Today I received yet-another-invitation-to-some-new-social-network -site-that-promises-to-be-different. I did what I do with all of these invitations these days. I ignored it.
VC’s take note.
There are too many of these sites. The field is crowded. The sites are not differentiated. Few to none of them will be the next google. Or Microsoft. Few to none of the will be bought by google or Microsoft.
These sites are little more than glorified web pages with databases. The useful ones like TheFunded aren’t even backed by VC money.
They don’t have (as a collection) a meaningful business model … what are they going to do, sell advertisements? Lets ask myspace, facebook, google, linkedin, etc how that is going.
Please, for all our sakes, stop funding these things. There comes a time when you belong to just enough groups, and you start to eschew more invitations, as your time is better spent doing something else than adding friends and colleagues to social networks. That time passed for me a long while ago. As myspace starts petering out, and the other social networks start into their long declining tail of users, smart people will realize that they have been funding a fad, building a bubble, and with nary a real business model in sight.
There are far better things, things that actually have a fighting chance of being a real business in and of itself, that need capital.
Like the folks at Linkedin say, don’t accept every invitation, just those from people you know. It increases the value of your network to you. Same is true in a hierarchical sense to the social networks.
Please, no more. Someone who has actually run a business (successfully) would stop investing in the ‘R&D’ side and say “show me the money”. Things that don’t show the money, don’t get any more money. This is plain and simple good business sense. You don’t throw good money after bad, and you absolutely must get return on your investment, or you have to write down your investment as a loss. Management 101. (yeah, there are a number of projects/products we have in the “we want to work on them” category, which is immediately followed by the notes “but there is no market for them, or customers don’t want to pay for them”, so they get no expenditure of our resources …).