OK, so I’m a bad boy. I got the dreaded “OVERSHARE” button on foursquare.
Typically reserved for douchebags who think the world lives and dies on the minutiae of their innane existence, the overshare button gets awarded when you share more than 10 locations in one day.
At least, I think so. I’ve never gotten the button before, and it was only at SXSW in Austin that I compulsively shared everything I was doing. With the notable exceptions of fingernail clipping, random episodes of flatulence, and occasional uncontrollable eye-twitching … for which the world, no doubt, is thankful.
However, I’m now back home, back at work, back in the saddle … and I will limit my check-ins to a more normal number. No more than five a day (unless I’m at Subway, in which case an uncontrollable urge to proclaim to the world what I’m eating may overtake my better judgement in a flood of narcissistic bad judgement).
Way too many people are joining Twitter lately. The wrong type of people – insatiable self-promoters, salesy salespeople, and multi-level marketers.
You can tell who they are, sometimes, by the fact that they follow an ungodly number of people and are followed by an equivalent number … 20K, 30K, 50K.
But that’s not always a good enough indicator. Here’s the infallible way to know:
The huge number of tweets suggests this might be an account on auto-pilot, but maybe not. The huge number of followers/followed also suggests a marketer/self-promoter, but it’s not conclusive. Some people just follow back a lot (I do myself).
The number that you really need to look at is 4.
Only 4 people have consider this uber-tweeter valuable enough to put him on a list.
In other words: he sucks. Don’t follow back … just ignore him. He’s going to unfollow you soon enough anyways.
Ever since Groupon has been shown to be worth (in Google’s greedy eyes) somewhere north of $6 billion, and Amazon propelled LivingSocial into the bigtime with free $10 on anything in the store … everyone and his dog is doing deals:
We officially have deal madness. Deal deafness and blindness are sure to follow. (Just like banner blindness came soon after display advertising hit the web.)
There’s a couple reasons why:
Deals are too popular
Deals are so ubiquitous that they’re no longer remarkable. OK, another great deal from Groupon? Another great price from LivingSocial? Yawn. There’ll be a new one tomorrow. Maybe I’ll do that one.
Deals aren’t deals anymore
Just like in retail, where 50% off is the new 30% off, there are so many companies scrounging for deals that the deals they dig up are not really deals.
For example, check out this travel deal I found in my inbox last week. You can find “deals” like that every day of the week on Kayak and Expedia and a thousand other travel sites. If you think that’s a deal, you probably think the posted rate on the back of the hotel room door bears any relationship based in reality to the actual price you pay.
Deals are dead.
By which I mean, if you’re looking for a business to go into and create significant value, don’t pick this one. The value has been created and distributed already. There’s nothing left for you.
About a month ago LinkedIn (site, my profile) launched visualizations: the ability to see your connections graphed visually.
Once you’ve labled your connections and assigned a color to them, you can very quickly see where your network is strong and heavily linked, and where you have “outlier” connections … people that you’re connected to via only one path.
Here’s my professional network visualization, zoomed out:
It’s pretty clear that a LOT of my connections are with people who work or have worked at Premier, Franklin Covey, or School Specialty … since I spent 15 years in basically the same organization (Premier) as it went through two acquisitions (Franklin Covey, and then School Specialty). And Intel and Intel partners is big: I spent a lot of time working with those companies over the past few years.
Beyond those two … it’s a mix of blogging and social media contacts, friends, agency contacts, and recruiters. Canpages is pretty new yet – I’ve only been in my new role for about 5 months – but is starting to come along.
Remember the Digg effect? It was the second major moniker for a tidal wave of traffic (the Slashdot effect was first).
The tidal wave was caused, of course, by a massive community that shared links. When one became popular and reached the home page, thousands upon thousands of surfers would flood a website … resulting in much the same effect as the barbarian hordes descending on Rome: servers would melt down in flames.
In response, of course, everyone who wanted traffic and thought that sort of disaster was a nice problem to have put the Digg button on their site … one of the first (after Technorati, I think) social sharing buttons on the web.
The old joke used to be: on the internet no-one knows you’re a dog.
That’s less and less true today … today the internet may know that you’re an Alaskan Malamute with a serious flatulence problem. Uh oh.
Who are you online?
