Deal Dive: The future of social media is vertical

Discussions about what the future of social media might look like have become increasingly common over the last year. Elon Musk’s acquisition — and gutting — of Twitter, a slew of new social media startups, and Meta’s launch of Threads have made it clear that the next five years won’t look like the last.

But no one actually knows what social media willlook like five years from now. Many startups like Mastodon, Bluesky, Spill, and large legacy players like Meta appear to think that there will be a new catch-all platform that will capture people’s attention in the way that Twitter and Facebook did — and are building to that end. But will everyone simply move to a platform only different in name to continue the same cycle? I’m not so sure.

At TechCrunch’s Disrupt conference a few weeks ago, I caught up with an investor who focuses on social media startups. We got to talking about what interested them most, and they said they were more excited by niche, verticalized entities that targeted a specific demographic or a hobby than by startups looking to build large platforms. They think a platform with a tighter focus will have more potential because it allows for strong communities to be built.

Lex, a social app aimed at the LGBTQIA+ communities, seems like a perfect example of this. The startup just raised a $5.6 million seed round and looks to act as a digitized version of vintage lesbian personals, my colleague Harri Weber wrote. Lex allows its users to find friends, roommates or events, all rooted in the queer space.

“At three years old, Lex doesn’t look like the next Reddit, Tinder or Twitter, although its scope grows as more folks publicly identify as LGBTQIA+,” she wrote.

Startups like Lex make a lot of sense. If you are joining large social platforms like Threads or Twitter to find a specific community, it’s definitely a lot easier to just join a platform that is already focused on and curating content for that community or interest. Why would someone from a marginalized group scroll through irrelevant content, hate and bots to find their community when there’s 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 proven they can produce venture returns.

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Twitch is the perfect example of this. A platform for gamers to connect, stream video, and talk about games, Twitch 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 it was bought by Amazon for nearly $1 billion back in 2015. That was not a bad outcome for its backers by any means.

Sure, one could argue that although quite different in nature, the folks who play video games and the people who identify as LGBTQIA+ make up quite large populations. But most “niche” communities generally tend to be bigger than they first appear. And there are many venture-backed companies seeing a lot of engagement from these so-called small groups.

Folks into fishing are flocking to startups like ANGLR and Fishbrain — people on the latter have recorded over 14 million catches! Alignable has more than 6 million members in 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 targeted at a specific community — Grindr, Christian Mingle and Farmers Only, for example. In both cases, the tight focus removes friction for users — and we all know that users do not like friction!

I can attest that since the beginning of Taylor Swift’s Eras tour, I have had to scroll through endless posts on TwitterX about Taylor Swift that are absolutely burying the content I actually use the app to find. I don’t listen to her music, and promise you I don’t care that she had ranch on her chicken tenders.

This isn’t to say that the new fleet of social media startups that are trying to target everyone will fail. My friend who is a professor says that “academic Twitter” has largely set up a new home base on Bluesky, while my colleague Zack Whittaker pointed out that Mastodon is really popular among those in the cybersecurity community. Even if these platforms don’t end up building the same appeal as Twitter or Instagram, they may still be able to find devoted communities to keep them going.

Platforms like Twitter and Facebook are immensely popular, but they are in no way perfect. As people evaluate their relationship with social media among all the chaos, I think they will look for a better option — or options.

For social media investors, it’s likely the future riches will be in the niches.