Competing with Social Networks is a Strategy class targeted at students considering careers in high technology, entertainment, social media or consumer packaged goods. It will be useful for students considering consulting careers, careers inside companies as well as for students who are planning to start their own Web 2.0 companies. Frequent protagonist visits will help students establish relationships required to be effective in this space.
The course introduces the network failure framework to help companies that use social networks to build and sustain their competitive advantage. Such companies face two unique strategic problems. First, they compete against a very powerful substitute-real world social network-which potentially undermines their value proposition. The network failure framework addresses this problem by identifying where real-world social networks fail and how to step in to help people establish new relationships, or change their existing relationships. Second, introduction of commerce to social relationships often undermines the latter, implying that firms competing in social industries often run into monetization problems. The network failure framework identifies the kinds of monetization that are viable.
The course is composed of three modules. The first module establishes the network failure framework using the example of on-line social networks and examining while some succeeded while others failed. Here we examine: LinkedIn, Friendster, Twitter and mixi. We then focus on successful on-line social networks and examine monetization challenges and opportunities by comparing MySpace and its music venture to Facebook Connect and Google's Friend Connect. The second module uses the network failure framework to establish conditions under which adding social networks helps or hinders competitive advantage of existing business models. Among others, we consider a matchmaking company, eHarmony, a peer-to-peer lending company, Zopa, an on-line reviews company, Yelp, and finally, Wikipedia Contributors. In the third module, we apply the network failure model to community management. Here, among others, we examine the Presidential campaign of Barack Obama, Young Presidents' Organization and P&G.