kidmercury

As I've said many times before on this blog, I'm in the business of making niche online communities. Here are some conclusions I've come to:

1. Online communities serve as filters to find talent. Consider the following:

• iStockPhoto filters for talented photographers
• MySpace and YouTube helps you find musicians
• Threadless helps you find talented designers

2. Talent is the scarcity that drives the evolution of online communities. Increasingly, technology is being commoditized, and value is shifting to talent. In other words, those in the online community business are really in the business of competing for talent, and then learning how to maximize the value of that talent. Companies that commoditize social networking technology so that anyone can setup a social network -- companies like Ning and KickApps -- are examples of how this trend is playing out.

3. Because talent is the driving scarcity, it must be rewarded accordingly. Right now, MySpace, YouTube, and Facebook are worth billions. BILLIONS! But how much are the talented folks who have created that success getting paid?

Well, they may be doing well -- some of them, at least -- but they're not getting a piece of that billion dollar pie. But as technology gets commoditized, and individuals have millions of social networks to choose from, they'll move to the ones that have the talent. Another way of saying this is that they'll move to the ones that have the content and people they want.

This is going to lead to social networks competing for publishers -- and by publishers I mean anyone who creates anything that ends up in a digital format, which would include writers, songwriters/musicians, filmmakers, photographers, web designers, computer programmers. Eventually, as the value transfer from technology to talent progresses, we'll see publishers develop their own social networks/online communities.

Or at least this is what I am expecting and hoping for, as my business is built accordingly.

4. Once publishers have an active community going, they naturally set the stage to become a filter for talent -- just like how MySpace and YouTube, among many other online communities, currently filter for talent.

5. Now the big question: how does anyone make money? The one I am most interested in is using online communities to help publishers gain influence, and then helping them leverage their influence to sell products they like.

Publishers then look for burgeoning "stars" in their own community, and look to help them build their own trusted brand that can then be leveraged to sell products and services they like. So everyone is selling what they want, and the publisher who started and owns the community gets a piece of everyone's action.

In this way, publishers become marketing agents. The relationship between marketer and creator has historically been one that is opposing yet complementary; a "can't live with 'em, can't live without 'em" type of thing. Of course, as we approach 2012, the duality merges.