stargeek
Yahoo! 360, Social Networking and Viral MarketingYahoo! 360, Social Networking and Viral
|
 ©2004 - The Caring Enterprise Coach
I've been approached by a major
US book publisher to write a book on New
Collaborative Enterprises, with the rather unwieldy working title
shown above, and
also by several universities to develop a Distance Learning program on
the same subject, based on my experience advising over 100
entrepreneurial businesses. Given my new priorities, I don't know
when,
or even if, this will get done, but in the meantime, I'm going to blog
on the subject from time to time. Recently I've written about Avoiding
Landmines and about Innovation,
two of the 15 steps in 'The Process'. Today's article is an overview
of
Viral Marketing, the principal way that successful entrepreneurs find
new customers.With every additional business scandal, the public becomes more cynical about advertising, PR and product claims. The concept of viral marketing is not new: Seven years ago Jeff Rayport of Fast Company introduced its six fundamental principles: Use stealth and subtlety to convey your message, give stuff away free up-front, exploit peer-to-peer networks to spread the message, make the message memorable and 'sticky', exploit the strength of weak ties, and work to reach a 'tipping point'. But last year Rayport's message caught fire when Malcolm Gladwell's book The Tipping Point became a best seller, provided more detailed evidence of how well and how broadly these six principles work, and gave detailed instructions on how to employ them. These two factors -- the increased distrust of corporate messages and the new recipe for 'doing' viral marketing, are taking viral marketing mainstream -- it's no longer just a technique for those that can't afford advertising, but a technique to replace advertising. Using these principles isn't difficult, risky, expensive or demanding of great patience or energy. In my earlier posts I explained that one of the biggest landmines for entrepreneurs is getting into 'copycat' businesses where it is next to impossible to differentiate your product or service from the next guy's, and also explained that the innovation process starts with listening to the (current or prospective) customer. So if you've done your research, and you have a small group of customers who agree that your product or service is innovative -- better or cheaper or faster or in some way significantly distinguishable from everyone else's, then all you need to do is to deliver to that group of customers, and let them be your marketing team. As Gladwell's Tipping Point describes, some of the most successful books and records, some of the most infectious ideas, and some of the fastest growing new products, like TiVo, basically found their market without a penny spent on advertising or promotion. Let's look at an example. I know two people who went into the same business -- plastic decking products -- one successfully and the other unsuccessfully. The unsuccessful guy started the business in the 1980s. He brought the technology from Europe, where it had been used in specialized military and other niche market applications, and knew that it had enormous potential in the consumer marketplace. But because he was an engineer, and more comfortable with the manufacturing process, he started with the product instead of the customer. He spent a lot of money perfecting the process and then tried to sell it to major hardware and home stores. He had no customers, no leverage to persuade the stores there was a market for the product. In fact, in those days plastic was considered a shoddy material, his product's light weight and simple assembly was a disadvantage in the minds of the purchasing managers he spoke to. The business never got off the ground. Now flash forward a few years. The successful guy started the business in the 1990s. He didn't know anything about how to engineer the product. What he did know was that there was now a need. The cost of wood products was soaring. People didn't have time to maintain wood fences any more. And there was a new scare: Creosote, the chemical mix wood was soaked in to preserve its life and reduce maintenance, was now considered a carcinogen, and was starting to be banned in children's playgrounds, so there was a new acceptance of the newer, more durable plastics in swing sets and other outdoor furniture for children. So our successful entrepreneur brought in from Europe small quantities of a new plastic decking material, and went and visited contractors, not retail stores. He resold the material at cost to the