What is a social network business?
With a social network business you’d provide an online platform that people would use to build social connections with others who share similar interests, goals, backgrounds, whatever.
You’d have several monetization options with this kind of business.
Social Network is one of 19 types of online business and considered a Level 5 online business, according to our framework.
6 Levels and 19 Types of Online Business
Level 1 = Novice
Okay for side income or beer money, but hard to earn a living.
Level 2 = Intermediate
Best for earning a living online when you’re starting out, but hard to scale.
Level 3 = Advanced
Easier to scale and higher income potential, but you usually need significant investment of time and/or money upfront.
Level 4 = Superior
Even more scalable and even higher income potential, but also more complex / difficult / expensive.
Level 5 = Distinguished
Most complex / difficult / expensive, but the rewards here can be massive.
Level X = Wildcard
These are the misfits. Many aren’t even considered businesses in the traditional sense, but they are all ways to make money online. You typically need a lot of time, money, or luck to succeed with anything here.
How can you make money online with a social network business?
Here are the legit ways I’ve found to make money online with a social network business…
Create a Free Online Forum
Most of the well-known social networks are essentially big message boards monetized with ads.
Reddit is a prime example, co-founded by Alexis Ohanian in 2005…
Reddit
- Discussion Platform
- $348 Million quarterly revenue
Start a Paid Community
Dan Andrews co-founded the Dynamite Circle, a private community for established entrepreneurs…
Dan Andrews
- Serial Entrepreneur
- $50,000 Dynamite Circle estimated monthly revenue
Members of the DC pay a quarterly or yearly fee.
Start a Facebook Group
Colin Theriot grew his own social networks (Facebook Groups) within an existing social network (Facebook) and has monetized them in various ways…
Colin Theriot
- Founder, Cult of Copy Facebook Groups
- $20,000+ monthly revenue
Pros and Cons of Social Network Businesses
- Quite scalable due to network effects: “the value of a product or service increases according to the number of others using it.”
- Strong passive income potential.
- You don’t have to create any content (the users do that).
- Easy to sell once successful.
- Several monetization options.
- Usually requires a complex set of skills.
- Can be hard to get that initial critical mass of users so you benefit from network effects.
- Moderation headaches.
- Very hard to compete with established players (again due to network effects).
Is a social network business a good way to earn a living online?
It’s an attractive business model but you’d need to bring your A-game and probably hire some A-players if you want to succeed. Don’t expect to get rich quick or easy.
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