On size, strength and value of social networks

It’s my son’s birthday today and he is turning 13 – ah, those teenage years ahead! When I drove him to school this morning he was obsessively checking his email and text messages on his new iPhone. He bragged about how many Birthday related texts he was getting on Facebook and thus how ‘popular’ he is. “So how many ‘friends’ do you have on Facebook?” I asked. “About 500.” I raised my eyebrows. “And Sarvenaz (his 20-year old sister) has over one thousand!” he adds to my astonishment.

1000 friends? I may barely remember 1000 faces, and I certainly could not even remember all their names, or have a meaningful relationship, much less a true friendship with that many people. Inflationary times for the friendship currency? The number goes up; the value goes down? Certainly some people are far better than me at remembering names or details about the social life of others. But what does the notion of ‘friend’ mean when it comes by the thousands?

I remember Dunbar’s number of about 150, named after anthropologist Robin Dunbar. According to Wikipedia, this number “is a theoretical cognitive limit to the number of people with whom one can maintain stable social relationships. These are relationships in which an individual knows who each person is, and how each person relates to every other person”. On my LinkedIn network I used to only accept invitations from people I knew well enough that I could make meaningful statements about them, say to a headhunter who was checking a reference. And indeed my number of 1st degree connections – a better term than ‘friend’ – is currently 154. The average number of their connections is also similar to that (159), thus spanning a number of around 25,000 2nd degree connections. That’s a lot of people you could get introduced to by a mutually well-known person. And for the purposes of finding a job (as I am trying to do now) or experts in certain areas, this is very helpful.

While Dunbar’s number limits the number of strong ties, thanks to social networks we now have the tools to maintain much larger networks of weak ties. And as sociologist Mark Granovetter has pointed out in his influential paper ‘The Strength of Weak Ties‘, in marketing or politics, weak ties enable reaching populations and audiences that are not accessible via strong ties. We stand a good chance of finding the next job via an unexpected source, a person who knows other people and companies neither we nor our strong ties know, hence the strength of those weak ties.

It is interesting how many people seem to appreciate maximizing the number of their Facebook friends, LinkedIn connections, and Twitter followers. People love getting attention, and the size of their network seems to boost the size of their ego. While it is true that someone with a million followers will be heard more than someone with a hundred, a big following is not the same as big influence. In a rigorous analysis of Twitter data, authors from the HP Social Computing lab point out that popularity is not the same as influence. To quote from the conclusion of their paper on ‘Influence and Passivity‘ paper: “This study shows that the correlation between popularity and influence is weaker than it might be expected. This is a reflection of the fact that for information to propagate in a network, individuals need to forward it to the other members, thus having to actively engage rather than passively read it and cease to act on it. Moreover, since our measure of influence is not specific to Twitter it is applicable to many other social networks. This opens the possibility of discovering influential individuals within a network which can on average have a further reach than others in the same medium, regardless of their popularity.”

Networks are certainly valuable for each of us individually. Likewise, a network’s value increases with its size. Hence a social networking company’s valuation correlates with the number of members. I thought it was interesting that analysts have put an average value of $50 per member – hence the astronomical valuation of Facebook with 500+ million members leading to $25+ billion. I don’t know how this number is arrived at. When I think back to my bike trip through the Americas, seeing those predominantly young and poor kids in Central- and South-America updating their Facebook accounts at Internet kiosks, assigning a monetary value of US$50 to their free membership seems optimistic, to say the least. I can’t help but thinking that some of these valuations will undergo a ‘correction’ just like many of the hyped business models of the dot.com era came down for a hard landing around 10 years ago.

Lastly, dealing with average value in large number of connections is complex and often surprising. In their excellent book ‘Making Great Decisions‘, the authors Henderson and Hooper give us something to think about: If your business has, say, 100 customers, then statistically 80% of your profits come from just 20% of those customers. So numerically, each one of the ‘good’ customers is on average 16 times as valuable to you as any of the ‘other’ customers. (1/4 of the number bring in 4x profits, that’s 16x profit per customer). I suspect the same is true with regards to influence and value in social networks as well. As with customers, so it is with friends: It’s important to know who the ‘good’ ones are, because they matter so much more.

If business contacts are about making money, social contacts are about making a difference. Which brings me back to family and close friends. Regardless of the size of our own social network, we will always have a much smaller number of strong ties, and those we value disproportionately because they make a big difference in our life just as we do in theirs!

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