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There are lots of definitions of social software out there, ranging from the clinical ("software that enables people to connect through computer-mediated communication") to the pragmatic ("stuff that gets spammed").
While doing research for a recent workshop, I came across a useful list of seven social software elements. These seven building blocks--identity, presence, relationships, conversations, groups, reputation and sharing--provide a good functional definition for social software. They're also a solid foundation for thinking about how social software works.
The original list was assembled by Matt Webb (who was expanding on a list created by Stewart Butterfield). Here's a brief definition of each element:
Identity - a way of uniquely identifying people in the system
Presence - a way of knowing who is online, available or otherwise nearby
Relationships - a way of describing how two users in the system are related (e.g. in Flickr, people can be contacts, friends of family)
Conversations - a way of talking to other people through the system
Groups - a way of forming communities of interest
Reputation - a way of knowing the status of other people in the system (who's a good citizen? who can be trusted?)
Sharing - a way of sharing things that are meaningful to participants (like photos or videos)
For the workshop, I borrowed an idea from Peter Morville's user experience honeycomb and created a social software honeycomb. I put identity--the most basic requirement of any social software system--at the center with the other elements grouped around the outside.
Once you dig into Digg, Flickr, Slideshare or Twitter you'll find that the actual implementation of each piece will be different. And not just different, but nuanced in a way that helps establish the overall ambience of that system. For instance, it's interesting to observe how the ease of interaction in Digg drives the swarming behaviour of its users.
The challenging thing about designing for group interaction is that people bend the tools for their own social purposes. I've found these building blocks to be a good conceptual framework for understanding social software. With these in hand we can start to look at how people use these systems to satisfy their personal and social goals.