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Since this is what the Internet does best, wouldn’t it be a good idea to focus some serious attention on this aspect of it? Surely the ability to communicate among a virtual group is the fabled ‘silver bullet’ of the Internet, and has been all along?

Yes and no. It only earns that status – from a business perspective – if virtual communities can be shown to turn a profit. And quite simply, there’s relatively little evidence of them doing just that. Many have tried; the whole GeoCities concept is, in many ways, an attempt to create a whole raft of virtual communities. It’s been a very expensive and unsuccessful attempt. GeoCities is not alone, the Internet is littered with ‘virtual ghost towns, relics of failed communities.

This doesn’t mean it can’t be done. The WELL, CIX and CompuServe were all, in their time, truly successful. By looking at what they did right (and what GeoCities has done wrong) business can learn how to avoid some obvious mistakes.

It seems to me that all of them, even the rather more rigid CompuServe – allowed the users of the system to build the communities rather than imposing their structures from above. And that’s what creates a meaningful community, whether real or virtual.

The communities must be allowed to have their own dynamic, to grow, shrink and fragment as they wish. Fragmentation can be healthy – virtual communities that get too big can fall apart very messily as anyone who tries to wade through the thousands of daily messages the more popular Usenet groups attract these days can attest. They must be able to establish their own rules and codes of conduct.

A recent example is the Hottub channel in lagnet, irc server, South Africa. The chat channel had been going for years and was one of the most popular chat servers for the South African community. Users had the option to choose whether or not to register, but one of the Ops decided to force everyone to register or they were barred from entering the channel. This resulted in many regulars leaving the channel for good and in the end, the community was dissolved. Those still interested in irc chat, joined Blackforest and by the time lagnet reversed the decision to force users to register, it was too late, the damage had been done. Lagnet is now a ghost town.

A successful example is South Africa Computer Hardware Classifieds and Florida Computer Hardware Classifieds. Although many will contend that Internet classifieds are dead, the owner of these sites has built a virtual community of computer enthusiasts where they can buy, sell, trade and even swap ideas. This community of computer enthusiasts is growing fast. The websites boasts a hot rank in Google and other top search engines. Search the keywords: South Africa Computer Hardware Classifieds and Florida Computer Hardware Classifieds to see for yourself. Although still in its infancy, this is the most talked about sites in the computer industry. Every computer vendor worth its salt is scrambling to get their advertisements on these websites. If you are selling computer hardware and don’t have an ad in either of these sites, then you’re not in the computer business. The sites are abound with bargain computer goods and prices so cheap, you’ll kick yourself for buying anywhere else.

The Bottom Line

Once they are there, how can businesses make money from virtual communities? It’s quite simple. They can make money in much the same way that businesses make money from real communities; by providing services that their members want. And, as in the real world, this means understanding the customer.

At a technological level it’s easy to see the Internet as a single, coherent, chaotic thing – a huge computer network. But, it is also dangerous, especially if you’re planning to make money out of it. Follow that line of reasoning and it becomes all too easy to see the users of the Internet as representing an equally coherent market. This is patently absurd, yet we keep hearing otherwise sane business leaders talking about the ‘Internet market’.

Far from being one market, the Internet user base actually represents a massive number of interlocking and overlapping markets. These vary in size – some are fairly large while others are astonishingly small.

If you have the courage to segment your business carefully – perhaps carving its sales strategy into smaller chunks than you would have ever dreamed possible – you may be very well positioned to take advantage of this. It may not seem as sexy as the ‘big bang’ Amazon.com approach to e-business, but I believe it plays to the Internet’s strengths, and thus to the hearts and minds of its users.

In the real world, look to Coca-Cola’s ubiquity in South Africa, 93% market penetration, the corporate logo everywhere – and not a single Coke Superstore.

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