The massive, ad-based, general-purpose social networks aren’t the high-growth cash cows they once were, as Facebook’s recent “growth” numbers suggest. It turns out that many consumers would rather spend their time watching short videos than sharing memes and hitting the ‘like’ buttons. New restrictions on user tracking have also made it difficult for widespread social networks to target ads.
The founders of a new social network called Niche believe that the next generation of social networks may meet the needs of online communities formed around more specific interests, such as hobbies or creative businesses.
“I think the first run of social networking was to collectively connect everyone — it’s your high school friends, your family; it’s a very big patch of connection and [with] “Very little in common,” says Christopher Gulchinsky, CEO of Niche, who previously held C-level positions on both Tinder and Bumble. “But I think the trend in social networks right now is to get smaller, to get more intimate about this relational state of everyone in the group.”
So, in the Niche app, which became available on the App Store Tuesday, you’ll find groups that form around rock climbing or around people who enjoy collecting star Wars memorabilia. Ultimately, Niche will host groups based on many different things, including music artists and business events.
Most importantly, Niche won’t make money by showing ads to people in groups, notes CTO Zaven Nahapetyan, another co-founder, who spent years as a senior director of engineering at Facebook. Instead, Niche is set up so that the platform makes money when it helps creators make money, or when it helps users find valuable creator content.
“We want an app where our revenue comes from the value that people produce, whether that’s digital content sold by an artist or musician, or if it’s valuable from within certain communities,” says Nahabtian. For example, you may have different types of professional networks [or] Fan clubs, people who try to organize events or plan things.”
Since creating and exchanging things of value is fundamental to using Niche, the founders are building their social platform on top of the blockchain. They believe that creating communities as decentralized autonomous organizations (DAOs) on the blockchain creates an economic system that allows members to own, control, and monetize the content they create.
Niche is built using NEAR, a layer-one blockchain technology that allows Niche to issue proprietary tokens to people who join a specific community. It also allows creators, such as artists, writers, or musicians, to issue NFTs representing their work, which group members can buy and resell. Since the DAO is a smart contract, the financial tokens generated and exchanged on the platform can be structured so that Niche takes a small portion of the sales.
But, explains Nahapetyan, a lot of blockchain stuff will happen in the background, and community members won’t need to be Web3 experts to use it. “We make it really easy to create a DAO and add new people in a way that people don’t realize it’s a DAO,” he says.
When you join a club on Niche, the platform issues you a token that represents your ownership of a small portion of the group. “It’s literally just a text link that you get, click on and go through the sign-up steps in the app,” says Nahapetyan. The token costs nothing, and the app creates a free wallet in the background where the token is stored.
Nahapetyan and Gulczynski believe that as groups add more members and more content over time, they will become more valuable.
“The idea is that you boot these combos and then as they become more popular or more in demand, the value goes up, especially if there is a consistent supply,” says Nahapetyan. “So maybe a 200-person rock-climbing group becomes really exciting, and everyone wants to join — then people who got in early can get into the open market and sell their tokens at a higher price.”
Niche isn’t the first social network to organize communities around creator content. Mighty Networks, for example, is built on the same general principle. But Niche appears to be unique in its use of the blockchain as the basis for the economy that underpins the network.
Niche’s ultimate success depends on the creators and whether they are attracted to the new platform. Many content creators use niche platforms, such as Substack and Patreon, to market their content. They also use general-purpose networks such as YouTube and Instagram, which, as Gulczynski points out, were not originally built with the needs of creators in mind.
If Niche proves effective in matching content creators with paying consumers, you might get traction. The app creates a social graph to track users’ interests, but for the purpose of suggesting creators and content to them, not to target them with ads.
“[We’re] Basically encoding the interest graph and then afterwards [we] People hooked up to this graph in a very clever way,” says Gulczynski. “We can do the same thing with the creators on the back end and go to [them] And they say “Well, we have X number of groups with X other people looking for creators.”
Niche, which now has 10 employees with offices in Los Angeles and New York City, just closed a $1.8 million “pre-incorporation” round led by MetaWeb, with some following funding from the Alumni Ventures Group. It also received a grant from its blockchain partner, the NEAR Foundation.