Create a Social Networking Site and Monetize it

Personally, I always find TED presentations very inspiring. The latest that I watched is from Seth Priebatsch, a 21 year-old that runs SCVNGR. Two things impressed me about Seth Priebatsch: One, his infectious, get-you-out-of-your-chair enthusiasm. Two, the inventory of entrepreneurial feats he’s managed to accumulate at a remarkably young age. He got his first startup at age 12, and by age 18, he’d founded another — PostcardTech, which makes interactive marketing tours for CD-ROM.

Now he’s working on SCVNGR, “a massive experiment in building a mobile game together.” Backed by Google Ventures, SCVNGR is part game, part game platform. Players play SCVNGR by going places, doing challenges and having fun — outside of the office, beyond the screen, in the real world.

I think he points different ways in who you can use what he calls “game layer” to engage your website´s members or users and also make money. In his video there are different examples of monetization and here in rsitez we already developed custom social networking sites that contained some of these elements. The results varied by site but overall I agree with Seth these tools are very powerful. Anyway, judge by yourself if his presentation inspire you. Enjoy!

According to the new Nielsen Co. report, the shift to social networks for communication is changing how internet users spend their time online. We already know it but this is one more confirmation in how social networking websites and software is affecting how people interact online. With Facebook leading the pack, social networks now account for 22.7 percent of the hours spent in front of a computer, a leap of 43 percent over last year’s figures.

The shift to social networks for communication caused a precipitous drop in email and instant messaging. Time spent emailing was down 28 percent and instant messaging dropped 15 percent.

Given a typical hour, Nielsen says the average user will spend 13 minutes on Facebook and other social networks, six minutes playing games, five minutes with email, 2 minutes each on browsing Internet portals like Yahoo, instant messaging, watching videos, conducting searches, and reading software information for a total of 36 minutes. The balance of the hour is spent on 77 additional categories measured by the firm, all of which take 2 minutes or less.

I can only see this trend continue to grow as more and more unique social networking sites and other kind of online communities are developed to cover more topics and users interests.

Maybe you have an idea to create a social networking website.  Not one like all the others that you have seen.  Many of them look the same and have exactly the same features.  You have an idea that will make your site … unique.  A vision that will make your social network stand out from the rest.  You have thought about how to grow and monetize the site.  You know what features you would like to have on the site.  You have a targeted niche audience and a clear value that you would like to provide. The problem now is to find someone to build the site exactly the way you like and to do it within your budget.  How do you go about this?

You can create a social network within a few minutes by simply going to rsitez.com.  However, rSite go beyond the 1-site fit all approach often used with social networks.

rSitez makes creating a custom social networking site easy by using the UDD methodology to develop a custom social networks.  These sites are based on your specific requirements.  This approach involves 3 steps in the process.

rSitez UDD Methodology

Understand (U) – A Project Manager from rSitez team will give you a call to discuss your vision for the project.  The technical responsibility of the project definition lies with the Project Manager, not you.  So you don’t need to understand the technology, code, technical jargon or fill out long forms in order to try to explain how the software should work. You will simply need to explain in your own words on the phone with a live person what you want the site to do.

The project manager will be able to ask follow up question to get a clear understanding of your project, the features you would like, and how to implement these features.  The focus will be on your vision for your social networking software.  Once we are clear about what you want from our discussions with you we are ready for the next phase of the UDD methodology.

Develop (D) – Our Development team is responsible to developing the application per your specific requirements.  They convert your vision for your social network to actual code for the application.  For example, instead of searching for members by city you may want to search on members within a certain radius (ex: within 100 mile of your location).  The development team will write the code to do this.  Or you may want to have integration with your corporate system where someone can click a link from your corporate application and automatically login to your social networking site without having to sign in again.  Our developers will write the code to do this or any other custom features you would like for your site.

Some examples of recent custom features our developers have created for clients include:

- Single signon where members from a corporate system can automatically login to their social network

- Facebook feeds with comments and friends

- Radius search to target geographical advertising

- Facebook integration where content and branding from the client site is posted direct to members facebook wall

- Full document library where any type of document can be uploaded and shared with other members

- Webcam and video sharing features

- Payment and monetization options and integration with different payment processors

- Different member types where specific features and access are given to members based on client specification

- Points and reward systems

- Management content reporting and downloads

and much more

Deploy (D) – Our development team will help you to deploy your application.  This includes providing full documentation for custom developed features, responding to any questions about the application, and providing technical support. The team continues to support the application indefinitely after the deployment based on our licensing agreement.  The team is also available to create additional features or meet new development requirements per request.

