After the whole Digg incident when its original founders disregarded its users and changed its platform to highlight businesses, one would think that other social networks would learn how to treat its users, especially since it was the downfall of the original Digg (which has since been bought and taken over). The lesson was that no matter how influential you are to businesses, how credible you are for Search Engine Optimization or how many pageviews you can bring from a single popular post, users reign on Social Networks.
The latest Instagram debacle over its possible changes to its Terms of Service in which the legal terminology had its users up in arms last week that the social image sharing site would be able to sell photos of its users to advertisers without credit or compensation certainly had users worry and Instagram felt the impact by losing a quarter of their active users in a one week span. Yet another example of how quickly a social network can see its downfall by not putting your users first, regardless of your social sites popularity or that it is owned by the largest social networking site to have ever existed, Facebook, you are not exempted if you do not always put your users before the business.
Sure it is hard to balance the swinging pendulum of being a business and a social site, but a social site cannot become a profitable business without its users to make it social. The truth is, businesses need to make money, we all get that, but when your entire business is reliant on the activities of others, you need to carefully choose just how you are going to make that money. Some sites think that catering to other businesses would help make them more money (which we saw the demise of the original Digg over that decision) and like Instagram, others try and make money off of their users. However a site thinks it is going to make its money there is always one thing a social site needs to ask itself, “Will these changes destroy trust?”
Any social network that can make it as a business is fooling themselves if they think that trust is not the biggest concern they should worry about, it is, since if people lose trust in their ability to use a social site with confidence that they are not going to be duped or mistreated than you may not have a business you can profit from, not just a little, try not at all.
Losing 25% of their active users is most definitely the second red flag that users have sent as a message back regarding the Terms of Service changes that Instagram was going to initially make come early January, the first red flag was the sheer outrage that flooded social streams everywhere and made headline news on various news sources. The disappointment from users were heard loud and clear from Instagram as they responded with reviewing their legal jargon and that instead of issuing an apology they ultimately pointed the blame at user confusion ( tsk, tsk). Though the initial move in responding is always the correct way in handling negative sentiment, not issuing an apology and blaming users for not understanding is the wrong way in trying to gain or maintain already frustrated users.
Regardless, the trust was broken, people closed their accounts, are now pickier in what they share as they remain on the site, and some have even added copyright stamps on the images they do share. In other words, Instagram is failing because it flopped to think of users first; instead they put the business aspect ahead of its users and as a result are now paying the ultimate price of losing users that make up their business. This is a lesson for any social network or startup, or any other site that is user based. If you cannot keep the trust of users than you are sinking your own ship, there is no immunity, you can cease to exist in seconds, therefore ALWAYS think about the reaction and the trust you have built when making any changes to your community.