Room Still in Social Media? Trust Me, There Is.

You don’t have to be a techie to understand that Social Media is all the rage today.  Social Media is not exactly brand new, but it is still grappling with issues of value creation, business models, communication platforms, etc.  And while companies and “experts” are trying to sort these issues out, it is pretty clear that a handful of companies like Facebook, MySpace, Linked-In, Twitter and a few others have established a dominant and almost ubiquitous position in the arenas they serve. 

But what about niche segments like healthcare? Are there still opportunities for companies out there?  You bet.  This week Intangible Insights brings to you a podcast of Joel Selzer, Co-Founder and CEO of Ozmosis, a social network that enables verified, U.S. licensed physicians to exchange medical knowledge. Joel shares his thoughts on some of our standard topics at 2i, including business models, monetization, valuation, and intangible attributes, such as the trust factor. Even during the idea stage of Ozmosis, Joel and his team were well aware how important “building trust” would be to their community and brand. Ozmosis’s tagline is “The Physician’s Trusted Network”.  (See our related blog “A Unit of Trust is Worth How Much These Days?”). 

You can listen to the podcast in its entirety or in four parts that track the summary below. The podcast is on the next tab over and you can also download and listen to the podcast here.

Following are a few highlights:

Part 1 – Background of Ozmosis; Role of Trust in the Network

• Ozmosis is a trusted venue for physicians to conduct highly private, peer-to-peer discussions related to clinical, practice management and health policy topics. Physicians can present challenging cases, participate in virtual journal clubs, ask and answer questions and join group discussions.  
• Trust is essential to Ozmosis’s model and, in fact, to the entire eHealth sector. To ensure a trusted environment, Ozmosis verifies the identity of every physician before they gain membership in the network (i.e. Ozmosis verifies that they are in fact a US licensed physician and that the online identity is indeed who they claim to be). Once online, physician’s can see the real names and credentials of their colleagues and can label information as to whether they trust it or not.
• Unless a physician explicitly opts-in to being contacted by a healthcare client, all of their information and online communication is strictly private and confidential.

Part 2 – Monetization of Social Network User Bases

• Traditionally, the main revenue strategies for social networks are leveraging their social graph (directing information, aka advertisements, to very specific groups) and aggregating data for market research.
• The next generation of social networks will bring much more exciting revenue possibilities by leveraging the stickiness of their network to become a web based operating system or application platform.  The leading social networks (facebook, LinkedIn, MySpace) have been experimenting with how to monetize their network like an operating system to deliver other revenue generating products and services.

Part 3 – Valuation of Social Networking Companies

• Not every social network member is equal. You cannot just look at the number of users on the site with a certain number of page views and multiply this by the average internet advertising event.  Just look at how recent changes in the valuation of Bebo, facebook and LinkedIn have been affected by their respective user demographics and user interactions.
• Social networks must look at the lifetime value of each and every member. They must look at the type of users and their respective level of engagement compared to the demographic targets and valued activities that drive its business model.

Part 4 – Thoughts for Social Media Entrepreneurs

• We are just at the tip of the iceberg for social media. Social media sites like facebook and Twitter are growing massively in very short periods of time and getting the attention of mainstream press.
• We will see much innovation and growth around mobile and location based social networks (rather than demographic networks).
• Social networking is just a tool to facilitate the sharing of information or services. You must use the network to deliver value by solving a specific need or problem. Find the need, understand the business dynamics that drive it, and then build a community to foster interactions that are valued by the participants and your clients.

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Filed Under Business Valuation, Intangible Assets, Internet Company, Internet Trends & Drivers