The end result is a custom social network with unique features that meet your specific requirements.  This will enable you to provide a targeted offering and let your social network stand out from other networking sites online.  This could help your site to grow faster and better than competing social networks. In the end your members will appreciate the specific details, value, and targeted approach provided by your network.

About the author

Rohan Hall is the Founder/CEO of rSitez, Inc. (www.rsitez.com), a technology firm that helps entrepreneurs create custom, revenue-based social networking sites.  He is the author of Stop Working, a book that teaches entrepreneurs how to use technology, globalization, and networks to build a global business.  He has developed technologies for a wide range of entrepreneurs and Fortune500 clients including HP, Corning, Oracle, Honda and various others.

Seal Concert Barcelona (www.rsitez.com)

I went to a Seal concert last night in Barcelona at Poble Espanyol.  Poble Espanyol (http://www.poble-espanyol.com/pemsa/en.html) is a traditional Spanish village in the center of Barcelona.  The village main purpose is to showcase Spanish history, culture, and architecture… and occasionally to have incredible concerts.

The village was packed last night with approximately 7,000 people paying an average of 40 Euros ($52 USD) per ticket.  The crowd was well entertained as Seal performed songs from past and future albums.  The concert was certainly well received and I think everyone had a great time.

The concert lasted for 2 hours.  Before the concert even started all tickets were sold and before he sang the first song the concert had made approximately $364,000 ($52 x 7,000).  I don’t know about you but I’m pretty impressed by the numbers.  I don’t know of anyone personally that makes that much money from 2 hours work.  The crowd went crazy with each song especially when he performed his hit song ‘Kiss From A Rose’. 

Seal’s performance was excellent as he charmed the crowd.  At one moment he bent over to sing to some screaming girls as they reached up to grab his hand and rub his head.  He flashed some perspiration from his head in the crowd and they screamed even more.  He had a great smile the entire time probably thinking … ‘I loooove this job.  Oh yeah, and thanks for the cash!’

About the author

Rohan Hall is the Founder/CEO of rSitez, Inc. (www.rsitez.com), a technology firm that helps entrepreneurs create custom, revenue-based social networking sites.  He is the author of Stop Working, a book that teaches entrepreneurs how to use technology, globalization, and networks to build a global business.  He has developed technologies for a wide range of entrepreneurs and Fortune500 clients including HP, Corning, Oracle, Honda and various others.

Google Alerts (www.rsitez.com)

If you have an online business it’s CRITICAL that you know what is being posted about you online as soon as the information is posted.  This includes info posted on blogs, News articles, forums and even social networking sites. 

You want to know if someone posted something positive about you so that you can respond in like to start creating a relationship with the individual or organization that made the post.  These relationships can yield great results as you continue to build your brand.

Likewise, if there was a negative post about you online, you should know about it and respond appropriately to minimize the impact. 

You should also track what your competitors are saying and what is being said about them so that you can react as needed to this type of competative news.

The process of monitoring, tracking, and responding to information that affects your brand is called Brand Management or sometimes Reputation Management.

You can use Google Alert (http://www.google.com/alerts) to monitor and track your online brand. It takes only a minute to configure this and it’s free. 

You can enter any search keywords that affects your business and ask google to monitor it.  This could include your business name, competitors business names, search keywords or other items of interest.  Google will monitor these keywords in news, blogs, videos and discussions and send you an email each time it finds newly posted content regarding this. 

Example: If the Washington Post include your business name in a new article online, Google would send you an email with the link of the article without you having to search for it.  You will be able to click on the article, read it, and post relevant comments.  This enhances your online presence, creates backlinks for Search Engine Optimization, and helps with your ongoing effort to create a solid online brand.

You can configure these email notifications to be received as the news happens, daily, or weekly – depending on your preference.

Once you have turned this feature on you will be able to keep track on your online reputation for your business and continue to build a lasting and powerful online brand.

About the author

Rohan Hall is the Founder/CEO of rSitez, Inc. (www.rsitez.com), a technology firm that helps entrepreneurs create custom, revenue-based social networking sites.  He is the author of Stop Working, a book that teaches entrepreneurs how to use technology, globalization, and networks to build a global business.  He has developed technologies for a wide range of entrepreneurs and Fortune500 clients including HP, Corning, Oracle, Honda and various others.

Techcrunch announced that Ning has layed of 40% of their staff and will be discontinuing their free services.  All Ning network owners will need to pay for Premium services to continue using their Ning network or they will need to migrate their network to another platform.

