I remember reading a story from Paolo Coelho’s “The Alchemist” that essentially gave the message – don’t rip people off, because that is somewhat like stealing. I don’t have the book at hand because I gave all of my copies away, but I remember the moral to the story. Essentially, it was a story about doing fair deals, and making sure you are creating enough value from trade for both parties to profit.
For some companies, I think it eludes them that their core objective – create value; and that driver of growth is creating value for their customer. More benefit, lower cost.
There is one sure fire way of making sure that the equilibrium of the cost to the benefit is found, balancing the price and the value to a prospective customer – that is by using auctions. I’ve always believed that this was a way to find economic justice, but until now it hasn’t necessarily always been practical.
However, Google is showing us the way, as is evident in this article from Stephen Levy @ Wired.
As we move to a more efficient future (since that is where the quick wins are) - expect this trend to continue
In the lead up to the next Online Social Networking and Business Collaboration World I thought I would post the notes that Paul and I worked on for his 2007 speech. I left all of the notes entirely in tact, so it is interesting to reflect on how perceptions can change over time. Enjoy and Discuss.—-
Survival of the fittest is a simple reality in the game of life. Successful play necessarily requires a degree of selfishness, but across the animal kingdom species have evolved social behaviours. Why? Do they enhance survival? – National Geographic 2003
I think it is fairly self evident that social behaviours like collaboration, and altruism have obvious evolutionary benefits compared with acting as individuals. However, this has been a trait that has evolved over time in animals and communities, and has become a recent phenomenon that has been enabled in a very efficient manner through the web which until now, tended to favour a more solitary existence in cyberspace.
The drive to adopt social behaviours and reap the benefits is evident in the growth of social networks as it is now the primary form of communication over web mail.
This confirms that social networks are starting to eat into the web-based email providers’ dominance of the internet messaging market.
The amount of UK Internet traffic online retailers receive from social networks increased by 153% between December 2006 and September 2007. This September, 3.1% of UK Internet visits to the Hitwise Shopping and Classifieds category came from a Hitwise custom category consisting of the top 25 social networks in the UK.
There is no reason to expect that Australia will be any different.
As we all know, retail has been changed by social media which was conventionally known as conversational media, or Word Of Mouth – in fact, every industry has been impacted by social media, in some form. The revolution is powering ahead like a tsunami and its course isn’t going to change because industry giants like the RIAA, Walmart or any other retailers are in its way.
So, if the freight train of culture isn’t changing course, then we must learn to adapt, learn to ride the wave, and to put it bluntly – learn to surf the Web 2.0, and have us socially evolve as evolutionary psychologists would put it.
In this talk I hope to focus on how “Social” affects industry and culture, how retailers can look to adapt – and to help dispell unfounded fears held by many institutions facing the tide of transparency, and efficient information flow.
I guess the fundamental difference to the way companies have been able to engage traditional media is that culture is now not read only, it is read write.
Prior to the web, traditionally it was easy to make waves, it was a small ocean, the waters were calm, and you didn’t have to ride the waves if you made them. However, with the advent of (User generated content) UGC, everybody is making waves, and the butterfly effect can have dramatic, and unpredictable effects.
But in trying to understand conversational media or social media, one thing should remain firmly in the back of your mind –
“The only thing worse than being talked about, is not being talked about”. – Oscar Wilde
So how is social affecting different industries?
Here are a few examples
Social Finance -CoVestor – People sharing their investment strategies and gaining notoriety to begin earning money on their advice.
Prosper takes on the form of communal loans, P2P financing and investment. Currently managing $92 million from 440,000 members. LendingClub is establishing a similar network inside Facebook.
Social Charity – Donorschoose.org is a social donation network that manages various pleas for donation in a Digg style to give prominence to worthy causes.
Social Music – iLike is a network for recommendation of musical tastes
Social Radio? – Pandora was the closest thing to social radio, but now we have Deezer, FineTune, Songza, LastFM, Musicovery
Social surfing – StumbleUpon uses influence as its currency, the more active and successful a participant you are, the more influence you are rewarded with.
