What is the single most important innovation that Facebook ever came up with?

Before I answer that, let’s think of the real value for users on a social network. Social networks are a classic example of the platform business model where users create all the value and there is very little value until users come on board. Real value for every individual user, then, is the value that his network is capable of creating.

Most communication and networking products have never truly succeeded in capturing this value on an ongoing basis. E.g. I might be connected to a lot of users on a communication product but I need to be actively engaged in a conversation to benefit from these connections.

This is why the News Feed is Facebook’s most important innovation. It allows users to constantly benefit from the surge of activity in their network neighborhood. It’s a stalker’s delight, a lurker’s guilty pleasure. But the News Feed is the single most important innovation that changed social networking from a user-centric to a network-centric activity.

It changes the use case for an entire product category. Post the News Feed, social networking was no longer about staying connected with a friend or even with a group. For the first time, social networking was about staying connected with one’s entire network.

The move from transaction to engagement

The News Feed represents a leap in the evolution of online communication and networking products. Online communication and networking have traditionally been transactional in nature. Email has always been a transactional product. Chat is transactional as well. We use these products only when we want to engage in an actual exchange (of information) with someone else.

Early social networks were built along the same lines. Imagine the days of Orkut, Bebo and, even, MySpace. Social networking, back then, was an extension of the existing communication models around email and chat. You typically logged on to connect with friends. If you didn’t want to connect with friends, you just never logged on. The dominant use case on these social networks was transactional.

The News Feed changed that! It moved social networking from a transactional use case to an engagement-driven use case.

Engagement products need to provide a minimum guarantee of activity to keep the user engaged. Transaction products, in contrast, need to ensure liquidity and the assurance that the user can complete a transaction conveniently.

If you think of Facebook pre-News-Feed, users used the platform largely to communicate with others. The News Feed shifted value in the platform from mere connections (and communication) to content (and engagement).

First among equals?

By no means is the news feed the only determiner of engagement on Facebook. The decision to allow developers to build out an app economy on top of Facebook and the creation of social use cases on top of Facebook (most notably gaming and gifting), clearly helped the engagement cause. However, across all initiatives that Facebook ever took, the one that has been most persistent and that eventually took over as the default home screen – the first ‘feature’ that a user is exposed to on every log in – is the news feed.

The representation of the network effect

In traditional social networking, the feature that the user kept returning to was his own profile, with some notifications alerting specific network activity. This is why having the News Feed as the default Home Page is rather important. It changes social networking from a user-centric to a network-centric activity.

The News Feed embodies the very concept of the network effect. It shows that the network effect isn’t simply a function of the number of other nodes you are connected to but also of the nature of the links that connect you with them. A user’s past interaction with other nodes is a great determiner of the strength of ties between nodes. A real world network would have certain ties stronger than others. The news feed captures this and creates a user-centric view of the network.

This is also why I believe Facebook deserves credit for pioneering the news feed. An activity stream or news feed like feature was already present in Twitter, and before that, on Flickr. But these never gave an accurate representation of the network and were at best, mere activity streams aggregating the activity at neighboring nodes. There was no focus on the nature of the link with neighboring nodes. This is where Facebook’s focus on optimizing the news feed algorithm creates a more accurate representation of one’s network than ever before.

A stronger network effect?

One might argue that the news feed also creates a stronger network effect. With traditional social networks, you could have a few hundred friends but it was arguably the same 10 friends bringing you back to the platform. This meant that losing those 10 friends to another platform could signal the need for you to make the move as well. With the news feed, a stream from a much wider circle of friends constantly hits you. When the central use case shifts from communication with individual friends to interaction with the overall network (via the news feed), it could potentialy make the network more resilient to a situation with reverse network effects.

Beyond social networking

Moreover, this doesn’t apply only to social networks. Any business model which relies on user-generated content can benefit from a well-architected news feed. Even marketplaces, which have traditionally been transactional, are creating engagement with a news feed.

Design principles

The key design consideration is relevance. A news feed should help with personalized discovery. This introduces another tension. Relevance and personalization often tend to reinforce things that we are already interested in. A personalized feed should factor in some form of serendipity to ensure that users do not get increasingly served only those objects that reinforce their preferences. (Designing for serendipity is far from trivial and merits a post in itself, sometime soon.)

If you’re building a networked product, think of what embodiment of the network can be delivered to the user. The News Feed is brilliant because it takes a user’s network and individual actions and builds out something that results when the two are superimposed on each other. This is exactly how our social experience works in the real world. Our world is shaped by a consequence of the actions that we take with our environment. None of that is, of course, simple enough to be replicated through a mathematical model. But the news feed is a great approximation.

Tweetable Takeaways

The news feed moved social networking from a transaction-first to an engagement-first model. Tweet

A news feed helps products deliver value from network effects. Tweet

The News Feed changes social networking from user-centric to network-centric. Tweet

Design principles for building products that capture network effects: Personalize with serendipity. Tweet

Image Credits: @dberkowitz, Creative Commons

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