From favor economy to economy economy

In the latest issue of eWeek, Matt Hicks asks the question, Do Favors or Cash Motivate Online Business Networking? At a recent panel discussion at the Business 4Site conference, social networking site founders Jas Dhillon of ZeroDegrees, Reid Hoffman of LinkedIn, Antony Brydon of Visible Path, and Ben Smith of Spoke offered their opinions.

Dhillon: The biggest motivator for joining a social networking site is the expectation of a mutually beneficial relationship among those in one’s network of friends and business contacts. “Social networking is as old as humanity itself. The whole concept is about reciprocity.”

Hoffman: The editorial value of the connection is more important than any expectation of a direct financial reward. “Like professional networking today, you help your friends and they help you. People accept invites from and send invites to people that they want to help.”

Brydon: “No way. The favor economy is where we started, and we quickly moved to the barter economy and then the economy economy. It’s an ideological point that will become a real issue for what to do to move things along faster [in this industry].”

Smith: Mixed. For enterprises, increased sales is a strong motivator, but not so much for individuals in a public network, which Spoke also offers.

On a related note, in an informal survey of 124 active Ryze users taken in February 2004, 71% reported that they use it for knowledge sharing, while only 55% reported using it for general marketing and only 46% for direct sales leads. 58% use it for business development and finding strategic partners, the #2 use behind knowledge sharing. 49% use it for socializing.

At least for Ryze users, who are admittedly early adopters of the technology, it seems that there’s certainly more to it than direct financial benefits.

As for me, I think looking just for short-term, tangible financial benefits is reasonable, but also short-sighted. If you’re going to make a substantial time investment, it makes sense to expect a return on that investment. But those other things that seem intangible at first—strategic partnerships and knowledge exchange—can actually have as high or higher real return in the long run.