Network generations

It’s interesting to consider the idea of generational networks, where the platform is identified with its age of power-users and new social magnets emerge with each succeeding bracket, based on its particular tastes and modes of communication.

USV – A Social Resurgence

Based on this thesis, it isn’t inconceivable that at some point in time, when the particular network generation fades, so also its social network of choice. And a new concept might thus factor into the analysis – the lifetime value of the network – an estimate that may in certain ways resemble resources sector analytics, where, for instance, an asset of reserves evolves from unproven to proven to producing and, at some calculated point in time, its depletion. (This isn’t different to think about from the funding stages of seed to the succeeding venture capital series to the eventual exit at its public or acquisition value.)

The companies with portfolios of such assets benefit from a continuous economic stream, whereas the companies without, don’t, and are evaluated on the basis of the single finite thing… at least that is the case in natural resources. So, by analogy, it is conceivable that platforms such as Instagram or Snap, or even Facebook proper, are grossly overvalued on the implied assumption of perpetuity, much like, perhaps, MySpace was one time… but Facebook as a company, to a much lesser degree.

If so, the long-term value growth and sustenance of the underlying businesses and their models will depend on their ability to diversify and continuously replace the depleted old with the producing new, or to create some form of functional diversity that might transcend the passing generations.

In this latter regard, commerce and finance come to mind, noting that communities centered around, say, Goldman Sachs or JP Morgan, have withstood the test of sequential generations, and that relatively newer commerce forms, like Amazon and Walmart, are still around and thriving.

It’s interesting to consider these things when thinking about Facebook’s strategic moves over the past decade, or the fact that Twitter and Square share a chief executive.