Online Communities – the growing phenomenon

If someone asks me to pick one thing that Internet has provided the World, I would pick connectivity. Internet has shrunk the World and brought people closer to each other due to this immense power of connectivity. Communication is easier and faster, Information is cheaper and globally accessible and Collaboration is more possible than ever before. With the emergence of broadband, all this has gained another layer of seamlessness and excellence. People can spend more time connected to the rest of the World. An important byproduct of all this is the advent of online communities.

Communities in form of newsgroups to discuss issues, marketplaces to buy and sell things, sites to share information and so on. Online communities is a growing part of anything and everything on Internet. There are communities to do anything online. Prominent ones that come to mind are Craigslist and Ebay to buy and sell things, Orkut and MySpace to do social networking, Messengers to communicate with people, MSDN and TechNet for technology discussions, Flickr and Picasa to share pictures, YouTube to share videos and many more. People spend a growing amount of time in these communities. And with more eyeballs spending more time somewhere, it becomes an obvious destination for the advertisers.

So what are some unique properties of these communities from the business perspective? This is one business that has an immense first comer first correctly done benefit. If a company gets a community established correctly and gains a critical mass of audience, it is nearly impossible to displace its position in the market. It’s sometimes not that obvious to understand why, but if we think about it, it makes a lot of sense. Just ask yourself some simple questions – where would you like to go if you want to buy something online – a marketplace with more buyers and sellers or less? Or where do you think a commodity will be rightly priced? I think the one with more. Along the same lines, which site will you choose for social networking? One where all your friends are massing or a deserted one? Obviously the former. Where will you search or share pictures and videos? Some place where there is a bigger crowd looking for it. Communities have a huge first correct doer advantage. Ones an online community of large number of users is created, it is very difficult to attract all of them to a new place. I think that justifies the reason why corporate giants are bidding huge amounts to buy some of these online communities. I think everyone knows that Google didn’t pay $1.65 billion to buy the technology expertise of YouTube. It basically bought the user base, or the established online community of YouTube.
Another uniqueness of the online communities is that they grow with the word of mouth. Advertisements can pull the initial customer base to a community, but the growth of a community is basically fueled by the word of mouth along with help from search engines for some communities that provide information. The initial adopters participate in these online communities, generate the buzz around it and pulls the masses over to it.

Online communities can act as a big boon (or bust) for any business. Communities can act as a big source of advertisement, through the word of mouth. People trust (or distrust) a product when others like them recommend it. Online communities are used by people to find recommendation for anything from a restaurant to an electronic equipment. Companies also use online communities to create buzz about their new product releases and getting the feedback for their products. Company representatives participate in the online forums and discussion groups to answer queries from the users of the products. In a way, online communities opened a whole new channel for the company to connect to their customers as well as potential customers.

How can an online business, in specific, use this communities phenomenon? In case of business on web, any company faces a very hard time maintaining their customer base. In most cases the barrier to change is as low as typing a new url in the address bar of the browser. So how can a company retain their customer base? The most common answer given by any dot com company executive will be by keep innovating and staying ahead of the competition. Of course, that’s true, but is there a way to raise the barrier to change for a customer? This is a very important issue and I think the answer lies in the communities phenomenon. Create a community experience around your business. Whoever your customer is, it is always possible to provide them the community experience out there, and ones a community of users is created, it significantly raises the barrier of change for the customers and even draws more customers to your business. The important thing to understand is that almost any online business can have a community designed around it, and with the breathtaking success of this phenomenon, there is no reason not to do that.

3 responses to “Online Communities – the growing phenomenon

  1. Interesting entry. I’m studying Online Communities at University.

    I really didn’t think that businesses could take part on the online Communities. I just had a lecture on the subject of Political aspects of blogging very interesting though.

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