An important aspect of the growth of a social software application is how well it takes advantage of network effects. Not only should users get value from using the application, they should also get value from the fact that other people use the software as well. Typical examples of technologies that require network effects to even be useful are fax machines and email. Having a fax machine or an email address is useless if no one else has one and they get more useful as more people you communicate with get one. Of course, the opposite is also true and the value of your product declines more rapidly once your user base starts to shrink.

The important balancing act for social is learning how to take as much advantage of the network effects of their application as possible yet make sure the application still provides value even without the presence of network effects. Three examples of Web applications that have done this well are Flickr, MySpace and YouTube. Even without social features, Flickr is a great photo hosting site. However its usage of tagging [which encourages discovery of similar pictures] and social networking [where you get to see your friends photo streams] allows the site to benefit from network effects. Even without a social networking component, MySpace works well as a way for people and corporate brands to represent themselves online in what I'd like to think of as "Geocities 2.0". The same goes for YouTube.

All three of these sites had to face the technology adoption curve and cross the chasm between early adopters & pragmatists/conservatives. One thing that makes social Web sites a lot different from other kinds of technology is that potential customers can not only cheaply try them out but can also can easily see the benefits that others are getting out of the site. This means that it is very important to figure out how to expose the pragmatists and conservative technology users to how much value early adopters are getting from your service. There are still only two ways of really getting this to happen "word of mouth" and explicit advertising. In a world full of "Web 2.0" sites competing for people's attention advertising is not only expensive but often ineffective. Thus word of mouth is king.

So now that we've agreed that word of mouth is important, the next thing to wonder about is how to build it into your product? The truth is that you not only have to create a great product, you also have to create passionate users. Kathy Sierra had two great charts on her site which I've included below

What is important isn't building out your checklist of features, it is making sure you have the right features with the right user experience for your audience.  Although that sounds obvious, I've lost count of the amount of churn I've seen in the industry as people react to some announcement by Google, Facebook, or some cool new startup without thinking about how it first into their user experience. When you are constantly adding features to your site without a cohesive vision as to how it all hangs together, your user experience will be crap. Which means you're unlikely to get users to the point where they love your product and are actively evangelizing it for free.

In addition to building a service that turns your users into evangelists, you want to acquire customers that would be effective evangelists especially if they naturally attract an audience.  For example, I realized MySpace was going to blow up like a rocket ship full of TNT when every time I went out clubbing the DJ would have the URL of their MySpace page in a prominent place on the stage. I felt similarly about Facebook whenever I heard college students enthusiastically  talking about using it as a cool place to hang out online with all their other college friends and alumni. What is interesting to note is how both sites grew from two naturally influential and highly connected demographics to become massively mainstream.

One thing to always remember is that Social Software isn't about features, it is about users. It isn't about one upping the competition in feature checklists it is about capturing the right audience then building an experience that those users can't help evangelizing.

Of course, you need to  ensure that when their friends do try out the service they are almost immediately impressed. That is easier said than done. For example, I heard a lot of hype about Xobni and finally got to try it out after hearing lots of enthusiastic evangelism from multiple people. After spending several minutes indexing my inbox I got an app that took up the space of the To-Do sidebar in Outlook with a sidebar full of mostly pointless trivia about my email correspondence. Unfortunately I'd rather know where and when my next meeting is occurring than that I've been on over 1000 emails with Mike Torres. So out went Xobni. Don't let the same happen to your application, as Kathy's graph above says "How soon your users can start kicking ass" directly correlates with how passionate they end up being about your application.

PS: Some people will include viral marketing as a third alternative to traditional advertising and word of mouth. I personally question the effectiveness of this technique which is why I didn't include it above.  

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