Why Metcalfe’s law does not apply to online communities

metcalfe lawRobert Metcalfe invented the ethernet protocol that most local area networks use to communicate with one another.  He is arguably more famous however for his law on the value of networking.

Metcalfe's law states that the value of a network is proportional to the square of the number of connected users of the system.

In other words, the more nodes in the network the greater the value both of the network and each individual node.  So far, so good.

My problem is however that many apply this rule to social networking, and the inevitable consequence is that you get people chasing ever larger numbers of followers and fans in the belief that big numbers are the key to success.

Metcalf himself has commented on the application of his law to social networking at an industry forum event

Metcalfe’s Law points to a critical mass of connectivity after which the benefits of a network grow larger than its costs. The number of users at which this critical mass is achieved can be calculated by solving C*N=A*N^2, where C is the cost per connection and A is the value per connection. The N at which critical mass is achieved is N=C/A. It is not much of a surprise that the lower the cost per connection, C, the lower the critical mass number of users, N. And the higher the value per connection, A, the lower the critical mass number of users, N.

So A would be the value of each connection in your network.  C would be the cost of acquiring that connection, with N the point at which A – C becomes profitable.

Here is where things tend to fall down.  People assume that the cost of acquiring followers on Twitter or Facebook is so low that it quickly becomes profitable and therefore the more you have it quickly becomes easy money.

I think that's wrong.  Dead wrong.  Let me explain.

If a follower falls in the woods

I would suggest that a much more valuable measure of your network is how many of them are actually engaged with you.  A friend of mine for instance has a Facebook page with a large number of fans.  When Facebook launched their public talking about you metric it revealed just how engaged those people were with what he was serving them.  It wasn't pretty.

Whilst on the surface one would have assumed the value of his network was based on 10's of thousands of people, when you took account of the people actually reading his content it fell to 10's of people.

So having a good number of followers is of course important;

Having a good number of people that regularly consume your content is even more important;

Having people that consume your contant AND engage regularly with each other however is where the real value lies.  For you see a community should be just that.  Social media shouldn't be thought of as another broadcast medium.  It's a platform for people to engage with each other as much as it is to engage with you.

Metcalfe's Redux

So to bring things back to Metcalfe's Law.  If you're counting unengaged people as part of your network it's akin to counting computers that aren't plugged in.  So how about this as an updated Metcalfe's Law for the social media age?

Metcalfe's law states that the value of a network is proportional to the square of the number of engaged users in the network.



One thought on “Why Metcalfe’s law does not apply to online communities

  1. We have to remember that Metcalfe's Law was designed to describe hardware networks, it wasn't ever really designed for human networks. Don't think it really works so well for human networks.

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