Product Description

All of us know that users of the Web do not read advertisements on the websites we visit, yet the online communities are emerging as the next great media rely solely on this method to produce revenue. In The Social Network Business Plan, social network expert, David Silver presents and explains 18 cutting-edge methods to create revenue for social network websites--none of which are advertising. He also predicts the demise of seemingly successful online communities such as MySpace and Facebook that rely on advertising as non-sustainable modalities. Silver describes and explains that in the future new products and services will be introduced, talked about, rated, reviewed and recommended - or killed - by online communities. One example of the 18 new revenue channels that online communities are adopting is the sale to vendors of anonymized conversations of the community members concerning those vendors' products or services. Another example is online communities who partner with the internet providers to receive payment when a particular online community's information is downloaded usinf that providers service. The other sixteen revenue channels are equally head-turning!

Silver is the only angel investor, operating down where the rubber meets the road, who is investing in online communities in their infancy, and writing about which ones will win and which ones will fail.

Product Details

• Amazon Sales Rank: #33861 in Books
• Published on: 2009-02-24
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 224 pages

Features

• ISBN13: 9780470419830
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

From the Inside Flap
Do you read the advertisements that appear on the social networking web sites you visit? Neither does anyone else! So, why do such hugely successful online communities as MySpace and Facebook rely solely on advertising to produce revenue and how long can they survive? Isn't there any other way for online communities to make money? Actually, there are eighteen other ways!

In The Social Network Business Plan, venture capital guru and Smart Start-Ups author David Silver reveals eighteen cutting-edge methods for generating income from social networking web sites—none of which involve advertising, and all of which really work.

Silver's premise is simple: There is a lot of money to be made by getting smart people talking about something that has commercial value and then selling their anonymized conversations to vendors. He goes on to reveal how all parties benefit from these arrangements, who gets paid and how much, how you get these smart people to start talking, and why vendors will pay to overhear these conversations.

At the core of each winning business model is the recommender online community, arguably the most powerful and disruptive force to emerge in the information age. These groups have already begun shaking up the advertising, marketing, sales, and public relations industries, and their influence is growing. Social networks are having a tectonic effect on several industries by shifting the power from the producer to the customer, or what is known as oligopsony power. Any savvy entrepreneur or investor who wants to get a jump on this emerging trend needs to understand the power of these groups and discover ways to tap it. This revolutionary guide helps you do just that. You'll discover how to:

• Create an elegant online recommender community

• Demonstrate your community's value to vendors

• Make your enterprise a substitute for all the others

• Operate multiple online recommender communities

• Inspire passion and loyalty in your communities

• Maximize your selling price

Online recommender communities are more than nice little businesses; they are poised to start filling Fortune 500 slots very, very soon. Read The Social Network Business Plan, and get in on the action before it's too late.

From the Back Cover
Praise for The Social Network Business Plan

"As the leading provider of 'white label' social networks, we use David's book as a conceptual blueprint for designing revenue applications into our software. We agree completely that traditional advertising is dead and social advertising is the future. David's book gives you a blueprint for succeeding in the future."
—Bob Crull, founder and CEO, OneSite.com

"Online communities win when they figure out ways to collaborate with their fans to create products that can be produced and sold with mutual benefits. David Silver simply and clearly explains how social networks can do this. You'll also learn how this helps companies stay lean by generating cash through multiple channels. This is how great ideas turn small companies into fast selling companies."
—Patrick Dillon, cofounder and President, CollarFree.com

"I've started, built, and sold several web app companies, but social networks have web app companies beat. They cost less than $500,000 to launch, and if you get decent revenue growth, social networks can be sold for twenty times trailing revenues or more. No new industry has ever had these two characteristics that I'm aware of. David explains how to bring in revenue quickly through up to eighteen novel revenue channels. It's a good read."
—Robin D. Richards, founder and CEO, Notification Technologies, Inc.

"For anyone interested in developing, building, and operating a social network, you need David Silver's book as a flight instruction manual. David brings his wealth of experience in online marketing, technology, and finance to you through the pages of this essential book."
—Eric Targan, founder and CEO, BTC Interactive, "the Internet's first viral marketer"

About the Author
David Silver is the Pied Piper of social networks, having funded more than a dozen of them, including onesite.com, iboats.com, and collarfree.com, and has consulted for pensiongovernance.com and many others. Before the social networks wave crashed onto his shore, David provided the early stage capital for ActMedia, Cognition Technologies, Frontier Telecommunications, Intelepeer, TIE/communications, and Victor Kiam's LBO of Remington Brands, among more than 600 other entrepreneurial companies.

Customer Reviews

Great for those struggling to grow or start their Social Networks
I got this book because I have been struggling to grow an online community for the last year. I've found that the technology is pretty straight forward. However, few books speak to three essentials: 1) delivering benefits and wealth to community members, 2) sources of revenue for the community developer besides advertising, and 3) how to actually grow the community. David Silver's book deals very well with the first two only. That's why it is only rated 4 stars.

Anyone who is attempting to improve their social network or to start a new online community will benefit from David Silver's book The Social Network Business Plan: 18 Strategies That Will Create Great Wealth.

Don't be turned off by the title. This is not a book about technology. Instead it deals with the issues and challenges that need to be addressed to build and maintain successful online social networks from the perspective of an investor. "Wealth" is broadly defined not only in monetary terms, but also in user benefits from helping companies and government to provide better products and services.

My Review From The Trenches

My review is through the lens of someone who is trying mightily to build an online home remodeling community, Millennial Living, using the content management software platform Drupal. Besides maintaining the site, I spend time thinking about ways to grow the community and produce content. Since time is precious, I am always trying to learn more about social networks at the least cost. David Silver's book helped a lot.

How To Read This Book

First read the book from cover to cover. It's especially important not to skip the Introduction. I did and I was totally lost in Chapter 1. The introduction spells out the author's philosophy and defines important concepts like "recommender websites" and communities.

Silver defines "wealth" in two ways. The first is from the perspective of an investor. This might trouble those who run or are contemplating building a non-profit online community. Don't let it bother you. The reality is that we all have to make a living, and the expertise and effort to create value and benefits for the members of a community takes money.

There is a second aspect of wealth creation, according to Silver. This wealth is the benefit members receive from achieving the fundamental goals of the network, besides fellowship and social interaction. For example, companies that rely on the community for business and don't have to advertise can pass part of their savings to members. In addition, vendors would be able to design and offer better services and products by understanding the needs of the community. I found this compelling and especially relevant to why many of us are so interested in social networks. In my case, it is to reduce and ultimately eliminate the pain from remodeling and decorating.

What's Good About The Book

The book's approach to launching and sustaining social networks is to get away from the advertising model that so many social networks use today. Think Facebook and MySpace and perhaps your own community if you use Google Adsense. When I came across this passage, alarm bells sounded since I use Adsense on my site. Of course the 18 ways of generating revenue recommended in the book offered some alternatives and food for thought, but they take a lot more work than using Adsense. Social network sites, my own included, need to diversity their revenue streams to grow.

The most important aspect of the book deals with user-generated content. Silver advocates "slicing and dicing" anonymous user content that discusses products and services and creating reports for industry, companies and government. His reasoning appears sound, since most companies would prefer dealing with a specialized community over advertising to the masses. Personally I don't see any harm in this as long as users are told up front that this will be done and how they would share in the benefits.

Chapter 4 is an important chapter. It provides three great examples of online communities that are relatively successful and are using many of the strategies Silver advocates. These companies include:

Sermo.com a community for physicians to discuss real live cases and other issues of concern with their colleagues.
Patientslikeme.com- a community that helps people deal with serious illnesses.
Hystersisters.com- a women only community for those who have had a hysterectomy or are contemplating one.

References to these websites are invaluable. They allow you to visualize how the strategies could be employed in your community.

The book also provides examples of social networking sites that could be started. This might be good to jump-start your brainstorming sessions if you are looking for ideas. In addition, the book provides proforma incomes statements that go with the communities. The financial statements give you a feel for what it takes in terms of effort and money to grow a community. Although the numbers should not be taken literally, you can get an idea of where your effort should be directed and what an investor's expectations might be.

What The Book Lacks

The book assumes that there's a need for the community to begin with and that you can get people to sign up as members. It is short on specifics on how to go about this, so you have to look elsewhere for this material. However, it assumes a great deal of effort in these areas specifically for SEO, membership recruitment, etc. The proforma incomes statements will give you an idea of how you might budget for this.

The book does not dwell on social networking software. It references commercial software offerings like Ning and Onesite. That's a result of Silver's inexperience with web stuff and the open source community, which he readily admits to. I am working on educating him about Drupal's capabilities so I expect that in his next book, he will acknowledge Drupal.

There are times when the book departs from its central message of abandoning all advertising and relying on user-created content. It also assumes that people will pay a nominal fee to become members. This is definitely not my experience so far.

My bottom line: This book will help you get your arms around what you should be doing on the non-technical side to start or improve your social networking site.

Mr. Silver knows his business
David Silver takes the whole social networking phenomenon apart and has fun with it all along the way.

Right now the whole game is rather new and there is a lot of guesswork about where it's going to; yet David talks with such confidence and with such clear reasoning that he appears to have been sent from the future and is here to tell us how it all will actually unfold.

You'll notice that the subtitle of the book is "18 Strategies That Will Create Great Wealth". You should know that these strategies are to bring about 18 distinctly different sustainable (and ongoing) revenue channels.

You'll be familiar with some of these channels, but not all of them, and it will surprise you to see how few of them are currently in effect. He's talking about a future that is not too far away. (You'll also become aware of some of these channels that ARE being implemented -- and how they are making money behind the scenes.)

Mr. Silver is an angel investor; a partner in Santa Fe Capital who has long been fond of Internet enterprises (he drops some very famous names in this and Smart Start-Ups).

Here he reveals various formulae that he has used over the years to determine whether he should represent a project to investors. Principal among them is an 8 step process that he sometimes calls "Silver's Law" and sometimes the "Demonstrable Economic Justification Factors". It's easy to use and is a MUST in any social site business plan to follow these steps to determine the viability of a proposed community.

Through reading this book, I got a very good grasp on the real value of social networking sites to the world, assisting all of us in leading better lives. That is on the long term view. I also got lots of ideas about how early adapters will create more communities and create great wealth for their founders.

Mr. Silver identifies these communities as "recommender communities" and illustrates clearly their value. (You get a good glimpse of this as early as the book's introduction.)

In this book, the "multibillion dollar question" is articulated: "... will the... 'brands' continue to control their customers through advertising, shelf-space management, couponing, catalogues, and web site retailing, or will recommender communities utilizing the wisdom of the crowds to vote on the best products and services actually instruct the vast number of consumers on which product or service to purchase?"

His response: "If the entrepreneurs who build the recommender communities execute their business models with elegance and efficiency -- and I will provide the best instructions for doing so -- then the recommender communities will creatively disrupt the (brands)."

Both Smart Start-Ups and The Social Network Business Plan are easy to read. It is obvious that the author loves his subject and that he loves the English language. I am glad that I read this book as I now have a much more clear and confident perception of this wonderfully disruptive force (see chapter "The Sumptuous Impertinence") in the world.

DW Locke

18 Strategies? Are you sure there weren't more?
18 Strategies That Will Create Great Wealth??? It seems to me like there are more than just 18 in the book. Mr. Silver has a brain full of ideas and I learned much more than just the 18 strategies.

As others have stated, don't forget to read the introduction. It helps setup what Mr. Silver is thinking from the beginning. These are new and fascinating ideas!!! When you look at a Facebook or MySpace site, it's difficult to soak in the opinion that they're doing it wrong. All that advertising...why? The strategies in this book take the social network website owners away from advertising and describe other ways to generate the revenue. These are ways which will build a more solid income and reputable website, helping you build the "recommender" social network of tomorrow. I would like to have seen a little more information on why the big sites (MySpace, Facebook, Twitter) are worth so much and where their income comes from.

I read this book when I first got it and thought the ideas were downright crazy! Interesting and innovative, but crazy. Maybe because I'm not at the full level to implement them all...yet [...]. I recently began re-reading the book and things are so much clearer now...maybe I'm a slow learner. :)

And not dry at all. Humorous at times, full of facts and a ton of information. The ideas seem sound and make sense.

Building a trusted recommender website is the future and Mr Silver gives many examples of what he means. A "trusted" recommender website is an important part of the 18 revenue channels. The good reputation of the recommender website will lead to more possibilities.

I think I'm still a little too excited from reading the book again so I think I'm babbling. A definite buy.