It's a been a while since OpenBusiness published an interview on The Value of Attention with Esther Dyson.

In that piece, I found her "bar analogy" for social software to be simple yet compelling:

You could think of it like your favourite bar. The social function is similar. You don’t go there because the beer tastes different than from in the bar next door, but because of the people who are there. The value of any bar is in its clientele – usually dependent on the owner/manager and the bartenders, whose job is it to care for his guests. Then you can charge for the beer, or if you sell coffee, the coffee... Some retailers sell clothes, for example, and give free coffee. Both are good business models and can work... or they can be done badly, and fail.

People who aren't already caught up in an on-line community often fail to understand the allure. They seem to think that the virtual nature of the community somehow structures the interaction in a way that precludes the sort of intangible things we're used to in face to face communities.

One of the stories I'll have to tell in more detail after my service at Yahoo is complete (and likely just a footnote in someone's book) is about the Flickr acquisition.

During one of the final internal "sales pitches" for the purchase, I had finished demonstrating Flickr to some important Yahoo's that weren't as familiar with it. One of the technical leaders in the room suggested, politely, that it was a waste of money and that "we could build this in six months."

I honestly don't remember if I responded to his assertion in that meeting or not (I think I did), but to me he was wrong and missing the point. Yes, we could have replicated the technology in six months. Heck, we probably would have improved it quite a bit. But we didn't have the experience to replicate the "feel" of the early Flickr community.

It was a lot like suggesting that you could build another bar across the street from the famous Cheers and expect it to be just as successful.

As for being simply wrong, our ability to build it in a few months didn't matter since nobody was working on it and there were no plans to do so. (Insert rant about how the seldom the "build" option is really exercised after the "build vs. buy" debate concludes that we should not buy.)

Like Flickr, has its own character. Much of that comes from its creator(s). The same is true of MetaFilter (and Ask MetaFilter), Slashdot, Kuro5hin,, and so many other community driven sites.

But it's hard to see this from the outside. Esther's bar analogy is helpful in bridging that gap.

Posted by jzawodn at February 27, 2006 11:03 PM

Reader Comments
# P. A. Monteiro said:

This is a nice post for explaining social software or social collaboration on the net. People who are not part of online communities fail to understand why open source projects work, why blogs work, and most recently why social software is working. I think "they" fail to look beyond the technology--while it is about the technology, it is also about the people.

PS: But, where does the bar analogy leave the non-drinkers?

on February 28, 2006 12:23 AM
# Robert Oschler said:


If it's not a sensitive issue, was the Flickr acquisition an internal idea or did they come to Yahoo looking for a partner?

on February 28, 2006 01:21 AM
# Melissa Della said:

P. A.,

Most non-drinkers still have a place of physical community. To be completely stereotypical, church for example. Yes, you can go find a different church, but the people in the congregation at the first church are what make it special for many people. That sort of thing. :)

on February 28, 2006 01:39 AM
# Pete Cashmore said:


Yep - the bar analogy is a good one. I think there's also network effect here: the more users a social site has, the more useful it is to you. So even if subsequent sites have better technology, they'll have a hard time building a userbase.

on February 28, 2006 05:49 AM
# Brian Duffy said:

"But, where does the bar analogy leave the non-drinkers?"

Any gathering place... a coffee shop, softball league, churches, etc. To many people, the social aspects of the organization are more important than the "real" purpose.

One of the major problems in modern society is that people are becoming more isolated. Suburban development and the car encourage people to remain more insular. Read "Bowling Alone".

on February 28, 2006 06:14 AM
# Brian said:

Nice post, love the analogy too. I think you should expand on the “Insert rant about how seldom the "build" option is really exercised after the "build vs. buy" debate concludes that we should not buy.”

I've experienced a few examples of that and it seems to me that the 'build' never equals what could have been bought, even with the best engineers. I'd rather buy an established bar rather start a new one from scratch.

on February 28, 2006 08:26 AM
# Jeffrey McManus said:

Hosts on The Well have been using the corner pub analogy for at least ten years. This analogy is particularly useful when it comes time to kick the chronic drunk to the curb.

on February 28, 2006 09:55 AM
# Todd said:

good analogy. the community makes the site. Also the old timer's aren't likely to budge off the stool. :)

on February 28, 2006 05:35 PM
# Janet said:

Having run some pretty large online communities (forums) in the past on AOL and elsewhere, I certainly know how powerful the draw of people with shared interests can be. That was what drew people into the early online services, and what kept them coming back day after day after day.

But as earlier online forums attracted more people, their nature changed, partly due to spammers scraping email addresses, partly due to individuals promoting their own agendas, and partly due to spam that got posted in forums faster than it could be deleted. Then, too, there were all the legal and customer service nightmares with forums.

From a business perspective, there weren't and probably still aren't a lot of good ways to monetize a social community. Members of an active community are paying attention to each other - and/or how they can promote themselves - and don't pay much attention to advertisers.

So, how, I wonder, is community or social networking going to play out differently this time around? Will the new social communities last? Or will they, too, lose their luster after a few years?

on February 28, 2006 05:35 PM
# Dan Isaacs said:

There is a reason I've hung out on a Fish BBS for the last 6 years, and it isn't because I care that much about fish.

on February 28, 2006 07:06 PM
# Tim Converse said:

Heh. I mostly agree with this post, and agree that deciding to build a bar (rather than buying a successful bar) is no guarantee that it will be a good bar, or that people will want to go there. And buying Flickr was a good thing.

But with regard to this:

"As for being simply wrong, our ability to build it in a few months didn't matter since nobody was working on it and there were no plans to do so. (Insert rant about how the seldom the "build" option is really exercised after the "build vs. buy" debate concludes that we should not buy.)"

I would agree, but don't agree about why the build option never really happens. For the build option to be credible, it would have to go something like this: "OK, so we were about to buy this company for $20M cash. We think that we can do it cheaper in house - so here's $10M cash. Hire whoever you need to hire to build it, and the money is in escrow - it can _only_ be spent on this product."

Instead what happens, I think, is that no one really thinks it should cost $10M (even if they were about to spend $20M on an acquisition), and it competes with other internal efforts for budget, so there is some way underfunded and half-hearted internal effort that never goes anywhere... Later this is pointed to as evidence why buying beats building, even though there's never been dollar-for-dollar comparison.

on February 28, 2006 10:26 PM
# Jeremy Zawodny said:

Bingo. You've really hit the nail on the head.

on February 28, 2006 10:32 PM
# Jason Scott said:

Across the street from Cheers is the Boston Public Garden, so your business model would be screwed. However, in this new idiot-investment-flipmeat period we've entered, they'd probably just spend millions to buy a portion of the Public Garden to build the bar.

Someone would get rich. Success!

on March 8, 2006 10:10 PM
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