Attention VCs – Please Read Before Funding Another Social Network

Here’s a bit of free (yet unsolicited) advice for VCs. And I’m not trying to be too presumptuous, pessimistic, or mean but if you are trying to fund a new social network – whether niche based or otherwise – I’d seriously reconsider.

As part of that target market and a web strategy consultant, I have the distinct advantage of both knowing who your users and competitors are. Yesterday, for example, I told several friends about the features of some other social networks. In our conversation, their conclusion was pretty simple – “I don’t care what the features are, if my friends aren’t on it, I won’t be.”

I know there is a lot of buzz around the idea of niche based social networks. But whether it’s based around a store, sports, or person, in many cases, it just won’t work – WalMart’s The Hub is only one example of that.

Is the behemoth MySpace generally slow, sometimes crude, and often painful to the eyes? Most definitely. But guess what, people don’t care – it’s a place for friends. It’s a place for their friends and that’s what matters most to them.

Now, perhaps you think that MySpace (or rather Fox Interactive Media) might buy out your technology. For starters, that’s a bad way to think about business. More importantly, MySpace has proven they’d rather squash competitors and adapt their ideas then play nice and/or purchase their technology.

So, don’t be convinced by the buzz words you read in a business plan about The Long Tail, The Wisdom of the Crowds, etc. I like those ideas and think they add a lot to the discussion – but they should not justify the investment of your money.

The preceding was a VCSA – a VC Service Announcement – courtesy of Ken Yarmosh.