Discussions about what the future of social media is have become increasingly common over the last year. Elon Musk's acquisition (and destruction) of Twitter, a series of social media startups, and Meta's launch of Threads have made it clear that the next five years won't be like the last.
But no one really knows what social media will be like in 5 years. Many startups like Mastodon, Bluesky, Spill, and large traditional companies like Meta seem to think that there will be a new platform that will capture people's attention the same way Twitter and Facebook did, and they are building toward that end. But will everyone just move to a platform with a different name to continue the same cycle? One cannot be too sure about this trend.
An investor focused on social media startups, speaking about what they were most interested in, said capital is more excited about niche, verticalized entities that targeted a specific demographic or hobby than startups that sought build large platforms. A platform with a stricter focus is recommended to have more potential because it allows you to build solid communities.
Lex, a social app aimed at LGBTQIA+ communities, seems like a perfect example. The startup just raised a $5,6 million seed round and appears to act as a digitized version of old personal ads in that group, wrote journalist Harri Weber. Lex allows its users to find friends, roommates or events, all rooted in the same space.
"At three years old, Lex doesn't look like the next Reddit, Tinder or Twitter, although his reach is growing as more people publicly identify as LGBTQIA+," the company said.
Startups like Lex make a lot of sense. If you join big social platforms like Threads or Twitter to find a specific community, it's definitely much easier to join a platform that is already focused and curated on content for that community or interest. Why would someone from a marginalized group search for irrelevant content, hate, and bots to find their community when there is already a dedicated space elsewhere?
There are many such demographic-specific platforms that focus on bringing together people who share the same interests and hobbies. And existing “niche” social platforms have already demonstrated that they can generate venture capital returns.
Twitch is another perfect example. It is a platform for gamers to connect, stream videos and talk about games, it has now expanded beyond its initial focus and is now estimated to have 31 million daily active users. The company raised $35 million in venture capital before being purchased by Amazon for nearly $2015 billion in XNUMX. That certainly wasn't a bad outcome for its backers.
Sure, one could argue that, although quite different in nature, people who play video games and people who identify as LGBTQIA+ make up fairly large populations. But most “niche” communities generally tend to be larger than they appear at first glance. And there are many venture capital-backed companies that see a lot of commitment from these so-called small groups.
Fishing fans are flocking to startups like ANGLR and Fishbrain; In the latter, more than 14 million captures have been recorded! Alignable has over 6 million members on its social network specifically for small business owners. The Mighty has 3,5 million people using its micro-communities focused on different health conditions.
This concept is similar to how people have flocked to dating apps aimed at a specific community: Grindr, Christian Mingle, and Farmers Only, for example. In both cases, the strict approach eliminates friction for users, and we all know that users don't like friction!
For example, following the beginning of Taylor Swift's Eras tour, you have to scroll through endless posts on Twitter X about Taylor Swift that are completely burying the content that is really of interest. You can't hear her music and irrelevant comments are made that I don't care about, like her eating ranch with her chicken tenders.
This is not to say that the new fleet of social media startups trying to target everyone will fail. One professor says “academic Twitter” has largely established a new foundation in Bluesky, while reporter Zack Whittaker noted that Mastodon is very popular among members of the cybersecurity community. Even if these platforms don't end up generating the same appeal as Twitter or Instagram, they can still find dedicated communities that keep them active.
Platforms like Twitter and Facebook are immensely popular, but they are by no means perfect. As people evaluate their relationship with social media amid all the chaos, they will look for a better option… or options.
For social media investors, future riches are likely to lie in niches.