Social TV – StumbleUpon Video does social TV recommendation, and Torrent websites aggregate torrent popularity. You also have Current.com which provides a social platform for TV creation, commenting, recommendation and sharing.
Social advertising? – Facebook beacon is levering it users and their peers as part of a massive networked affiliate marketing scheme – strangely not passing any of the rewards delivered for a “lead” to the user.
Social politics? - We have politicalbase.com which improves, and coordinates the quality of information and discussion about political candidates and policies.
Could this extend further than utilisation of social media for spreading messages, to also be used for nominating candidates – could social politics eradicate the “politicians” from Government so we have true representatives?
Social retail? – ThisNext brought about a global recommendation engine that was not limited to any specific network or shop. Yahoo has their Shopposphere, and ebay has their social recommendation engine.
Could this go further to work on top of the social graph for more targeted recommendations. Could it be extended further to affiliate programs within the network where successful recommendations earn a “retail currency” that can be spent with affiliate partners. Or even real money?
There is also Group shopping - Using the power of crowds to bargain down retailers and make bulk acquisitions
Social accommodation? – Could travel become a lot more comfortable and a lot cheaper by using global social networks and a “travel credit currency” like that used in file sharing networks that use bandwidth as a currency - like Tribler
Social Energy? Grid 2.0 – microgeneration communities selling energy back to the grid.
Social Religion? – Yoism, the open source collaborative religion
Social Medicine?
Social Venture Capital?
Social Matchmaking?
It is worth noticing that when “social” creates an industry paradigm shift, it doesn’t mean just one thing. While for some industries, applying a social framework seems fairly obvious, the reality is there are probably a lot of different ways of implementing the optimising power of a social network to attain efficiency gains in managing information.
Making waves and riding them
Now, the optimisation the comes from a social network is because they are far more efficient in delivering messages. We migrated from snail mail to email for exactly the same reason. However, this isn’t the only place that conversations are taking place – the New York times recently reported a further decline in newspaper readership as people transfer to blogs.
So what are the tools at your disposal to surf this social wave?
Well, we have
micro-media like Twitter, and Instant Messenger,
Social video, YouTube, MetaCafe
Forums - Social Networks – OpenSocial and Facebook, Blogs, Digg, Wikis, email, chat
Then, there are a few other, not explicitly social tools, but worthwhile having in your bag of tricks;
Widgets, browser extensions, mobile apps (which Vista widgets can extend to on .Net), RSS,
As the web progresses, the underlying architecture becomes more complex, but the user experience becomes simpler, and information is far more fluid in how it can transfer. As a result we end up in an eco-system where one voice can be as powerful as the idea in the message it speaks.
So how can you control the message? You can’t unless you control the channels
What about controlling the conversation? The best you can do is take part – because like a black market, the conversations you prohibit will spring up somewhere else.
Have you ever thought – it’s all Chinese to me?
It is one thing to have your own chopsticks in China, but understanding how and when to use them is far more beneficial to you if you wanted to take part in their culture.
Similarly, probably more important than all of the tools, is our understanding of how to use them, and how they fit into the web – from a strategic level, being an ethical actor, and participant in online communities. Understand the “virtual culture” when using digital communication tools is of the utmost importance.
Just think, how many people have you talked to that controlled conversation? How many of you continued having conversations with them?
In this is the essence of social media and virtual culture - it boils down to relationships, and stories as social currency. This in part is why PR has become a major focus in many organisations than traditional advertising.
What are the components of a relationship? Conversation, reputation, respect, trust, influence and attention ( do any of these concepts sound familiar?)
Relationship counselling
Now, some of you may have seen the documentary “The Corporation” where the documentarians use the thesis that if a corporation holds the legal status of a person, what is its psychological profile?
Psychologist Dr. Robert Hare runs down a checklist of psychopathic traits
The corporation is irresponsible because in an attempt to satisfy the corporate goal, everybody else is put at risk.
