Creating A Network Effect Within Your Business

byownonlboss

2.2K followers

Updated 6 years ago

Ever since the stone age (probably even longer before that) we humans communicated with each other to exchange experiences, learn from each other and improve ourselves. From talking with the members or leaders of other "tribes" we gain value that we can use in our own survival.

The idea of a community or meetup is that you can exchange these experiences and values between the members, instead of just listening to one person speaking towards an audience. The community members will get more value by joining in on these communities and there will be more value when more members enter the same community. This is what they call a network effect.

Network Effect: The phenomenom whereby a product or service gains additional value as more people use it.

Social Networks

Social networks seem to win from traditional audience based media nowadays in the times of shareconomy and decentralisation.

While the way we communicate with each other has changed, the principle and reasons behind the communication is still the same. That social networks have become so popular we can all agree. Facebook has been there for many years and is now a leading place to go to for keeping track of your contacts, friends family and more. You can find out easily what everyone has been occupied with, how they are doing and you can also easily get into contact with them.

Ownership Of Content & Contacts

In the past years many companies also made use of Facebook as a platform for building a community around their brand. As such you can create pages or groups where customers or people from your audience can communicate with you and others and share their experiences.

Unfortunately Facebook has been changing a lot lately. It really went from bad to worse. Originally as a brand you paid for likes, but then had ownership over your 'members' or 'likes audience'.

As Facebook is a centralized system, the Facebook started making changes to the system and decided that companies could no longer obtain ownership over their likes or customer base.

It started with that you couldn't have plugins on your website any longer and all your messaging goes into the news feed. More and more functionality ended up behind a paywall and the guarantee that you would have full access to your audience became uncertain. Instead of having total reach of your followers, you now had no more organic reach than say 1 or 2% of the followers. Everything beyond has to be paid for.

Also we 'normal' private Facebook users got the same treatment. Apart from the recent scandals on privacy and data sharing, Facebook decides also for you what you will see in the news feed or not. While you can put switches on for notifications, it is no longer certain that these switches will actually still have an effect to what ends up in your feed.

This is why we, here at Wealthy Affiliate hammer you to do a lot of creating your own website and content on your own platform instead on a centralized system that isn't owned by you, so that when things change, you still have control over your community.

Creating A Network Effect Within Your Business

This brings me however to my original topic. There are certainly options for those that want to have their own community around their niche. There are many systems out there that offer you to build your own community on their platform. Many even come with premium versions that offer you your own branding on the platform as well as subscriber payments etc.

There are even possibilities to create your own online community through WordPress (called a membership site). I don't want to go deeper into the subject of how to do so, I just want to show you why it could be a great idea to build your own social network and why you should be creating a network effect within your business.

There are at least 4 reasons why you should consider creating a social network:

• Adding Value To Your Brand/Niche/Product/Service
• Have A Place Where You Can Engage With Your 'Audience'
• Your Audience Can Gain Value From Eachother
• Inspiration For New Content/Products/Services
• Monetization

Adding Value To Your Brand (or Niche, Product, Service)

There is just one big problem with centralized media, such as is the case with a weblog, a newspaper or a conference. You are still just the only one creating the content (and lots of it) and you got an audience that is listening to you.

Your content becomes not more valuable the more people come to your website. Yes, your sales might go up, but the product or service or niche content does not get more valuable the more people come visit your site.

The same goes for a lot of other types of media. An email list does not get more valuable to any of the members of the email list, the more people join the email list.

An online store does not get more valuable, the more people that come to the store and buy products from the store.

Even if you teach an online course, the course does not get more valuable to the people taking the course, the more people join the course.

Unless the people of your site can interact with each other, the website content, email list content, online store or online course does not get more valuable to the audience.

It is like broadcasting versus community.

Have A Place Where You Can Engage With Your Audience

The same way you have social media accounts or encourage people to comment on your content, you can engage with your audience or customers or members through a social network. If it happens to be your own social network, you will have way more control over what people see or not see and you will have access to the data.

Your Audience Can Gain Value From Eachother

This is actually the most important factor of creating your own social network. When your audience can share experiences and stories with each other, there will be an enormous amount of value created between the members of the social network.

No longer will it be a transactional "like" for your brand, but an enormous valuable engagement with your brand. People will talk about your brand or your niche and be interested in the ongoing discussions.

Inspiration For New Content or Products & Services

Having an ongoing living community around your niche or brand can also help you create more content or products and services for your niche. You have now an engaging community that actually is asking questions. You might even have the accompanying answers (multiple usually) to these questions.

At the very least you will see the sharing of many experiences and stories around the questions. All this and more can be a source for new content you want to create. Now you know what people are actually looking for.

Monetization

While I wouldn't encourage it straight away to anyone, there are options to monetize the social community through various ways.

First of all, if we look at Wealthy Affiliate, you are paying for the courses, the technology to build and host websites, various tools and you have a great community that supports and nurtures. That proves that it can work.

You can also partly monetize it through adding your products uniquely to the community, as in they can only access the paid courses through the social network that you got, so that students can communicate with each other or be part of your community by paying a subscription.

How Do You Condition A Network Effect?

There is of course some work involved into keeping the conversation going or to get it all from the ground and started in the first place.

Apart from getting the software in order, you will also have to set the social media plaza up for discussions and story and experience sharing,. You have to:

1. encouraging conditions to meet 100 1000s 10000 just like us
2. share stories, experiences, ideas (not advice) with eachother
3. answers to questions that are not easy to get an answer to, stuff you cannot google
4. find inspiration everyday

• a blog doesn't get more valuable when more people go to your website
• an email list does not get more valuable to any of the members on the list by the amount of people that join your email list
• an online store does not get more valuable the more products people buy from them
• even when you teach an online course, there is not more value for the people who take the course, unless there is a means to interact with each other.

The latter is a funny one. Wealthy Affiliate is actually a place that has implemented the network effect very well. If it had just been a course taught by some video's of Kyle, it wouldn't have gotten more valuable the more people who had joined WA.

WA is also about the community, we can communicate with each other and learn from each others experiences. There is a network effect within WA that creates value to be part of the network.

When you got the software in place and have started creating your community space, it is all about creating the conditions by which people can meet and build relationships with each other.

On a social community that is supporting your brand, niche or interest, you ideally want to share (and open up for) stories, experiences and new ideas.

Giving advice is not the type of content you want to stimulate on a social network. Advice sort of stops the conversation, while the other types open up for discussion.

Another great thing for a social network is asking for answers on questions that do not have an easy and obvious answer. This is the type of content that you cannot really google for.

Important Last Note

Mind you, the point of creating a network effect on a social network is not about bringing people together around your brand, but about enabling relationships to happen between the people in your community. Your niche or brand provides a value.

You are trying to help the identity of the individual people that are a "fan" of your brand. The community you create is not there to show off too much of your brand or your purpose or hidden agenda, but about offering an extra value to your following.

Please tell me what you think about creating a network effect or a community around your brand in the comments below.