Why fear of Facebook is not enough for rivals to succeed

Another would-be Facebook competitor launched on Wednesday, with the unveiling of a social network called Unthink. Much like Diaspora, the open-source Facebook alternative that got a lot of publicity by raising $200,000 on Kickstarter last year, Unthink is positioning itself as a social network for people who are irritated by Facebook’s intrusiveness and/or privacy gaffes — and other new networks such as Chime, and even Google+ (s goog) to some extent, are hoping they can appeal to users who might otherwise spend time on Facebook. But as Myspace found out, competing with Facebook isn’t easy even when you have millions of users.

Unthink founder Natasha Dedis, for example (whose website was down at the time this post was written), tells a story about how conflicted she felt when her son wanted to open a Facebook account, because she resented that the information about him would be used to help target advertising, and she could sense that he felt anxiety about not being on Facebook, since so many of his friends were already there. So Unthink has a manifesto and terms that promise users will control their own information (for what it’s worth, Facebook also promises this) and the site is clearly targeted to those who resent Facebook for its intrusive advertising policies.

But does Dedis’s son care that his account might play a role in this kind of anonymous targeted advertising? That seems unlikely (and is the model that Unthink has chosen, where users choose a brand to host on their page, really that much better?). What’s more likely is that her son just wants to be on Facebook, where the majority of his friends are, and is going to resent having to use some alternative network that is disconnected from that social graph, even if his mom is the CEO.

A dislike of Facebook isn’t going to win over enough users

This is the practical definition of a “network effect,” and it’s the single biggest barrier to entry into the social networking game. The founder of Unthink may have reason to dislike Facebook, just as the founders of Diaspora do, and Unthink’s website crashing on launch, and Diaspora raising $200,000, might suggest there are a large number of people who feel the same way. But just because some early adopters are interested in trying out your site doesn’t mean you have a hope of becoming a real competitor. (Diaspora is currently trying to raise more funding.)

Mike Jones of Myspace

Mike Jones of MySpace

Mike Jones, the former president of the world’s most notorious failed social network — Myspace — wrote a post about the lessons he learned from this experience, including the difficulty of moving quickly to re-engineer a service like Myspace while being part of a massive conglomerate like Rupert Murdoch’s News Corp. (s nws) But he also noted one thing about how even Myspace, with over 100 million users, failed to compete with Facebook. The key to winning and keeping users, he said, was utility — or as he put it, “utility outlasts entertainment.” In other words, it wasn’t enough that Myspace was entertaining or fun, because it didn’t solve a real problem for its users.

In the end, utility is all that really matters

That’s the key question that any competing network like Chime or Unthink or even Google+ has to answer: How is this service providing something crucial for users, some kind of utility they can’t get elsewhere? Bill Gross, the founder of Chime, told me in an interview after the service’s recent launch that he believes the service provides something no other network does, because it allows you to follow only part of a person — i.e., their posts on specific topics — instead of everything they share. Is that enough to make the service stand out? That remains to be seen, especially when Google+ Circles and Facebook’s new smart lists provide much of that functionality.

Google probably has the best chance of meeting the utility case, in part because it already has dozens of other services that millions of users already count on, whether it’s Google Apps (which will support Google+ soon, according to the company) or Google Calendar or Gmail. And chairman Eric Schmidt has made it clear that Google+ is going to become part of virtually everything the company touches. That — and the toolbar that runs on every Google property, alerting Google+ users to messages and comments — could provide enough utility to make the network a success, at least on a small scale. But even that isn’t a sure thing, and Google is as big as companies get.

It’s worthwhile to remember that Facebook didn’t start as a reaction to any of the existing social networks like Friendster; it occurred because Mark Zuckerberg saw a way to provide useful functions (friending, photos, relationship status, etc.) for a market that needed them. And those features, along with newer additions such as social games, are still what tie about 800 million people to the network today. Unless you have a way of providing more utility than that — and not just a place to complain about how you don’t like Facebook — then your competing network is likely dead on arrival.

Post and thumbnail photos courtesy of Flickr user Umberto Salvagnin