contractors, who were able to offer it to their customers at the same price as their heavier, higher-maintenance, carcinogenic products. Not surprisingly, they were a great success. Our entrepreneur brought in some larger quantities, and began talking with the European manufacturer about setting a plant in North America. He didn't make a single sales call -- the contractors spread the word for him, among themselves, and the end-customers also showed off their slick and unique new decks to their neighbours. By the time our intrepid entrepreneur went to visit the big hardware and home stores, they had already been besieged with requests for the product and no selling effort was needed. The European manufacturer helped the entrepreneur build the North American plant, the banks, already aware of the demand for the product, offered very low-cost financing for its construction, and all the entrepreneur had to pay was a small royalty on sales to the European company. This success is due entirely to innovation focused on recognizing and responding to a customer need, and on viral marketing. There was virtually no risk, no selling effort, and no out-of-pocket traditional marketing (advertising). Although you can get the impression from browsing the Internet that viral marketing is a Web-based advertising process, or even that it involves mass e-mailing. This is a misrepresentation of what viral marketing, as described by Jeff Rayport and Malcolm Gladwell, is all about. It is nothing more than spreading the word about your product or service by customer word-of-mouth. Talk to the most successful contractors you know, and you'll likely find they turn away excess business, and do no advertising or stuffing of mailboxes. Their new customers come entirely from referrals from existing satisfied customers. They do no selling and no marketing. This brings us to the most critical precondition for successful viral marketing: Reputation. Nothing will sabotage and choke off viral marketing success faster than a sudden reputation for poor quality or poor service. If our decking entrepreneur had used poor contractors to do the work, or had failed to correct any early product quality issues quickly, he would not have succeeded. Probably the most important of Rayport's six principles is the fourth one: making your 'message' memorable and 'sticky'. Viral marketing requires your product or service to come up in your customers' conversations with others. That means, like TiVo, there needs to be something about it that people will want to talk about. And a picture is worth a thousand words. That's why those amateur photos at Abu Ghraib have done so much more to turn public opinion against Bush's war than the much more dangerous Patriot Act, the abrogation of the Geneva Conventions, and all of the other more profound but less visceral evidence of executive deceit and abuse. And why the decks set up at the home shows, and on display in your neighbour's yard, are so much more compelling than the glossy brochures that tell you about the low maintenance and the safety of the product's composition. |
I'm sorry I disagree.....[read response after article].......
The next big thing in online social networking.
According to Reuters Social networking sites, which look to introduce friends of friends or people with common interests, have grabbed the attention of Internet users and venture capitalists but many are still looking for ways to make money.
Online dating siteTickle ( >2million profiles) launched a People Search service on its network that includes AskJeeves' . The partnership fuses the uncertain social networking phenomenon with a search model that has proven invaluable to both consumers and marketers on the public Internet.
Kolabora news expert Scott Allen blogs in his Social Networking News: According to Tickle CEO James Currier, “Search is a natural way for online social networking to move forward”. (..) "Tickle people search brings online search full circle, back to letting us find the right people to talk to.”
Reuters press release (April 22)
read more in the full articles quoted from three blogs
- Ask Jeeves Brings Search to Tickle (ClickZNews)<
BR>- Jeeves, what’s the next big thing in online social
networking? (Online Business
Networks)
- Education — the real "next big thing" in
online social networking (Online Business
Networks)
I'm certainly in favor of putting social networking into context - but search is not a context. It's sort of like getting it backwards.
It's not about bringing search to social networking. It's about bringing social networking to everything.