The news was released in an email from  Jason Rosenthal who took over Ning CEO Gina Bianchini position about a month ago.  The email from Rosenthal stated:

“My main conclusion is that we need to double down on our premium services business. Our Premium Ning Networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others both drive 75% of our monthly US traffic, and those Network Creators need and will pay for many more services and features from us.”

At the end of the day the lesson learned by Ning is that “FREE” is not a business model.  Even with over $120 million in investor funding, Ning still needs to generate revenue to pay its bills and to grow its business.  At some point, investors need to start seeing a return on their investment as well.

At rSitez, we understand this very basic business fact and provide a variety of payment plans for everyones budget.  Our plans include more features than Ning and we provide the opportunity to fully customize your social networking sites.  We will literally develop any feature you would like to make your site unique and competative and are loved by entrepreneurs for this reason.  Additionally, network owners own all the content in their network and take it anytime they like.

rSitez continues to grow every year and more than doubled revenue last year.  We’re a financially and technically strong company and do understand the reality of having a solid and reliable business model.

We wish the best of success to all the Ning network owners and welcome this opportunity for them to compare our offering and prices at www.rsitez.com with offering provided by Ning or any other network provider.

Funny stuff coming from the kings of social networking, according to the Washington Post article “Hiring Of New MySpace CEO Settles Many Old Scores”

<<MySpace parent company News Corp. continues to leak, off record, that  Owen Van Nattais in the final stages of becoming the new CEO of MySpace. Van Natta certainly has the experience on paper to run the company – he was a business development executive at Amazon, the chief revenue officer at Facebook and most recently the CEO of music startup Playlist.com. If the leaks are correct, he’s in the final stages of contract negotiation and his hiring will be announced shortly.

It has been a long time without posting here. At rSitez, we have used this time to cotinue improving our product (the more flexible and robust out there) and developing all the custom applications that our customers have been demanding…. busy and fun times!

It seems as if everyone is talking about social networking these days, whether it’s using Facebook, Twitter or LinkedIn, just to name a few.

These networking sites are answering a need that people have to connect with others and share news and information.

Although many individuals have taken advantage of social media, companies are also finding that social media can provide efficient ways to target and build a relationship with their customers.

While most companies have websites, particularly large and medium sized companies, the information on websites is often static. It doesn’t change often, and it doesn’t offer an opportunity for interaction.  Some companies have added blogs, which can increase readership.  But even blogs don’t always encourage a robust two or multi-way conversation between interested parties. 

Businesses are also putting up Fan Pages on social networking sites like Facebook, which does allow for more of a free-for-all conversation, but doesn’t allow a company to really target and market to a specific group.

One new type of program that has a leading edge is what www.rsitez.com  is offering.

By combining the attributes of a traditional website and the fluidity of a social site, rSitez lets businesses build a community of interested consumers.  The consumers can then talk with each other (and company members), share events, blog, participate in forums and in general, form a group of members that build an interest in your product.

 Another benefit rSitez offers is the ability to monetize the site.  Businesses can get paid for using ad words.  They can make money also by charging fees for membership, for special reports, or for products.  Nonprofit organizations can set up their site to accept donations.

 For a growing young business, rSitez provides a way to start a viral marketing program that involves your customers and creates a strong following; all while helping your business make money.

The Market

Social Networking sites like Myspace, Facebook, Linkedin and others are the buzz of the day.  But more than being the buzz of the day, they are the faster growing segment on the internet today.  Additionally, the founders of these companies seem to enjoy unprecedented wealth valuation in only a few short years.

Facebook Founder Mark Zuckerberg, at age 25, is now worth an estimated $2 billion and is now placed at #158 on Forbes list of wealthiest people in the world, according to Forbes.com.  He’s the youngest self-made billionaire ever since Forbes has started publishing this list.

According to Nielsen, a respected consumer and business research organization, in their March 2009 Social Networking Global report – Social Network grew twice as fast as email, search and any of the other popular online sectors.  Just think about that … I (and everyone that I know) use email and search everyday and cannot live without them on a daily basis.  But Social Networks grew twice as fast last year.

Nielsen also reported that ‘Time spent on Social Networks and blogs grew over 3 times the rate of overall internet growth’.

But is Social Networking mainly for crazy American teens, as some would suggest.  No, Nielsen reports.  Their report further concluded that ‘The greatest growth for Facebook has come from people aged 35-49 years’.  They also found that ‘The number of unique visitors who are 65 or older on social networking and blog sites has increased 53 percent in the last two years alone.’  Facebook is the #3 most visited destination for people who are over 65 years old, according to Nielsen.

