I'm going to post part of Sean's comment because I think he makes an excellent point.
[snip]But after things are nice and open, something else happens. Smaller walled gardens appear, persist, and thrive. Keep in mind, a lot of Facebook's initial appeal was the fact that it was rather exclusive (colleges only.) There are other social networking sites out there that thrive in relative obscurity because they give users a feeling of being special or better. Often they're invite-only.
Part of me wonders if Facebook would have been better off (in terms of creating real value) if they hadn't tried to be a walled garden that appealed to everyone, to try and compete with Myspace.
You can be a walled garden and survive, but you have to give up the dream of appealing to everyone, of being the biggest. Facebook's strategic blunder has been that they're trying to have their cake and eat it too.
I think Sean is absolutely one hundred percent correct here and he touches on something that I've been thinking about but haven't really written about yet. It is better fill a niche and have users who are radically invested in your success than appeal to a broad base of people who are only lukewarm about whether you survive or not.
Think about the difference between Apple and Coors Light. There's a core group of Apple users who are absolutely fanatical about their products. Then there's a group of people who aren't fanatics but use Apple's products and would miss them if they disappeared. I'm in the second group. I've got an old PowerBook, an iPod and I'm a little obsessive about renting movies on iTunes. If any of those three disappeared tomorrow, I'd miss them as there's no other product that is a complete replacement. And if Apple stopped making computers and I had to go back to using a PC I might shoot myself in the face (I might be overstating that but Microsoft is churning out dogshit for OSes these days and my only real alternative to OS X is Linux and I've never been a huge fan of Linux on the desktop but I digress).
Now imagine if Coors Light disappeared tomorrow. Yep, that's the sound of no one caring. Now, which company is in a better position?
But neither of those are a walled garden and that's where this conversation started. I've said that walled gardens can never compete with the Internet and they can't. But what about a walled garden that isn't trying to compete with the Internet? That's really the heart of Sean's comments. When you use the fact that you're small and exclusive to your advantage you can absolutely succeed as a walled garden. The fact that you shield your users from the flood of crap on the Internet can be a very powerful draw. The history isn't written on Facebook yet, so they're not a very good example but lets look for a moment at a site called Heelpress.com. When I first found heelpress it was very much a walled garden. It was a site for writers who were in college. You needed to have a .edu address to sign up and while anyone could come to the site and read the writing posted there, the only people who could submit writing were people with a .edu address.
When I first found heelpress I loved it. I posted a lot of my early stories there because it was a great way to get feedback and to connect with other people like me. College aged writers. There were even other people in my creative writing classes at UCLA who were on the site and we used to talk about the site in class. We were well on our way to becoming fanatics.
Then heelpress did two things that moved it from awesome niche site to just another art site. They opened registration to anyone and they changed they focus from writing to art. And when they changed the layout of the site, they put the art above the fold and the writing below so you had to scroll down to see what was new in writing. They basically shit all over the people who had supported them early on (they've since put the art and writing next to each other).
I bet you can guess the day that I stopped logging into my heelpress account. What I was surprised to find (then not now) is that the people in my class had exactly the same reaction. It had become "lame, stupid, boring" and while no one muttered the magic "sell-out" phrase, we were damn well thinking it. Look at it another way. What if tomorrow flickr announced they were adding blogs. Could there be anything more lame?
But don't take my word for it. Look at their alexa ranking. They went from having a rank in the 20k range two years ago to being at 300k.
The worst thing facebook did was open themselves up to the world. They were never going to run out of college students to provide them with a userbase but they got greedy. They wanted as many eyeballs as they could get but they didn't realize that in the process they lost the very thing that made them special. They diluted the community so much that now they're just another social network site.
Posted by Ben Corman at 10:42 PM