A blueprint for building social media giants in Europe

There, according to sifted investor and columnist Nicolas Cullen, Three obstacles to creating start-ups on social networking sites In Europe – market segmentation, investor experience, and ecosystem mindset. Among these, segmentation is particularly challenging for early-stage entrepreneurs: How can you even get a social network off the ground when your local market is fragmented by language and cultural norms? It is noted that the US and China, home to a number of successful social media, do not experience fragmentation on this scale.

However, fragmentation is not a death sentence. It just means that European social networks need to build different types of networks to expand their reach.

Avoid networks for one more

Recent successes on social media from the US and China, including the Clubhouse and Douyin or TikTok, are individual or “broadcast” networks – their primary interactions include co-creators broadcasting to consumers (or followers).

These links are relatively distant – there are no direct personal relationships between content creators and consumers. By its very nature, this type of network requires a high creator-to-consumer ratio to ensure adequate participation. So in order to scale, startups algorithmically recommend creators (or content) to followers – something that is easy to do in relatively standardized markets with homogeneous user groups (such as the US and China).

This approach has obvious downsides in a naturally fragmented market like Europe: suggesting a French-speaking comedian to a German-speaking follower is unlikely to lead to meaningful interaction. This naturally fragments the network along linguistic and cultural boundaries.

Focus on individual networks

Instead, European startups must find a way to take advantage of this natural fragmentation. One way to do this is to prioritize networks that allow users to establish direct one-to-one connections, that is, stronger direct personal relationships (eg in WhatsApp). For example, someone in London is more likely to have close relationships with other people in London, unlike in Paris. Londoners who have close ties to Parisians are likely to share some traits with them. In this type of network, users need fewer connections to extract value, and linguistic or cultural differences are no longer barriers because the network reflects the social dynamics of the market.

“European start-ups … must prioritize networks that allow users to create one-to-one connections. “

Europe has created only a few successful social networks, but it is remarkable how closely they adhere to this approach. First, Yubo, a Paris-based social network that allows teens to discover and develop new friendships. Users can discover each other on a Tinder-style interface, swipe up, or interact in small groups via live video. In other words, it emphasizes direct interactions and friendships by connecting users based on interests, language, and cultural preferences. I have Yubo now 40 million users Across 40 countries (many in Europe) and more recently raised 40 million euros From high-profile European investors.

Another more recent example is Peanut, a women-only social network. Not surprisingly, peanuts have many similarities to Yubo. Helps women discover new (platonic) friends and discuss topics ranging from pregnancy to menopause – by connecting like-minded women with similar life experiences. This approach helped Peanut increase its user base by 60% from December 2019 to May 2020 to reach 1.6 mculminating in a Series A funding round of $12 million. Even Skype, the first social (or communications) company in Europe has managed to transcend regional fragmentation such as Free Skype to Skype Calls It is based on closer relationships (professional or personal) between users.

Exceptions apply

It is clear that networks with close and direct connections are the dominant approach taken by European social networks. However, the broadcast approach (or one-to-many approach) may still be valid in specific situations where market segmentation is desirable – typically, vertical social networks into naturally segmented vertical segments.

For example, K-12 education is fragmented across Europe, by language and syllabus, which are set by regulators. Naturally, any social networks in this vertical would need to conform to this structure.

One example here is Polish startup Brainly. Students are allowed to post questions about their homework and receive help from other students using the application (Personal Relationships). Another startup, based in Germany, is going one step further. Knowledge allows students not only to answer questions but also to share feedback and build a social following. In both cases the interactions are segmented by region – but this is desirable because the curricula and language of instruction are also likely to be segmented along the same lines. As a result, Brinley is now finished 350 million users, while Knowunity became the first place An educational app in Germany a few months after its launch.

Market segmentation due to language or cultural differences is a reality in Europe – but this does not close out opportunities for creating distinct social networks. It gives European startups a different set of rules to play with.

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