I’ve been thinking about this since former-Googler-and-current-Facebooker Paul Adams posted his real life social network deck on SlideShare. In case you don’t have the time to go through all 224 slides, let me give you the Cole’s Notes version:
More than one offline network
Real-life social networks are not evenly distributed, homogenous, and singular … they are unevenly distributed around the various aspects of a person’s life: work, home town, schools, associations, etc. In other words, you don’t have A social network, you have MANY social networks.
Different faces for each network
We generally present ourselves differently in different scenarios … essentially, in different networks. Which is to say, you’re a slightly different person with your friends than your co-workers, or family, or at the school reunion, and so on. Or you choose to preferentially reveal and conceal aspects of yourself to those different sets of people.
More than one online network
A technology-mediated social network that matches your life, therefore, should have the ability to match your offline life … giving you the ability to be how (and who?) you want to be in each of those groups.
Diff’rent strokes for diff’rent folks
In other words, the college buddies get the salacious off-color joke, the family gets the “johnny’s-doing-so-well-in-school” update, and the professional network gets the note about acceptance into a master’s program.
This has worked heavily into Facebooks’ groups feature … which now you can use to hide and reveal bits and pieces of your life as you choose:
Is that really going to work? I mean, aside from the existential angst about personas and faces and integrity and reality … will people actually use this?
Right now, I can only go by my own experience, and it seems to be that I segment my online social existence not by editing audiences for each particular message, but by selecting separate social networks for different types of messages.
The difference may look small, but this is the significant part: nothing is hidden. There are no messages that some friends can see and other friends can’t. Everything is available … if you choose to interact with me in the particular forum that I’m engaging.
Segment by service?
So, in my example, most work-related things go on my LinkedIn account. Most internet/technology/web/mobile musings and shares go on my Twitter account. And comments, posts, photos, and movies that are primarily for actual physical friends and family go on my Facebook account.
Kitchen, office, bedroom
It’s not so much that I have different sets of friends on the various accounts … it’s that there are different kinds of conversations. It’s not so much about having multiple personas … it’s about having multiple interests.
Certain conversations happen in the home that would never happen in the office. Others that you would engage in with the boys after the game wouldn’t happen when you visit your parents.
But I don’t want to hide anything … in fact … in the pursuit of integrity, I don’t want to have anything to hide – from anyone.
I’m an outlier. I have footholds in many social networks.
So you can’t – and I can’t – judge others by myself. It’s silly to think that what I do is what others will do. And frankly … it’s much easier to use one social network (and use the groups feature) than to maintain multiple social presences.
But I like it this way … at least for now.
It remains to be seen how others will react – and how the major social networking platforms will accomodate users’ desires to have move offline relationships online, in all their complexity. Data and relationship portability across social networks would have an interesting effect here as well.
Simplicity – and laziness – argues for a single solution.
Marissa Mayer, former head of the Google search team and now head of the Google’s mobile/social ambitions, has made no secret of her goals. Lately she’s been hyping “contextual discovery” … or search without search.
The idea is simple and compelling: you happen to be at the office, you often go out for a coffee at 10AM, and your phone mentions a new coffee shop around the corner. Or you’re in a new city halfway across the world, and your phone finds a coffee shop to wake up in … without being asked.
The challenge lies in execution: how to be helpful without being annoying. Basically, how to avoid being Cliff Clavin in a pocket.
Microsoft faced a similar challenge a decade ago. After all, 90% of the features in Word and Excel are used extremely occasionally – 10% of the features meet 90% of our needs. So there’s a discovery problem … if you’re Microsoft and want to justify new versions with increasingly more options and features.
Microsoft’s answer was Office Assistant, building on the foundations of Microsoft Bob. The visual representation of Office Assistant was a paperclip … hence Clippy … hence Microsoft Paperclip. Clippy would “notice” that you were doing something (like writing a letter) and offer advice or assistance. Unfortunately, Clippy was intrusive and annoying, and its assistance was wrong, stupid, or just plain obvious – a user experience disaster.
Here’s the question: how will Google avoid the Clippy fate?
Getting the right information at the right time is wonderful, excellent, and good. But there’s more opportunity to fail than to succeed:
Party time! Woohoo!
