The Power of Networks & Community

David Sarnoff was an American broadcasting pioneer and founded the National Broadcasting Company (NBC) and was President of Radio Corporation of America (RCA).

He ruled over an ever-growing telecommunications and consumer electronics empire which included both companies forming one of the largest companies in the world. He was nicknamed “The General”.

His theory called “Sarnoff’s Law” states the value of a broadcast network is proportional to the number of listeners or viewers.

It was framed to relate the value of the network increases as the number of participants increases, which emphasizes the reach component of most media pricing models.

In radio a single voice is sent to thousands or millions of listeners, same with television, a single broadcast is transmitted out to thousands or millions of viewers.

Sarnoff’s Law therefore would state that a network with 100 people is 10 times as valuable in terms of reach as a network with only 10, all things being equal. (simplified here for easy mathematics!)

Metcalfe’s Law was developed by Robert Metcalfe, a distinguished graduate of MIT and co-inventor of Ethernet and founder of 3Com.

Robert Metcalfe determined that networks that support communications between members, rather than as in Sarnoff’s Law (one source to many), the value of the network grows as the square of the number of users. Now in this hypothesis, people can talk in both directions, and with more conversations occurring simultaneously.

Examples of Metcalfe’s Law would include: A telephone, basic internet (email, not email groups). Essentially Metcalfe’s Law states that a network of 100 people is roughly 100 times as valuable as a network of only 10 people.

Computer Scientist David P. Reed, a renowned expert in the area of computer networking also conceived a law in the area of networks. Reed’s Law, also called “The Law of the Pack” says that the value of the network grows more powerfully that either Sarnoff or Metcalfe would suggest through the formation of groups (which in turn give rise to communities) and the interconnections between them.

Compared with a network of 10 people, a network of 100 people that can talk not only with each other as they would under Metcalfe but also within groups of people is 2 raised to the 90th power. 290.

Reed’s Law totally utilizes and leverages social capital on the net to maximize potential not seen before with networks built using Sarnoff’s Law or Metcalfe’s Law.

Under Sarnoff’s Law, think TV, Radio, and most large centrally managed websites. The gain in value by attracting 10 times the unique members is 10X.

Now, consider your personal e-mail or your mobile phone which operate on bidirectional networks. I can talk to you while you talk to me and while Kelli talks to Anna. These networks follow Metcalfe, a tenfold member increase boosts their value by a factor of 100 compared to what it would have been for a simple one-way broadcast-style network.

Reed’s Law adds an additional layer: groups.

Reed’s Law speaks to the impact on network value by recognizing and supporting groups of members. This is the incredible power and value of social networks and social networking.

Your Facebook friend roster is an online community, and if you are a user, you are part of all of their online communities. As Mr. Spock says, “Fascinating”.

An online community is a bunch of people interacting together. They interact via communication media such as newsletters, e-mail, IM and Social Media.

In online communities, some people stay low, preferring to be an observer, some are just beginning to engage and others are constantly adding value, while others are just adding while working out frustration of not being able to share before, they share too much, I guess we could call this ITMI (internet too much info).

Some people leave. Can you believe it? Some people will actually stop following you on Twitter or de-friend you on Facebook? Yes, they will. They are either annoyed or just disinterested. Hey, some people’s interests change.Maybe the new wore off or they just don’t want to make time for you anymore. They don’t see the same value or participation in the community as you do.

Communities are about connection.

A conversation leads to a connection and connections lead to community and communities are powerful.