The Importance of Social Media for Startups

By

As a writer about all things technology, I am inundated with information about social networking: Did you hear about Project X that was launched today? Which new social game is taking over Facebook? Twitter did what? How many users does Pinterest have, again? How much creepier is Foursquare getting? Zynga bought who?

Yet it became clear today at the Business Insider’s Startup 2012 event at the New World Stages in Manhattan that social media is not in overdrive without reason, nor is it simply valuable for gaining new customers or retaining existing ones. It has become the very basis for many startups’ business models.

The startup owners themselves propagate this concept. Jason Goldberg, CEO of Fab.com, the wildly successful design-based website, told the audience that his business “would not be where it is today without social.” Fifty percent of Fab.com’s business has grown from social.

Facebook and Pinterest are the largest contributors of business for Fab.com. Goldberg noted that since the company launched its mobile app on October 15, 2011, mobile traffic now accounts for 35 – 40 percent of the site’s overall traffic, with iOS-based devices swallowing the lion’s share of that user base at 95 percent.

As other companies with different business models, such as The Huffington Post, breed their own versions of social by encouraging public engagement right on their own blogs, Fab.com had no choice but to acknowledge the overwhelming participation of social contribution. “iPhone and iPad users are incredibly useful and valuable,” Goldberg said. “We have to plan for growing mobile use.”

We continued to see, throughout the day’s event, that many startups are wholly basing their business models on the importance of social technology. Candace Klein, CEO of SoMoLend, told a panel of critics that her lender/borrower-based company has a competitive advantage over others in that it is “social, mobile, and local.” As a peer-to-peer company, SoMoLend takes the essential functionality that Klein sees as inescapable in our mobile-driven lives to the level of productive business partnering.

Peter Vogel described his business, Plink, to the panel of critics and revealed its wholly Facebook-based approach. Through a business model that forms a triangle amongst Plink, the Facebook user, and local restaurants, Plink connects 33,000 business locations to Facebook users, yet is entirely dependent on the Facebook user’s penchant for gaming through social games such as Words With Friends or Farmville.

And Sean Duffy from Omada Health expressed the value of social networking as the basis for his startup company that brings together pre-diabetic patients with the expressed purpose of undergoing a 16-week program with each other in order to reduce the risk of developing diabetes in coming years.

Ultimately, as much as the influx of social content can seem overwhelming, no one is more overwhelmed than those in the startup market today. The value of social media and the role it has yet to play in the success and failure of blossoming businesses is revealing itself daily.




Edited by Stefanie Mosca

TechZone360 Managing Editor

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More