 Recent reports of the demise of Social Networking Applications (SNAs), voted "technology of the year" by Business 2.0 just two years ago, are increasing. Most recently C|Net's Molly Wood reported on Five Reasons Social Networking Doesn't Work. While LinkedIn and eCademy are hanging in there, many of the other entrants into the SNA space are really struggling. I reported last year on what I thought was wrong with the first generation of social networking applications, and I haven't seen any significant improvements become mainstream since then. Wood complains that existing SNAs offer the user little to do, take too much time, don't provide a customized audience, are socially awkward, and don't provide much that other features of the Internet don't do as well or better. It's not clear what problem they're trying to solve, other than to provide a list of not-very-well qualified contacts for people online who are looking (mostly for customers, employers or dates). They remind me a lot of Chamber of Commerce meetings, with consultants and agents outnumbering 'real' businesspeople, five sellers for every buyer. I belong to several SNAs but use them rarely, since my blog provides me with a more robust network than any SNA could ever hope to do. The challenge, as with most business and social problems, is getting attention. Because good stories, useful, researched advice and helpful, informative conversations command attention, these are the tools of the trade in face-to-face networking events. Face to face meetings also provide a huge amount of non-verbal information that allows people to make considered judgements and to establish trust, which virtual forums can only accomplish awkwardly, and over time. The lowly telephone, and Skype, are an improvement. Most of us can converse iteratively faster and more competently in a voice conversation than in a message thread, and get past the awkwardness and misunderstandings faster as a result. I've had some excellent Skype conversations with people I have never met in person, and some ghastly ones. I have proposed a more robust, multimedia, multi-view Simple Virtual Presence (SVP) tool such as what is illustrated above. There are people more technologically competent and agile than I am who are achieving such presence using a combination of tools now, but for most of us this is still just a dream. SNAs are therefore inherently not very good for building relationships or for collaborative work. How are they at finding people for valuable personal or business relationships? Once again we're back to the too many sellers, too few buyers problem (it's the same with dating services, I'm told). Useful SNAs need to be under the control of the customer, not the vendor. They would be better advised to reinvent themselves as a kind of very detailed person-to-person 'yellow pages', to separate users' 'what I have' and 'what I need' personas, and to focus specifically on the former, in a lot more detail, with credentials and samples of offerings. In a way, that's what blogs do, providing a space for one individual to exhibit as much of himself as possible in as much detail as possible, which is why many recruiters are now starting to peruse blogs in the search for extraordinary people or matches for very difficult fits. So a good SNA could offer a condensed version of this: Who I am, What I offer, Who recommends me, and Samples of what I do. Then the buyer can browse this 'catalogue' and, if he thinks I might have what he's looking for (personally or professionally) he is given contact information (ideally with the richness of Simple Virtual Presence) to confirm through conversation that my offer meets his requirements. Simple as that. Forget about the discussion forums and the form-filling and all the other bells and whistles that just complicate use and chew up time. Just give me a yellow pages on steroids. Once some standards emerge on formats for this information, it could then be possible for people to post this information anywhere, in the agreed-upon 'SNA2' format, so that we would no longer have to post my information to each SNA 'yellow page' directory -- the SNA tools could go out and harvest it automatically wherever we posted it, so we would only have to maintain it once (perhaps on our blog-jacke t, personal website, or other online space).
What would really make SVP cool would be if we could meter it, so that the tool could track time we spent on each call and, with the agreement of the other party, automatically bill them and pay us for our time at an agreed-upon rate. Because it's the value you add person-to-person, helping them in their personal context, once the introductions are over and they know they've found the person they want to 'hire', that could finally realize the promise of online commerce. |
I know I'm late to the party, but my recent experiments with LinkedIn and Friendster have got me all interested in the potential of software that bulids on top of people's own social networks. There's just one thing that's been bugging me, best explained by this quote from Om Malik:
The question I have is: why the F**K should I share my network of contacts with these commercial entities. They are like BlogSpot that does nothing for my brand equity and in many ways chews me out after making the network connections. Thus what I want is a "MoveableType" of social networking. Blogs took off because it was about one person - me. My social networks should be of my making for me. Lets figure out a way to cut out the middlemen.
Via John Battelle, here's the answer: Plink, a social search engine which uses information crawled from decentralised FOAF files. It's nicely put together and could be just the incentive I need to finally put together my own FOAF file.
Plink is also a nice example of the kind of thing the semantic web hopes to offer. People provide information in easily parsed formats, then others bulid third party applications on top of them that may never have been envisaged by the creators of the original standards. Feedster is another great example of this effect in action.
These folks totally groks it..... (their names
are Grant and Cyndie Berg.)
back and
forth over the social portal play. Zawodny on the point
missed: Stokes misses it not just once
, but twic
e.
