Dec 2, 2008

The Great Twitter Ponzi Scheme

I’m constantly amazed at the number of articles written about how to gain more followers on Twitter. And the number of people who spend considerable portions of their day following this advice by trolling for extra followers and trying to boost their "numbers."

Because like the current real estate mess that hedged on the erroneous belief that an unlimited pool of buyers existed, the Twitter Ponzi scheme hinges on the equally erroneous belief that there is an unlimited pool of people looking for social media experts.

And of course nothing could be farther from the truth.

There’s an extremely limited pool of people who actually find this stuff interesting. Most of whom. I’d guess, are already on Twitter and so they wind up passing the same links and experts back and forth, like some cyber game of Hot Potato.

Now like any good Ponzi scheme, the Twitter one rewards the people who get in on the ground floor. So the Scobles and Kawasakis all have thousands of followers and followees and have built names for themselves based on the cleverness and/or usefulness of their tweets.

But their success doesn’t make it easier for the next round of wannabe Twitter gods: it makes it harder. Much harder. I mean there are only so many ways to say “Pownce is going out of business” in 140 characters or less. Let alone link to the half dozen articles about it.

This is where the Law of Diminishing Returns, that thing you learned about back in high school economics class, kicks in. Every new “expert” becomes less valuable than the one prior, since there’s considerable overlap in the sort of specialized information they’re providing. By the time you’re up to your thousandth “expert” there’s little in the way of extra value. Except perhaps to see patterns in the chatter though (a) this can be accomplished via Twitter’s “Trending Topics” list and (b) can just as easily be seen by looking at the tweet streams of 500 people as 5,000.

Ponzi schemes work because they promise unlimited return for limited investment. And because some people actually do win: the players who get in early. Well, those early slots are long gone now. So do yourself a favor: use Twitter to connect with the people who actually matter to you. As Mack Collier preaches daily, it’s all about quality, not quantity.

Don’t be a sucker.

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