondb.org/glossary/dinosaurs-mating new ones to replace them but there will always be smaller very focused social networks trying to serve a specific audience. On the web more so then on the street having focus as well as developing trusted relationships works.

However, social networks need to be monetized to exist. Advertisers have been looking at the space as a place to promote their products and services but not enough success have been called out, so far. Research shows that consumers want to talk to their Brands. Brands are being told they need to learn how to listen. A paradigm shift is underway.
As time passes Brands will better understand and appreciate the value of social networks and how to interact effectively. Before 1000 days are up you will see a shift from banner ad media buys to social networking media buys and they will manifest themselves in context to the Brand. As that happens Consumers will be better served, social networks will be more vibrant and become the next great technological advancement in our life time.

Your recent “walk about” has given you clarity of the social networking marketplace. I am intrigued having been around the table before when this question of focused success versus trying to be a me-too company has been the discussion. Companies that consistently ask why they are going to add a service, widget or feature will have a certain edge. If the answer is that it is:

1) Demanded by current customers and sited as a gap in an offering by prospects
2) Product, services, and sales completely agree this is a direction that will help current customers and future sales.
3) It furthers service and expertise in your success area

The economy will force social networking companies to better define who they are and who they serve. This needs to be able to be done in a clear concise message. By serving all do you really serve few? I am increasingly grateful to work with in a social networking company that has this clear focus on what we are great at second to none.

Pauline Brannigan | @pbrannigan

I’ve always believed that having a differentiated strategy on a focused segment will help companies win.

There’s a great book by Al Ries on the topic.

http://www.amazon.com/Focus-Future-Your-Company-Depends/dp/0060799900/ref=pd_bbs_sr_4?ie=UTF8&s=books&qid=1233684744&sr=8-4

I always use the analogy of if I had to have heart surgery, I’d always go to the specialist not the general practitioner.

Good post Derek.

-Rick