The Social Economy

We know that social networks push consumers into traditional markets, but social platforms are also creating new markets, and we’re not just talking about the games that are tied to social media. Social networks have been the birthplace for new systems of entrepreneurship, investment, and consumerism.

Some of the economic engines that have come out of social platforms are the crowdfunding sites, like Kicksarter and Quirky. These are community/consumer driven. Not only do entrepreneurs get a platform from which to promote their ideas, but they receive feedback and money from their potential consumer base. Investors are also given ground-floor opportunities to get involved with new ideas. Quirky has brought more than 225 new products to the market and Kickstarter has garnered more than $284 million for project developers. These two platforms get a lot of press, but they are not unique. There are several other social funding sites.

The social aspects of these platforms give consumers a vested interest in the product they’re buying or helping to create and garage inventors the power to realize their dreams. In the end, these new ways of doing business mean new products, new companies, and new jobs.

Another unique social economy is designed around repurposing extant resources and time using the social platform as a coordination system. A good example of this is AirBnB.com, where people can rent their rooms or homes to travelers (think private, lived-in hotels). AirBnB takes advantage of the social features of their platform to connect renters and travelers and allow them to review each other. Renters enable growth in the tourism economy and add money to their local economies through their increased income, and travelers get a more competitive, more diverse lodging market.

Most of these platforms are intimately linked with traditional social media channels, like Facebook and Twitter, which help to deliver large audiences to burgeoning micro-economies. These staple platforms, which also include Pinterest and Google+, are driving both macro- and micro-economies by simply getting the word out. Brands and entrepreneurs who have embraced them are being rewarded with increased funding, audiences, and customers.

What’s amazing about how social media are creating and fostering new markets is that this is only the beginning. I doubt we could even imagine how these platforms, which so easily connect so many, are going to change the economic landscape of the world.