Annoyance & anger
Annoyance & anger
Annoyance & anger
At first glance, it looks bad, but not too bad. After all, it’s a 25% change of hitting pay dirt right? But actually, it’s much worse than that.
How does Google know what is the right fact … one you’ll be interested in? And not just interested in generally, but interested in now? Can a smart contextual search app trace the route you’ve been following and the speed you’ve been maintaining and make some judgements about whether you’re being hurried and purposeful (and therefore not too interested in random desiderata this morning, but maybe very interested in traffic data) … or leisurely and rambling (and therefore maybe touring, and perhaps interested in historical facts that add color to your experience).
These are not trivial problems. And they’re just the beginning.
How, for example, will Google send the notifications? Will they use the same channel/interface as text messages? Will the user need to set a preference that “now I’m interested in various facts?”
I don’t have the answers … but there are a lot of questions to answer before a truly useful and non-annoying tool can be successfully launched.
If we were on a date, Groupon would be asking all the questions and I’d be playing the strong, silent type.
Group likes me – a lot. Or so I assume. Because Groupon actually wants to know an awful lot about me. And I’m not so sure I want them to know that much about me … even if she has that amazing blond hair.
I like social, and I like what Facebook is doing in terms of instant personalization with sites like TripAdvisor. But I don’t necessary want people, groups, or companies crawling up in my bed and sleeping there. Or setting my alarm. Or phoning my friends just to chat.
Groupon wants the following permissions to sign in with my Facebook account:
Access my basic information
(This is a LOT more than most people who read “basic” might think.)
Send me email
Post to my wall
(Post what, specifically? When? About what?)
Access my data anytime
(Not just when I’m using the service.)
Ready my check-ins
(So Groupon knows where I am.)
Access my profile information
(Maybe Groupon wants to give me a birthday present?)
This is a problem with a lot of companies that want to get social … really social. The problem is that the more permissions a company asks for, the fewer the number of people who will say yes. I might be batting for first base, but they’re trying to hit a home run.
What does it do
Instant personalization takes your friends to the web with you. All the reviews and activities that your connections on Facebook have engaged in now become part of the website you’re visiting. So for TripAdvisor, I can see that my friends have recently reviewed a hotel, where my friends most popular destinations are, and so on. I can also see cities that my friends have visited – or pinned. It’s very cool, very social, very relevant, very interesting.
Google vs Facebook is like the cold war: USA vs USSR. I feel like a small African nation in the 70s … which do I choose to align to?
TripAdvisor is making a determination here – very publicly – that Facebook poses less of a challenge to their business model than Google. (Make no mistake … Facebook poses plenty of business challenges to plenty of sites, TripAdvisor included!) I think they’ve made the right call, simply because Google is much closer to centralizing all the features of the purchase decision all in one place, as Bing has recently done in some verticals:
search (find products/services))
comparison (compare products/services)
completion (purchase products/services)
But this is not an easy call. There are two giants here fighting over the future of the web. Just as in the cold-war world … most companies will need to align in some way, shape, or form. Few will remain completely independent.
Google is trying to own the way we organize and find information – all information.
Facebook is trying to own the way we connect to and communicate with people – all people.
Obviously there is increasingly violent convergence between these two imperatives …
Google’s ambitions impinge on vertical sites like TripAdvisor (and many other sites, like that of my company, Canpages) who, guess what, want to also help people find stuff.
Facebook’s ambitions provide an option for sites that Google is squeezing to provide a different, more social, more contextualized, more personal, and potentially more relevant user experience.
The algorithm versus the social graph
Which will win? The cold calculating machines of Google, adding up links and tags and a myriad of other factors and arriving at a calculated relevance score for any given query? The implicit and explicit advice of my social circle?
Everyone who follows tech and web news today knows that local is the hottest battleground right now. It’s one that I’m intimately engaged in as part of Canpages, one of the leading local search sites in Canada.
The battle just turned up a few degrees.
Today Yahoo! announced their new local focus “neighborhood mix”, now in beta … a combination of local news, events, and – you guessed it – deals. That’s following hot on the heels of Groupon, the poster child for local commerce deals, which recently turned down a $6B takeover deal from Google. And Google of course just announced Hotpot recently, a recommendation engine to add to Places, Google’s hyper-local search/commerce engine.
