Does Real Identity Matter for Networks?

This is why we say “start with the white-hot center” of your network and expand out from there. A dense, highly active network will outperform a larger but less active one every time.

These semi-pseudonymous networks have strong enough network effects to fend off the competition because they’ve given their users a persistent online identity to which they commit. As social creatures, people are emotionally invested in creating, building, and maintaining their reputations — even if that reputation is semi-virtual.

Networks such as Twitter, Reddit, and Snapchat also have usernames that differ from people’s real names, but they’re still around. This is because their user identities, in contrast to the dead anonymous/pseudonymous networks discussed earlier, are persistent over time and partially tied to real-world identities (e.g. handles like “@realDonaldTrump... See more

One important lesson here is that engagement matters to network effects. A first level understanding of network effects is that they occur when more users = more value for existing users. That’s true, but go one level deeper, and you realize it’s actually the amount of usage that matters.

Using real names increases user engagement which causes networks to grow in size, density, and activity — all of which builds a stronger network effect in your company. The more active and committed the nodes on the network, the more powerful the network effects.

On the other hand, networks with profiles that allow for more anonymity often grow more easily at the beginning because of the lower commitment required. Long term, however, we’ve seen them burn out and produce less value on average.

Using real identity in user profiles is not the easiest path when you’re starting out. Real identity requires more commitment from your users and introduces greater risk, so the barrier to activation is often higher.

How did Facebook get people to use their real names when people weren’t yet comfortable putting real-name profiles out in the open (unless it was a resume)? By launching in a constrained environment of perceived safety where it already made sense to show your real name: college. Working within the college niche, they built up a full head of steam e... See more