In the early 2000s, social media networks helped transform the very concept of community. Built out of the forums and bulletin boards of the early Internet, companies such as Facebook (now Meta) and Twitter pitched their vision of a “social” web.
Since 2016, social media has become synonymous with scandal. Platform failures around data privacy, misinformation, hate speech, and more provide examples of what business schools shouldn’t do.
But the social product idea is still strong. For an aspiring entrepreneur, finding a good way to build a community can be the difference between being lost as one of the many apps in the field or achieving outstanding success.
The idea that social features are essential for apps is not new. In 2020, investor D’Arcy Coolican wrote about the idea of ”social+.” Companies like TikTok and Fortnite focused on one category and built social experiences around it.
“Products with an embedded social component have fundamental and asymmetric advantages over competing non-social products in their category: better growth loops, better engagement, better retention, better defensibility.” is,” writes Coolican. “And because Social+Enterprise is network and community driven, the benefits will accumulate over time.”
One aspect Coolican emphasized was the idea that social features were an integral part of the wider product, rather than an add-on. Adding the ability to share content with friends is not enough to make the product work.
One such app with an integrated social component is Shares, which targets the world of retail stock trading. Co-founder and chief product officer Harjas Singh says the app aims to build on the success of other apps such as his Robinhood.
Apps like Robinhood grew up with retail stock trading, but new generations are making social features essential © Omar Marques/SOPA Images
Demand for these apps surged during the pandemic, boosted by a stimulus-driven trading boom. But while the stock trading-based community exploded, they happened outside the app. For retail deals, his Reddit, home of WallStreetBets, was his one hub. Others included closed or private channels on messaging apps such as Telegram and Discord.
“Retail investing has traditionally been a lonely, solitary experience,” says Singh. “The current generation of personal investment apps has succeeded in building an efficient trading utility, but lacked a social experience.”
Singh argues that these apps create an unnecessary level of complexity and offer limited guidance and support to users. “This creates a barrier to entry for users who find the financial space difficult,” he says.
The Shares app functions as much like a social media platform as a retail trading app. Users can see what their friends have bought and sold, but the app allows you to hide some stocks, encouraging discussion and social interaction.
However, “social” should not be understood as limited to connecting contacts digitally. As Singh explains, Shares is also exploring ways to build new networks through app experiences.
“We recently launched ‘Community,’ a feature that allows users to participate in public discussions about investing and meet other like-minded investors to grow their network,” he said. say. These could range from novice investors, to those investing in Tesla and Apple, and others focused on crypto and Web 3.0 (a blockchain-based model for the decentralized future of the internet). there is.
Fintech Loop, which launched last year, is also based on the idea of seamlessly integrating the social dimension with another business. It allows users to borrow and lend money to their friends for free, and allows them to track lending, usually informal.
Loop founder and executive chair Paul Pester said: “Financial services generally don’t think that way. They think about accounts and transactions.”
A third of people regularly borrow money from family and friends, with a balance of around £12 billion, according to Pester. Reflecting elements of chat apps like WhatsApp, Loop’s design focuses on the digitization of common social experiences.
In contrast to the traditional social media model, which has been criticized for its use in advertising and political purposes, these new products generate revenue in other ways.
For example, Loop monetizes a “badge” system that measures how quickly people pay off their loans. It effectively acts as a credit score, allowing users to get better deals.”We’re also looking into offering Loop his kitties that can be loaned to groups of friends,” he said. adds.
For business students, the lesson to be learned from these apps is that while social media companies may be facing tough times, companies are finding ways to incorporate social ideals and community into their wider offerings. There is a more powerful path than ever before that can be achieved.
“‘Social’ is a universal and timeless need,” writes Coolican. “Fundamentally, humans are social beings. We crave connection and community beyond social media, without which things start to fall apart.”