I haven’t even mentioned Yelp, or Facebook Places, or the entire location-based networks such as FourSquare and Gowalla, or Bing Local. But that’s not what made the battle hotter.
TripAdvisor is the company that turned up the temperature.
TripAdvisor, of course, is the company you turn to in order to find out if the hotel or restaurant you’re going to is any good. They have hundreds of thousands of reviews, most from ordinary people who have gone to the location and reported their findings. I never pick a hotel without checking TripAdvisor first.
Befitting its status as a search engine, Google has always provided easy access to TripAdvisor reviews, ranking them high in search engine result pages (SERPs). But as a local destination and review engine in its own right, Google is not neutral anymore. It’s not even, really, a frenemy. The coopetition is now pretty much competition. And TripAdvisor has decided to stop feeding the troll.
Google Places works by aggregating web content about a location in order to present a searcher as complete a picture as possible (with some restrictions, as they don’t work with Facebook or – now – with TripAdvisor). They’ve had problems before as content providers and creators such as Yelp have felt they are getting cheated as Google essentially uses their content for free. That’s always been the case, of course, but now with Google Places, users may not ever feel the need to click through to any of the other sites to get a fuller picture. Places, in other words, pushes Google over the line from partner and source to direct competition.
This is a devil’s deal, of course: you’re protecting your interests but also harming them. While protecting their content, TripAdvisor is risking their traffic. They can probably do it – their brand is strong, and their direct-in traffic and repeat traffic is probably also strong.
The question is: will more content providers start doing this as well?
Coupons are OK. I mean, everyone likes saving money. And group deals are cool … if we can all save money together, isn’t everyone a little happier?
But with all the hype, let’s remember a few important things:
Coupons are a feature
First of all, from a business (and technology) point of view, coupons are a feature, not a platform. Meaning they need to hook into an existing engine.
The genius of Groupon (and the genius of the entire RESTful, API-centric, connected web2.0-3.0 world) is that they connected with the Facebook platform to drive unprecedented growth. Look for that to get a little harder if they’re owned by Facebook’s arch-rival Google in the future.
But the point is: it’s not the whole enchilada. It’s a piece of the pie (so if you’re going to do coupons, you better have a pie, not just a cherry).
Coupons aren’t for everyone
Having mixed metaphors fearlessly up to this point, let’s just say this: Coupon Ron is not your preferred client. While there’s no doubt that coupons are a great marketing move for some businesses, you are not going to drive long-term profitable growth based on couponing.
By definition, Coupon Ron is fickle … he’ll go to whoever has the latest coupon. That means he’s used to getting a discount. If you’re not giving him one, he’s probably not shopping/eating/consuming/buying your services or products. And that means he’s a low-margin client.
In other words, coupons are not the playing card that a merchant who’s dealing from a position of strength throws down.
So … coupons are great and cool, but there’s a LOT more to commerce, e-commerce, local commerce, social commerce, and any other form of commerce.
And that’s something we’d all do well to remember when the tulip bulb craziness hits.
Apple is a maker. Microsoft is a maker (in spite of some attempts to move to subscription services). Samsung is a maker. But just about everyone else that is a big name on the web today is a connector. Google, Facebook, Yelp, Groupon, and any other ad-supported website, blog, application … they’re all connectors.
A precious few provide services, like 37signals, the WSJ, and so on, but in technology, most are makers or connectors.
The connectors connect in different ways. Google connects through search as well as discovery based on context in cloud-based apps … the intentional graph. Facebook connects based on context also, but growingly via increasingly detailed and predictive information about you and your friends … the social graph. Twitter is the interest graph. Yelp is a town hall or community centre, Groupon is the buying club.
The value of a connector is dependent primarily on two things:
how … connected … the connector is to both buyer and seller
how close in time and space the connector is to the actual point of purchase
That’s why Google, with intent to purchase a key basis of a segment of search activity, and Facebook, with its intimate knowledge of buyers, are incredibly valuable companies. That’s also why deal companies like Groupon have come from nowhere to potentially $3 billion valuations in nothing flat. And it’s a major factor in why the local/social/mobile solution space is white-hot right now.
So that’s today … and, partly, tomorrow. But as Gretzky said … you gotta go where the puck is headed, not where it’s been. So where’s the puck going the day after?