Om nearl
y follows him off the "they just want my rolodex and why should I
give it to them" cliff, but veers at the last instant and manages to
strike a glancing blow at a worthy target by alluding to social
networking services embedded in client applications -- and spawns some
interesting comments.
Marc Canter's beating the FOAF drum
again. I'm looking forward to peopleaggregator's next
rev. Sifry's apparently working on FOAFing up Technorati, too. It isn't an
accident that Sifry's tagline is web services for
bloggers.
Anyway... back on topic...
Look, Friendster didn't get
$10m solely on the basis of its current business model. It sure as
shit didn't get it on the basis of its software / infrastructure [and
I hope they're spending some of that money on some
engineers].
They got it because, as Jon Udell and others have
pointed out (can't find link -- may be misattributing),
user-contributed data is a valid currency for the next generation of
online [web] service[s] businesses. And anyone who can succeed at
being a primary conduit for user contributed data which has bearing on
purchase decisions and product / technology adoption/popularity has a
great opportunity.
What Stokes seemed to miss, which Jeremy
alluded to initially and Marc re-iterates from another
vector:
"The place to make the money
is by adding value added, functionality, tools, services - what have -
AROUND these most basic of all instinctful notions. Not by charging
for the right to do them - in the first place!
So a
PeopleFinder or FriendRanking or Introduction manager or Private email
or IM enabler kind of platform - would be augmented with value added
tools - to become a new business model. This what I mean by 'new kinds
of tools."
... is that web services technologies
are going to enable a Friendster, an Amazon, and a Google to operate
in a unified manner delivering synergistic services to groups of
connected (define it any way you want) people with shared
interests.
This is what people are hopping up and down about,
and I think there's some solid cause [lineofsight - code + words +
pictures]
I'm feeling all warm and fuzzy. 2004 is looking to be pretty interesting.
Really, read it for yourself...David Hornik (Venture Blog): All Social Networking Panels Are the Same. So in an effort to save you a bunch of time and aggravation, here's a transcription of this evening's event. I believe that it is essentially a transcription of all past and all future social software panels, so read it and free yourself of the need to ever attend such an event yourself.
Orkut put up a special Valentines Day feature yesterday - which I used to it's fullest capacity!
It a really simple messaging system - which enables folks to attach an image, a pre-canned statement and colorize the background of this 'virtual Valentine. The nicest thing is that it appears on the top of your personal page - and is formatted perfectly! And normal messaging is turned off.
What this shows is that Orkut is actually breaking out of the mold of YASNS. Sure the spam feature is inane and may well 'cause it's demise, but at least he's willing to try something new!@ $%#^$%^%#$&%^#$#
As danah says - everything needs to be put into context and it's clear Orkut really DOES think of his system as a dating machine. Right on! Focus and context is key!@^%$&%^$
So what else makes up a NEXT generation social network?
Well make sure to check out Ludicorp's new Flickr system. I've been trolling around it this morning and I've YET to find anything wrong! Now I just need to get soem friends to exchange photos with and IM with.
Flickr is the first social net to intergrate IM and to use the social net for something BESIDES just mating or buying classified ads. Watch for a new generation of systems that treat social networking just as another crucial feature - just as Multimedia and the Internet are thought of today. I mean - who WOULDN'T build a system today without media or on-line built into it?
That's where we're going with social nets!
Google Tries Out Its Own Friendster-Style Service: The social networking space is getting awfully crowded, capped now by Google's entry.
The launch of Orkut comes after Friendster's rejection late last year of Google's offer to buy the site that has become known as an online venue for hooking up friends of friends.
It also arrives as new social networking sites are cropping up at a frenzied pace, fueled by venture capital investments in companies like Friendster and the business-oriented networking service LinkedIn.
Still doesn't beat Dogster, which prompted Anil Dash to plead, "Please God, make it stopster."
Click here to comment on this entry
The following phrases have been identified by the grok system as matching this entry: