The only noticeable indication of the game was the din that descended from a third-floor loft. No sign; no one by the door. Now fully imagining one of the more graphic scenes from Eyes Wide Shut, I stepped inside. Fortunately, I spotted not one mask, cape, or ritual sex act.

Instead, men sat shoulder to shoulder around several tables, fingers drumming the green felt, eyes pinned to the dealers. Cigar smoke swam around their heads. One mislaid elbow, and a mountain of poker chips would come crashing down. But these men had grace. No cans of Budweiser, no t-shirts or cheap cigarettes here. The room was packed instead with the kind of men who ooze success, clad in the upscale urban uniform of immaculately tailored suit—no tie, naturally—and armed with the look of confidence typical of those who don't worry about losing a given hand. Here, the winnings weren't cash, but a luxury prize. The European models tending bar, dispensing glass after glass of single malt scotch and top-shelf tequila, were the final indication that this wasn't the typical guys' poker night. I had found the Texas hold'em tournament sponsored by CarbonNYC.

CarbonNYC is an exclusive social network targeted at Manhattan's highly successful, thirty-something, male community. To join, you not only have to be invited, but must pass an approval process for membership that ranks "success" as its primary criterion. Success is not defined strictly by the size of your bank account—its membership does, for example, include a school principal—but the average annual income of a Carbon member is approximately $1 million. Carbon describes its membership as "founders and CEOs of public companies, entrepreneurs, leading actors, entertainment and media executives, renowned doctors and restaurateurs."

Carbon is like a Meetup.com for the affluent. Like Meetup, networking is encouraged through a combination of online and offline interaction. Beyond card tournaments, Carbon's offline events have included dinner parties sponsored by Veuve Clicquot, weekend jaunts to Miami, Land Rover adventure drive, and speeches by world-renowned economists and other industry leaders. While much of the most meaningful interaction takes place offline, Carbon offers and continues to expand its web-based social networking tools as well, enabling members to communicate online about topics like business development and philanthropy. Carbon sees online networking as a key opportunity to sustain community interaction between and beyond its numerous events, of which there are more than 50 each year.

Masquerading for a night as one of Manhattan's elite was not my primary motivation for attending the card game, though I'd be lying to suggest I didn't indulge in the fantasy a bit. I was researching a theory that exclusive social networks, like Carbon, could be the next big trend in the online world. The theory was based on a hunch—the hunch that existing social networking sites like MySpace and Facebook are getting too expansive to offer their members a truly meaningful community interaction. Only when networks regulate membership will members really commit to their online communities.

This may seem counter to all things populist and democratic about Web 2.0, but in order to truly give people the opportunity to embrace their individualism online, social networks will have to start acting more like offline social circles, that is, to be exclusive. Whether through invitation systems, approval processes, or narrowly defined content, these sites will not only have to care about who is using them, but also who is not.

Carbon may strike you non-millionaires as elitist, but the point is not to separate the haves from the have-nots. Rather, the power of exclusivity lies in allowing members of a group—any group—to embrace what is unique to them, temporarily denying the pressure to assimilate within society at large.

For every ASmallWorld, a social network like Carbon that is targeted at the wealthy community, there is a SneakerPlay, an exclusive site dedicated to those harboring sneaker fetishes. Interests can be as important as lifestyle, industries as divisive as economic classes. Whatever the criteria at play, success among exclusive networks will come from the clear definition of the customer and strict discipline of the boundaries for membership.

The Long Tail of Humanity
The next wave in social networking may be empowered access to micro-communities formed around more individualized personality traits. In fact, the rise of the hyper-specific social networks has already begun with more focused networks like igougo.com, bulkd.com, urbanbaby.com, fanlete.com, dogster.com, and inkd.com launching daily.

If you are reading this, and you are not my mom, you probably have encountered—either in his Wired article, personal blog, new book The Long Tail: Why the Future of Business Is Selling Less of More," or any of the countless presentations that have appropriated this idea—Chris Anderson's insightful and incredibly versatile "long tail" construct for explaining how the Internet has made obscure things considerably more accessible.¹ I'll take my turn at appropriating Mr. Anderson's framework in suggesting that the next wave in social networking may be to move people away from the "short head" of community accessibility (mega-networks like MySpace) toward the "long tail" of human individuality, the traits that we share with the few, rather than the many.

To prevent the weight of their success from alienating users like Ms. Thomson, social networks should rethink their approach to creating value. Rather than provide a limitless stock of potential members with whom to make connections, companies would benefit from laying the groundwork for communities to define their own distinctive identities. By doing so, they enable members to embrace their more individual traits by this very involvement with a more specialized, exclusive social network. This new paradigm of exclusivity will value quality over quantity of connections.³

Seeking Optimal Distinction
An annual fee of $5,000, even for millionaires, seems like a lot to pay for a party planner. Jay Friedlander, CEO and co-founder of Carbon, believes that the value provided by his company goes well beyond coordinating get-togethers. While it may be difficult to sympathize with the plight of Carbon's members, Friedlander claims that, because these Masters of the Universe work tirelessly to achieve and sustain their success, they lack the time necessary to find companionship with others like them. Carbon helps people connect.

Without a clear identity, many Americans suffer from an inability to ever completely assimilate."

Friedlander's sentiment seems to be shared by the members themselves. Nico Bossi, a longtime Carbon member who migrated from Rome to New York to run his own luxury-marketing firm, LuxWell Media Group, spoke with me about his membership in the group. For Bossi, the benefit comes from the relationships to be had with other members, peers who can relate to his experiences and empathize with his challenges as an entrepreneur in an international city like New York. It seems that, for members, Carbon is about much more than partying it up with the rich.

Carbon members can't necessarily glide in and out of every social circle, as one might expect. They have a very different perspective on life, their outlook based on a background, value system, and set of experiences that few of us share. Many find it challenging to relate to those who have not experienced what they have.

This sense of displacement seems a common symptom of modern American life, where cultures clash and everyone comes from a complex background. Between 1995 and 2000, 120 million Americans—45 percent of the US population—moved houses at least once.⁴ Twenty-two million moved to a different state. Seven and a half million moved to the US from abroad. With so much mobility, community is no longer easily defined by geography.

But while there may be fewer people to target per site, the membership of an exclusive network offers a well-defined, unified and loyal group."

Without a clear identity, many Americans suffer from an inability to ever completely assimilate. To make matters worse, we are torn between competing impulses to fit in and stand out. To deal with this tension, psychological research suggests that we seek out social sub-groups within larger communities as a way to achieve "optimal distinctiveness."⁵ In other words, we try to blend into the larger community around us by the clothes we wear, the cars we drive, and other symbols of assimilation, but maintain our individuality by finding smaller social groups defined by a particular characteristic—like the Washington Redskins group I spend my Sunday afternoons with in a midtown bar.

Exclusive social networks like Carbon help all of us culturally marginalized citizens rationalize our internal struggle between conformity and individual identity. Because these networks are exclusive, membership becomes an outward indication of social distinction, a declaration of an alterity that exists without isolation. The social identity of the group becomes a composite of uniquely shared traits. Perhaps, paradoxically, the individuality we earn by associating with this select group is more powerful than what we could accomplish alone.

A New Business Model
So how will a bunch of small social networks make money? MySpace's business model is simple, but very effective. It brings a lot of eyeballs to a lot of advertising. Smaller, more focused sites will mean less reach for advertisers.

But while there may be fewer people to target per site, the membership of an exclusive network offers a well-defined, unified and loyal group. More powerful in their definition than their mass, these customers have needs that are characterized by their differentiating values. Already, advertisers are taking note. Nike recently launched an advertising campaign on Sneakerplay, a smart marketing strategy because it guarantees that the message reaches not just a receptive audience, but an audience of influencers, who will in turn promote the brand through word-of-mouth.

Clearly the common bond between Carbon's members is their wealth, and the lifestyle it promotes. Luxury brands like Valentino, Sentient Jet, Jaguar, and Audemars Piguet have taken notice, partnering with Carbon to sponsor events in which members are immersed in the brand experience.

Nancy Berger is a menswear sales and marketing vice president at Valentino, a high-end apparel brand. She sponsored the Texas hold'em tournament I attended with a $10,000 wardrobe to the tournament winner, and has been responsible for planning dinner parties for the group, as well. In the near future, she plans to increase her company's interaction with Carbon members by sponsoring an educational series on men's fashion. Her goal is to build brand loyalty among the members at Carbon, influencers who can proselytize the virtues of the Valentino brand to others in their peer group. She believes that the word of mouth created through a Carbon sponsorship is a better way for Valentino to build brand loyalty within its actual consumer market than the typical "splashy ad campaigns" produced by luxury brands.

The much-anticipated death of advertising is not yet here, and probably won't be for a long time. If anything, the industry seems to just be shifting channels, from TV to the Internet (ergo Google's astronomical market cap). In fact, advertising revenue on social networks alone is projected to reach $2 billion by 2010.

While advertising isn't going anywhere, companies are increasingly placing emphasis on brand engagement over brand awareness. To foster this deeper relationship, agencies are investing in experiential marketing campaigns, like the Valentino-sponsored events mentioned above. According to MICE Group PLC, an experiential marketing agency, 87 percent of the world's top 100 brands rank experiential marketing as one of their top three marketing activities.

Sponsored pop-up stores, adventure races, spa days, lectures, and cooking classes are some of the many manifestations of experiential marketing. Exclusive social networks have the potential to become a powerful tool for hosting and extending these experiential marketing programs, by giving brands access to a unified consumer group with the extensive word-of-mouth potential and broad reach afforded by an online presence.

Scaling Exclusivity
In a business climate where fragmented markets seem always to centralize (à la banking and e-commerce in the late 90s), it is difficult to imagine a macro trend of mass decentralization in social networking. More likely, this market will bifurcate between the mega-networks and the exclusive communities. Mega-networks will continue to serve as destinations for fitting in, while exclusive communities will be where users stand out, satisfying the dual needs for belonging and differentiation.

As, seemingly, with all social networks, Carbon has an appetite to grow; but it must be careful to do so while protecting its brand of exclusivity. The fundamental challenge is to manage this expansion while remaining true to the specific requirements of membership; these networks are only as strong as their members. Friedlander believes that Carbon can grow to about 500 members before it will be forced to expand into other geographic locations. The network currently has a number of "Out of Town Members" from cities like London and Miami. As a critical mass forms in any one of these cities, Carbon will create local chapters there.

My membership will most likely never fuel that growth. Despite my debonair appearance at the poker game, I still have not gotten the invite to join Carbon. Perhaps, I am part of the riffraff to be kept out. But I can imagine a community built for the nuances of my own personality—a place where I can maintain my individuality as a football-loving, design-inspired southerner living in Brooklyn. And then those folks over at Carbon will be my riffraff. So there.

Notes:

1. More information on the Long Tail can be found on Chris Anderson's blog, The Long Tail
2. Vara, Vauhini, "MySpace, ByeSpace?" The Wall Street Journal, October 26, 2006.
3. For more on quality of connections versus quantity of connections, see Tristan Louis' blog entry: "5 Reasons Why Social Networks Fail."
4. Data gathered from the 2000 US Census Bureau at www.census.gov.
5. Brewer, Marilynn. "The Social Self: On Being the Same and Different at the Same Time." Personality and Social Psychology Bulletin, Vol. 17 No. 5, October 1991, 475-482.

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Stuart Hogue is Strategy Director at frog design.