CHALLENGES OF VIRTUAL COMMUNITIES

There is a critical short-term problem for all virtual community pioneers, the time it takes to establish the critical mass of members. It is unlikely that the virtual community will show anything but a financial loss in its early years, and attempts to raise short-term income from the new virtual community are likely to fail.

Another challenge is that virtual communities have very low barriers for exit, meaning that it is difficult to keep that critical mass of members for long periods of time.

The threat that Virtual community pose to larger organizations as the “piranha” (fish) effect. Just as piranhas reverse the principle that bigger fish eat the smaller fish, so too virtual community become a threat to big corporations if they flourish in numbers. If more than a handful of these communities survive the first two or three years and are successful in wooing proportions of the customer base, they pose a long-term threat to larger organizations.

Virtual community will also not be eligible for every business application. For example, it is unlikely that many people will want to regularly visit a financial services virtual community. There is a challenge to this type of virtual community, as people are generally interested in each other and not in the latest financial offerings or payment plans.

Raise the point that the discussion traffic on a virtual community is not evenly spread over 24 hours seven days a week. There may be long periods of inactivity followed by a surge of messages over a shorter time period. Different groups may also be active at different times, so there is a tendency for information overload.

 Building Virtual community poses major challenges and risks to the organizers as well as the staff responsible for their design, launch and operation. The corporate landscape has become littered with virtual community initiatives that failed to deliver tangible value. Poor preparation, unrealistic expectations and no clear sense of how the virtual community will support organizational goals are cited as reasons why virtual communities fail.

One of the greatest challenges is convincing both potential members and associated companies that participating in Virtual community is worthwhile. The greatest challenge for management is converting traditional

Technology can also be a challenge. Community technology is designed for communities, but is experienced by individual members Therefore, having to take into consideration so many users’ needs, designing the appropriate technology is difficult. In fact, this challenge is one of the reasons why large companies may avoid launching their own virtual community.

Another issue is the return on investment is generally long term. Those who expect an immediate return on investment may become frustrated. Significant revenues are unlikely to be forthcoming until certain thresholds have been reached, and therefore, initial investments are generally made in an environment of uncertainty and risk. Revenue streams such as member fees are likely to slow the growth of membership substantially and other competing virtual communities may offer the same service for free.

BY FOYA JOHN H.

BAPRM 42553