I think we can take as a given that …
Location awareness is only going to grow
Social connectivity is not going to decrease
Mobile devices are going to get smarter/better/faster
What does that mean for the connectors of the future? There’s a bunch of things to think about …
Facebook and I have very different definitions of the word “basic.” To me basic means simple, quick, not too detailed. To Facebook, I think basic means more – a lot more.
I’m pretty promiscuous on social networks like Twitter and Flickr … I’ll follow and add just about anyone as a contact or friend. But Facebook is for friends and family, so I’m quite a bit more selective about who I friend.
And I’m also pretty particular about connecting apps on Facebook … especially when they want to access my “basic” information and it includes:
my profile picture
my gender (I think they mean sex but gender sounds more polite)
my user ID
my list of friends
any any other information I’ve shared with everyone
Realistically, much of this is available by simple web searching and scraping. Practically, however, it’s non-trivial to assemble all of this in an actionable, usable, constantly updated manner … unless I connect to an app or brand on Facebook and allow it.
But is this really “basic?”
To me, basic might mean my name, my gender, things I’ve “liked” on Facebook … and maybe a few others. But does it really include ALL my friends, ALL my status updates, and ALL my other information that I’ve shared to my private, personal network on Facebook?
There is only one reason why Google is investing in Android. And it’s the same reason that Google invests in just about anything else:
To gain access to (and if possible to control access to) information … so that it can sell ads and otherwise monetize data flows and resultant behavior.
Android is of course a mobile play, and mobile/social is where there is tremendous growth. So if Google is going to parlay its amazing success in traditional search, Google needs to be on the phone. In Apple’s new mobile garden, data access and behavior flows are app-centric … not web-centric. They use the internet, but not the WWW.
That’s deadly for Google, because it conceals activity and favors silos of data over the all-knowing oracular Googleplex. This is precisely the reason why Android development kicked into extreme high gear well after the release of the Apple iPhone … when it became clear that apps and not the web was the focus. So Android is a power play to ensure that the mobile internet/web is open to Google (and perhaps favors Google).
But Google has a problem.
And the problem is this: Android is open source and anyone can do anything to it that they wish. More precisely, Android uses an Apache-style license, not a GPL-style license (see a good explanation here). Most precisely of all: organizations that want to modify open source software released with an Apache-style license can integrate it with closed-source code and do NOT have re-release their modifications.
Mix that together with a carrier-centric distribution model where the telcoms all want to do exactly what is in their own best interests … and you have a recipe for fragmentation, for forking, for slowing development (or at least release), and many (slightly) different proprietary forms of Android – if not significantly at the code level, at least at the user interface level.
And that means that Google’s attempt to remain the arbiter of all information in the mobile world is at the tender mercies of the telecoms’ desires to make money. Hmm … smell any problems yet?
MG Siegler laid out some of these problems in a TechCruch article recently: Android Is As Open As The Clenched Fist I’d Like To Punch The Carriers With. Imagine multiple apps stores, where developers have to add and validate their apps in 5-10 stores instead of one. Imagine crapware pre-loaded onto phones, just like cheap PCs at Circuit City, because the carrier will be paid for placement or use. Imagine limits on what software you can or can’t install. Imagine funky UIs dreamed up by HCI neophytes who thinks it “looks cool,” even though it’s completely unusable. All this adds up to a bad user experience and an annoying client/provider relationship … none of which will help in a fight against the iEmpire.
But the worst possible news from Google’s perspective is getting kicked off their own phone platform. And that’s precisely what might happen, if Microsoft’s marketing and financial muscle is put in play. There’s already rumors that Bing will replace Google on Verizon phones. Just imagine the consequences for Google.
And yet, it might serve them right.
Google has gotten to where it is by destroying a lot of business models. Gmail commoditizes email; Android and Chrome commoditize operating systems, Google Docs commoditizes productivity apps … the list goes on, and on, and on.
Wouldn’t it be poetic justice if Android ended up commoditizing Google?
I saw this story on a Hollywood news site earlier today. It’s basically an article dissing Twitter for not being as big or effective a marketing vehicle as some have cracked it up to be:
Why was everyone in the movie business so excited about Twitter? Probably because of its potential, more than anything. The speed and the scale of word-of-mouth on Twitter seemed to manifest a terrifyingly powerful tool, one in which Hollywood was unprepared for.
