You are right, it probably generalizes to other industries as well.
Say you have a shop and brand that sells chocolate cake; but a competitor appears that sells ice cream, and their market turns out to be 10 times bigger than yours.
You could try to make a new shop, selling ice cream, but the lack of brand awareness might make it never take off.
So instead you turn your chocolate cake shop into an ice cream shop, and use your existing customer awareness to catapult you into taking half that market.
Good for you, since you now have half of a 10 times bigger market.
Bad for the customers, since they now lose the choice between cake and ice cream.
Ok, maybe the part about "using your existing brand" is where social networks are a bit different from other industries.
There are hundreds of companies that could create a good social network, but the hard part is getting a big enough user base going.
Probably this is less of an issue in the cake industry.