I make these points to illustrate that we’re at the beginning of a global phenomenon… not the end.   That this could be a significant shift in how we communicate, network, and interact with each other on a local as well as on a global basis.  But this is not just an American phenomenon.   Germany had the ‘strongest growth’ for online communities according to Nielsen.  The UK, Spain, Italy and Switzerland also had very strong growth, according to Nielsen.

The Opportunity

Given the above facts, one may ask themselves, ‘is it possible to create a similar site or business to take advantage of this trend?’  And, is it possible to still create a successful business from this technology or is it too late?  Because, make no mistake.  Myspace is not just a website.  It’s a business!  Facebook and Linkedin are not just places to network, they are global businesses.  Both rSitez.com and Ning, social networking website providers, announced over 150% percent growth in 2009 – that’s more than doubling the business they did before the recession.  These are businesses expanding at an incredibly rapid pace in a global market, even during the worst economy in our lifetime.

Facebook, Myspace, and LinkedIn are some of what we consider the ‘first wave’ sites.  They paved the way for other sites and benefit from this by having tens or hundreds of millions of members.  These mega sites will most likely be around for a long time and will continue to grow globally as long as they continue to provide value to their audience.

However, we’re now seeing what we consider the 2^nd wave of social networking sites.  These sites are niche social networking sites.  They cater to specific groups and niches, instead of a general product like Myspace or Facebook.   To be successful, sites like these will need to cater to the specific needs of a targeted group or audience.  They will need to provide more than technology.  They will need to provide true value and hopefully solve specific problems faced by this niche or affinity group.  In many cases, providing technology will not be enough.  They may need to provide related services as well.  By providing the appropriate technology and targeted services, these sites will be able to prove value and as well have options to monetize this value.

For members of these niche sites that provide real value, it will not be a choice of Facebook or this targeted niche site for consumers.  It will most likely be Facebook AND one or more targeted niche site.   The reality is that no one particular site will serve ALL our needs.  We will most likely belong to multiple sites that serve different needs.  A musician, for example, may use Facebook to keep up with friends, but may go to a site like GenNextMusic to listen to or sell his own tracks, but then post and manage his business profile in LinkedIn.

Therefore, entrepreneurs who understand this opportunity and create a specific niche social networking site to target a specific audience that they can add value to, still has the ability to create a successful online social networking business even today.

In Part 2 of this article we will discuss the technology and leading vendors that you can use to create your own niche social networking site and the advantage and disadvantage of the different ways you can create your site.

About the author
Rohan Hall is the Founder/CEO of rSitez, Inc. (www.rsitez.com), a technology firm that helps entrepreneurs create unique revenue-based social networking sites. He is the author of Stop Working, a book that teaches entrepreneurs how to use technology, globalization, and networks to build a global business. He has developed technologies for a wide range of entrepreneurs and Fortune500 clients including HP, Corning, Oracle, Honda and various others.

In part one I discussed the market and the opportunity that still exist to create niche social networking sites.  With this post I will discuss the technology required to create these sites and the leading vendors you can use to do this.

The Technology

The problem with creating a social networking community site or business is the complexity of creating a site like Facebook or Myspace.  How can you do this?  Is this only for techies or can anyone do this?

Can you make money from this type of online business?  For the answer regarding monetizing these sites, please see my other blog post   How to Make Money Online like Myspace and Facebook.

The fact is anyone can now create their own social networking site and a surrounding business from it.  There are basically 4 different approaches that you can use to do this.  Each approach has its advantages and disadvantages.  The level of technical knowledge you need vary based on the vendor and product.  Here are the 4 main ways you can go about creating your own social networking site and the current market leader with each method.

SaaS Sites

SaaS means Software as a Service.  Vendors that provide these products will automate the creation of the social networking site for you.  The sites are typically point and click to create and completely managed online from a browser.   You will be able to upload logos, banners, and content based on different payment plans offered by the vendor.  Some sites will allow advertising and possibly membership fee collection as revenue options.  The features of the sites will vary depending on the vendor that provides the technology.  Your main job will be to put your own branding on the site, do minor configuration, and invite members to start using the site.  These sites are often white label social networking sites, meaning that you can put your own brand or label on the site to hide most or all of the vendor’s own branding.  In most cases you can do this within a few minutes or a few hours.  After that your main job will be to market the site and manage the site members and content.