The actual reality has been something less.
Surveying 1,500 moviegoers last September, research firm OTX found that as a source for word-of-mouth about films, Twitter actually lagged far behind rival social-streaming platforms such as Facebook and MySpace, as well as just basic interaction with family, friends and co-workers.
But the article misses the point. Right now, and for all of its life to date, Twitter has not been the biggest social network, or social news network, or news sharing space … whatever you want to call it.
But Twitter has two things going for it:
You saw it first here
Twitter is where news breaks … it’s always on Twitter first, before it’s on any other social network, or most news sites.
Reach is more than size
How many people you reach is much more important than the simple size your network. If you’re connected with just 5 people, but each of them re-tweets your messages to 500 more … you have a lot of reach. Because of this viral nature that is fundamentally different than Facebook or MySpace … Twitter users have far more potential (and in many cases actual) reach.
The potentially confusing thing is that a large art of that reach is actually on Facebook, MySpace, and other social platforms … because many Twitter users will allow their updates to flow through the internet to all their other online accounts. I personally get far more comments on Facebook on my Twitter postings than I do on Twitter … so anyone who heard of something from me probably heard it “on Facebook,” even though it was originally posted on Twitter.
So while I’m not trying to be a Twitter apologist or fanboy … there are some significant factors to consider when estimating the value of interacting in the various forms of social media.
By utilizing the simplest action-reward gameplay mechanic — borrowed from a Chinese game, which was itself inspired by a Japanese RPG — Facebook’s farm games have quietly turned millions of people into constant gardeners (and consistent gamers).
Cheri Van Hoover, 56, tends a real 11-acre farm in Washington state, but she’s glued to her virtual fields, too. “What these games give me is a sense of control over my life,” she says. “It is a neat, orderly place that I can escape to, and where things unfold in a relatively predictable fashion, and I can work out all of my needs for domination and power and control in a safe environment.”
That’s why I’ve got a few thousand followers on Twitter, why I blog, why I save links to del.icio.us, post videos to YouTube, and so on …
Mobile Safari lacks this, at least so far as I’ve seen:
You can add a bookmark, add a web page to the home screen, or mail a link (how 1990s!) … but I can’t yet find how to share it on Twitter, ideally with the Bit.ly URL shortening engine.
I’m not sure yet if they can be added, or if I’m going to have to move to Opera, or if Apple will update Safari.
All I can say is: there has be a better way than:
Tapping and holding
Selecting “select all”
Switching to a new browser tab with Twitter active
Tapping and holding
Writing a blurb about the link
If and when I find a solution, I’ll update this post.
I find it interesting that many of the scholars and intellectuals of centuries past were, in effect, bloggers:
I want to start with a page out of history—the handwriting of Thomas Jefferson, taken from one of his notebooks on religion. The words on this page belongs to a long and fruitful tradition that peaked in Enlightenment-era Europe and America, particularly in England: the practice of maintaining a “commonplace” book. Jefferson Scholars, amateur scientists, aspiring men of letters—just about anyone with intellectual ambition in the seventeenth and eighteenth centuries was likely to keep a commonplace book. In its most customary form, “commonplacing,” as it was called, involved transcribing interesting or inspirational passages from one’s reading, assembling a personalized encyclopedia of quotations. It was a kind of solitary version of the original web logs: an archive of interesting tidbits that one encountered during one’s textual browsing.
The great minds of the period—Milton, Bacon, Locke—were zealous believers in the memory-enhancing powers of the commonplace book. There is a distinct self-help quality to the early descriptions of commonplacing’s virtues: in the words of one advocate, maintaining the books enabled one to “lay up a fund of knowledge, from which we may at all times select what is useful in the several pursuits of life.”
This is only a small fragment of Steve Johnson’s article, which deals primarily with DRM, text, linking, and digital walls and windows. Highly recommended – follow the link …
In his speech, Pincus envisioned a world that runs on an app economy, where it’s easy to access and use sophisticated software on any device or platform via Web services.
The current platform is booming and has grown tremendously. But it has a chance to become universal, so much so that apps could take over traditional websites as the way users interact with all software. To get there, Facebook faces a critical choice in the next 12 to 18 months, Pincus said.
