Our funds began with community. The “social” in Social Starts refers to social/mobile technology. One of our first investments was Pinterest. That first generation of community, the Pinterest/Facebook generation, was delineated by scale. Leaders at that point created evocative, even addictive, interactions that could touch billions and essentially created a new kind of public space for celebrating, declaiming, mourning, meeting, snooping, and generating influence (both positive and pernicious). This resulted in extraordinary success.
But the potential to create a new universal community, while possible (think Tik Tok), is exceedingly difficult. So, we stepped away from investing in the “community” category several years ago.
We have continued to monitor this space, however, and at the beginning of 2020, we noted that the market was showing signs of a new generation of community with characteristics much different than those of the earlier Pinterest/Facebook generation. These characteristics include:
- Focus that is narrow and defined, rather than broad and open.
- Propelled by consequential information and actions, rather than commonplace actions.
- Driven by a shift in power dynamics in the area central to the community.
- More around information and research, rather than experience.
- Showing a hyper-active superuser core; a human furnace that powers the community forward.
- Demonstrating a clear business model drawn from the power dynamic of the community, rather than traditional marketing or advertising.
- Centered around novel modes of interplay between passionate amateurs and professionals, especially in areas related to health.
In January, we hypothesized that we would find next-gen communities of value in these areas:
- Health communities in bio, neuro, biome, food, etc.
- Support communities among women, especially young woman under stress.
- Secondary focus: collaborative communities dedicated to creating narrow content delightful to community members.
Now, at mid-year, our conclusions from January seem still essentially true with some notable shifts.
COVID, by driving huge populations under lockdown and forcing them to interact more digitally, has reinvigorated the current dominant community platforms. The pandemic is proving that Facebook is still the main social platform for health communities, for instance, with 4.5M joining support groups in the US, 3M in Italy, and 2M in the UK. In a recent survey, 37% of health professionals recommended Facebook as a way patients could connect with others having the same condition. Since the end of 2019, Facebook has been doubling down on becoming the center for groups/communities with the redesign of apps/web.
We have also seen the emergence of an entire video-centric ecosystem around Zoom that has pushed that company to dizzying heights. And we are seeing strong responses from Google, Microsoft, and other big players to grab chunks of that new mode of social interaction.
With all this tumult, we plan the following community investment focus for H2 2020:
- We should continue our focus on health communities.
- Given the changes in work and socialization, we should increase our hunt for new communities likely to emerge in the wake of COVID. Specifically, we should look for remote workers or workers who only get together physically less often and in smaller groups; geographically distant family members (outside of video conference connection); and school/education-related communities.
- We should also continue to keep our eyes open for activism communities. COVID, the US social disturbances, the high societal sensitivity being seen, as well as the upcoming US election may spur these communities forward.
Investing here will require patience. We may see many companies, but are likely to find few with all the right elements. Even so, winners here will be huge, so next-gen community is worth the hunt.
By Managing Partner Mike Edelhart