Advantages:  You can literally have a social networking site up and running in minutes.  Typically, they have an established and stable architecture.  You never really have to worry about the technology; everything is taken care of for you.  You don’t have to worry about servers, IT staff, backups or other related issues because this is normally included with the service or there may be a cost for some of these items.   

Disadvantages:  You may not be able to completely have your own branding, depends on the vendor.  You may not be able to use your own domain name or there may be an additional cost.  You will not have ownership of the code.  You may not have ownership of the content uploaded to the site.   Normally does not include software development services to modify the standard application, therefore all sites will have the same basic structure and features based on the selected plan.

Primary Vendor:  http://www.rsitez.com/, Ning.com 

Premium SaaS Sites

These social networking sites offer the same advantages of other SaaS sites.  You are able to create a complete social networking site in minutes.  You can upload your own banners, logos, content and configure the site as you like.  These sites can often be 100% white labeled, meaning that you can completely remove the vendor branding and label from the site and replace it with your own.  Your site can be up and live within minutes or hours.  They will have all the same features or sometimes more features than some SaaS sites.

In addition to the SaaS model, these vendors also provide premium software development services to their customer base.  These services include the development of new site features, the modification of existing features and modules, the development of custom themes and widgets, custom developed revenue models or payment options, custom logos and banners, or even major site rewrite.  The goal of these vendors is to provide SaaS sites then surround the site with various software development services to create unique products for their customers.

Advantages:  You can literally have a social networking site up and running in minutes.  Typically, they have an established and stable architecture.  You never really have to worry about the technology; everything is taken care of for you.  You don’t have to worry about servers, IT staff, backups or other related issues because this is normally included in with the service or there may be a cost for some of these items.    Plus, you can have new premium features developed by the vendor that none of their other customers have, or features changed or written to your specifications to create a unique product offering.

Disadvantages:  There may be additional cost for premium features developed by the vendor or to own the code.

Primary Vendor:  rSitez.com

Downloadable Software

Some vendors provide complete social networking applications as a download that can be installed on a server.  Once the site is installed and configured you will have similar advantage of their SaaS counterpart.

Advantages:  You and your IT staff have full control of the application and code.  You may be able to customize the site yourself or hire software developers to make changes to the site for you.  You may be able to change the code to add more features, if the vendor permits this.

Disadvantage:  You will need to pay IT resource to install and support the application.  You will need to pay for servers or hosting, backups etc.  You will need to pay server admins to protect the application from hackers and malicious individuals and programs.  You will need to rely on software developers that may or may not have expertise on the particular application.  You will need to be responsible for the ongoing upgrade, maintenance, and support of the application and their related cost.

Primary Vendor: SocialEngine

Write your Own Code

You may be able to hire a team to build a social networking site for you.  They would write all the software code needed to create the site. Since Social Networking is still a relatively new type of software application you will need to find individuals who specialize in this.  Your local website designer or corporate IT programmer may not have the required experience to build the architecture needed for this kind of application.  The site could be built to your exact specification and once completed can be launched online like any of the other options above.

Advantage:  You will have full ownership of the code and site content.  You can have the site built to your specification.  The site can be branded or targeted with features to any group or audience.

Disadvantage:  There is an extremely high risk of finding experts in this area to develop these products.  There is a very high cost in developing a social networking application from scratch, even if outsourced.  The time to develop a full social networking site and take it to market can be 8 – 12 months or more with an experienced team or longer with an experienced team.  The product could have bugs that are not discovered until after launch and the team may no longer be available to fix the issues.  You will need a development team, design team, server admin team, servers and other ongoing overhead cost to support and maintain the application long term.  With the long development time, you may lose your early to market advantage by time the site is launched.  

Primary Vendor:  No clear market leader

Summary

Anyone can create their own social networking site today.  You can use any of the above options and make that choice based on your research, cost, risk, and value.  Most importantly, if you plan to take advantage of this market you will need to clearly understand how your site will create value for your members, and this value will need to be a part of your offering. 

Please let us know of vendors in any of these categories that you would recommend to other readers to create their social networking product.

About the author

Rohan Hall is the Founder/CEO of rSitez, Inc. (http://www.rsitez.com/), a technology firm that helps entrepreneurs create unique revenue-based social networking sites.  He is the author of Stop Working, a book that teaches entrepreneurs how to use technology, globalization, and networks to build a global business.  He has developed technologies for a wide range of entrepreneurs and Fortune500 clients including HP, Corning, Oracle, Honda and various others.