Pincus added, “It would bother me if (something as innovative as the location-based Twitter game) Foursquare is not built on the Facebook platform. An analogy is Windows. If it had not been the home of Excel or the web browser, then it would not have grown” into Microsoft’s cash cow.
The other choice, he said, is to focus on being a social portal, with a business model supported by advertising.
“They have a more obvious business model around being a portal,” Pincus said. “I hope they find the business model around the plumbing.”
Essentially, he’s saying: you can be a portal and make money off advertising. Or, you can change the game and become part of the fabric of the WWW. One is simple, clear, and fairly obvious. The other is riskier, bigger, but with potentially much more reward. And … it’s much more world-changing.
The corollary that comes to my mind? Steve Jobs telling John Sculley: do you want to sell sugar water for a living, or do you want to change the world?
Good insight into both Facebook’s business model and especially their aspirations … how high they think they can go.
Over dinner at her favorite restaurant, a few blocks from her home in Atherton, California, her strategy for making money sounds simple. She takes my pen and notebook and starts drawing the classic marketing funnel, which starts broadly, with brand awareness, and grows progressively narrower, ending with point of sale. Google, she explains, does most of its business at the narrow end of the funnel, leading buyers straight to places where they can buy what they want. But Facebook, she says, operates at the wide-open end, creating positive brand affiliation and generating demand for products. Google makes money because it commands 50 percent of online advertising dollars spent on that final stage, the one that gets people to make a purchase. But that stage represents only 10 percent of all “ad spend”— here she writes “$690 billion,” then draws an arrow to her “online ad spend” column. Facebook can dominate the other 90 percent devoted to “demand generation” ($621 billion a year!). It’s not unreasonable, she thinks, that Facebook could wind up getting a substantial part of that, every year.
Of course, typically the narrow end of the funnel is easiest to measure, closest to cash, and higher value. Perhaps Facebook will help to change that.
Facebook-home-page ads on average generated a 10% increase in ad recall, a 4% increase in brand awareness and a 2% increase in purchase intent among users who saw them compared with a control group with similar demographics or characteristics who didn't.
But the increase in recall jumped to 16% when ads included mentions of friends who were brand fans, and 30% when the ads coincided with a similar mention in users' news feeds. Brand awareness saw similar bumps: up 2% from just a home-page ad, 8% with a “social ad” bearing mentions of friends who were brand fans and up 13% when a home-page ad appeared along with a mention of friends who were brand fans in the users' news feeds.
Whoever knows what your interests are right now and can package them up for advertisers has the chance to make a lot of money. Of course, Google does this right now every time you declare your interests in a search box and it offers up matching ads on the side of results. But Facebook and Twitter are trying to capitalize on the shift from search to sharing. Your interests are expressed by what you follow and react to “like,” “retweet,” etc., not only what you explicitly seek out through search.
We have all of the “new” we could possibly want, but we’re distinctly lacking in execution with what we have. Clamoring for the next big thing is looking for permission to be messy. It’s easier to latch on to something new and unproven, because then you’re not accountable. Instead, man (or woman) up, and get busy wrangling the things you already have at your disposal to do something worthwhile.
Check out the graph on the left. The curves represent different ideas and different starting points. If you start with 10,000 fans and have an idea that on average nets .8 new people per generation, that means that 10,000 people will pass it on to 8000 people, and then 6400 people, etc. That’s yellow on the graph. Pretty soon, it dies out.
On the other hand, if you start with 100 people (99% less!) and the idea is twice as good (1.5 net passalong) it doesn’t take long before you overtake the other plan. (the green). That’s not even including the compounding of new people getting you people.
But wait! If your idea is just a little more viral, a 1.7 passalong, wow, huge results. Infinity, here we come. That’s the purple (of course.)
We are no longer just consumers of content, we have become curators of it too.
If someone approached me even five years ago and explained that one day in the near future I would be filtering, collecting and sharing content for thousands of perfect strangers to read — and doing it for free — I would have responded with a pretty perplexed look. Yet today I can’t imagine living in a world where I don’t filter, collect and share.
We have analyzed data for 13 countries, for business buyers, and even for voters. My colleagues and I have done profiles for over a hundred clients, profiling Walmart shoppers, non-profit donors, and doctors. In all that time, only one thing has been bugging me: there was no place for Twitter. We fixed that today: