Making internet communities work: reflections on an unusual business model
In 2000 and 2001 (during the height of the internet bubble), Bernie Krieger and I wrote an article at the University of Maastricht focusing on a fairly undeveloped concept: online communities. The article, Making internet communities work: reflections on an unusual business model, was finally published in 2003 by the ACM SIGMIS DATABASE (Volume 34, Issue 2), a fairly high impact information science journal. The abstract now sounds rather quaint:
Building Internet communities has been hailed as one of the major strategic innovations of the New Economy, both as a stand-alone model or as a supplement to sustain competitive advantage for normal business models. Community based business models aim to profit from the value that is created when Internet communities solve problems of collective action, by controlling access, aggregating data, or realizing side-payments.The current literature on community based business models relies on methodological individualism to explain why members join and leave Internet communities. However, such an approach cannot sufficiently describe and explain communities because they are by definition more than an aggregation of its members.We, on the other hand, offer a metaphorical approach to conceptualize communities. Metaphors have a double function for communities: to explain the community to its members and thereby legitimize and reproduce it, and to describe the belief of community members to outsiders in order to operationalize it.With the metaphorical approach we develop a framework to build profitable Internet communities. If an internet community can be legitimized and reproduced community-value is created. However, that does not yet mean that it can be translated into profit, as many I Internet entrepreneurs had to realize. To translate the community-value into profit, the communal entrepreneur must position it in its competitive environment.
It is impressive to see, how the idea of building communities online has been mainstreamed in only seven or eight years and what valuation community platforms have achieved. However, it is also impressive in how far the question of positioning a community in its competitive environment has not been solved. Will online community building continue to be the fashionable thing? And will somebody be able to skim the profits of such ventures? – If you want access to the underlying article, please do send me an email!