The Resilience of (Online) Communities
When most venture capitalists think of "barriers to entry", they think of things like: - Intellectual property (e.g., patents, copyrights) - Strategic relationships - Infrastructure and information
But I think the value of community as a barrier to entry is greatly underappreciated. And I'm not just talking about the network effect that keeps competitors away from Facebook. I'm simply talking about the existence of a community at a particular destination site. When you dive into it, there are thousands of examples of online communities outlasting the purposes and active management of the sites they inhabit.
Take my own GoCrossCampus, for instance. It was a fairly small (100K - 200K uniques / mo) gaming site focused on strategy games and the college market. In Fall 2008, the GoCrossCampus team started building a new site -- PickTeams -- and greatly scaled down support of the GoCrossCampus community. Yet the members stuck around in large numbers, continuing to play, chat and complain about the low level of support. (I wrote a bit about the reasons why GoCrossCampus failed here).
And GoCrossCampus wasn't even built to sustain a community of gamers. It was built for large campus events, not a group of dedicated users. Yet the users stuck, even after we wrapped up the company and took the site down to one server.
And it continues. When we took the site down in March of this year, it sent a diaspora of ex-GoCrossCampus users to various sites. To this day, "GoCrossCampus" is still one of the top keywords leading to my blog.
Talk to anyone with experience bringing groups of people together online, and they'll tell you similar stories. Communities are tough to build and tough to disperse -- even when there's a "better" product or social option out there, and even if the site in question isn't "capturing the social graph", so to speak. Look at 4chan, for instance. It's essentially a klugey, spam-filled message board. There are no accounts. There's no concept of "friends". There's no video support (thank god). Yet millions of people continue to visit it every day.
So is 4chan "defensible"? Not in the eyes of most VCs. It has no specific intellectual property or strategic relationships, and it isn't capturing any social graph data or asking for any "investment" of profile info from members. Yet it has stuck around for an absurdly long time in the face of intense competition. Perhaps it is worthwhile to take a second look at our concept of defensibility when it comes to online destination sites.