Who Benefits From Co-Creation?

At first sight, it seems that co-creation is at both customer's and suplier's advantage: one (the website) gets a user base and the other (community member) can use a valuable service. But then, one cannot avoid thinking of the effects of a phenomenon well known in the spheres of strategic management of technology: namely the bandwagon effect. According to this principal, the size of the user-base of a product or service adds value to that product or service. Sometimes, the size of the user-base network of an inferior product or service is so big that becomes more attractive than a superior product or service that has a much smaller user-base. This phenomenon is called the lock-in effect.

It is not hard to sense the dramatic importance of this principle in the social media products or services sector since the size of the community network IS THE ONLY value of the firm. When users are performing value-creation activities on a social network (by creating content), they are doing more than building a service for their community. They are also slowly but unavoidably being trapped in a lock-in situation. And sooner or later, they will find themselves in a position of not having the choice but to choose an inferior solution: the one they have co-created!

Now if I haven't scared you enough yet, here is something that could bring horror to every Facebook user. What would happen if after expanding its user-base close to almost all of the market, a social media firm that was offering a service for free decided to start charging its members? Taking into account the fact that the firm's value was co-created with its members, wouldn't that be extortion (or worse theft)? And what mechanism or regulations are there to stop the firm from taking such a decision?

For more about a critical view of social media, visit Singular Technologies.

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