Corporations try to manipulate everything, including public opinion.
Corporations are grandiose, always insisting that “we’re number one, we’re the best.”
Corporations refuse to accept responsibility for their own actions and are unable to feel remorse.
So if that is what the psychiatrist diagnoses, what about the relationship counsellor?
Retailers talk at your consumers, not with them
Retailers are reserved beyond the surface level
Retailers only engage your customers when you want something
………..
So why are these relationships important? Can’t I just have a web page that people come to for all of their information?
Well, that is a positive step, but how much value is the web page adding? It is a highly competitive attention economy that you are working in, and if that is where your conversation is taking place, if that is where you build your relationships, you are restricting yourself by thinking like a physical world actor.
Virtualisation technologies mean that you can extend that conversation beyond the web page – through RSS, Twitter, Social Media Applications, participation in social networks, Viral videos etc.
Not only can you do this, but it is imperative.
Furthermore, it isn’t your conversation that is the most important, it is the consumer’s conversation. You have to talk about what they want to talk about – everybody likes a good listener.
As a result, this conversation isn’t taking place on your WebPage, it is happening everywhere else.
So, let’s consider why isn’t it happening on your webpage, it seems like a logical place?
Well, the reality is, it could, but that would take an unprecedented level of Openness. Openness isn’t just in terms of free speech, but also in access to databases, engagement with internal employees, and allowing customers a perception of control, and participation in the company direction, brand identity, and possibly CSR.
OPEN brands recognise that the paradigm has changed and releasing brand control to its users builds community, loyalty and fosters a real relationship. However, people only want to have relationships ideally with virtuous people – so you need to become a virtuous company.
All great virtues become great men (or companies as it may be)
A good example of this is the OpenSocial. It couldn’t compete with Facebook on anything compelling enough to swing user adoption except for virtue, and although the history books have not been written yet, this strategy has made a big splash. It is evident that you can now pick away at your competitors on their failings in basic relationship management. Despite how good Facebook is, it is good looking, user friendly, fast, open for a developer community and delivers on its promise -so it is reliable and trustworthy. I would say, quite a nice kid on the block to hangout with.
However, he doesn’t share very much with the other kids and he seems a little greedy and maybe a tad exploitative. So, this virtue of generosity is the one that Google is using to pick apart Facebook. This openness and transparency follows in a host of other moves by companies to become more virtuous in order to compete.
Aristotle said “virtue is its own reward” and the only way to achieve true happiness
Each of the virtues is a state of being that naturally seeks its meanrelative to us. According to Aristotle, the virtuous habit of action is always an intermediate state between the opposed vices of excess and deficiency: too much and too little are always wrong; the right kind of action always lies in the mean. (Nic. Ethics II 6) Thus, for example:
with respect to acting in the face of danger, courage is a mean between
the excess of rashness and the deficiency of cowardice;
with respect to the enjoyment of pleasures, temperance is a mean between
the excess of intemperance and the deficiency of insensibility;
with respect to spending money, generosity is a mean between
the excess of wastefulness and the deficiency of stinginess;
with respect to relations with strangers, being friendly is a mean between
the excess of being ingratiating and the deficiency of being surly; and
with respect to self-esteem, magnanimity (nobility) is a mean between
the excess of vanity and the deficiency of (emptiness) pusillanimity.
Where do we see evidence of these virtues appearing?
Honesty is appearing through the transparent nature of the web, Courage in the disturbance of the status quo through disintermediation (and challenging archaic business models).
Below is a list of virtues, and companies with the possible virtues they represnt.
Acceptance:To consider circumstances, especially those that can not be changed, as satisfactory.
Caution:Avoidance of rashness, attention to safety.
Courage: A quality of spirit that enables you to face danger of pain without showing fear.
Love:A deep, tender, ineffable feeling of affection and solicitude toward a person, such as that arising from kinship, recognition of attractive qualities, or a sense of underlying oneness.
Loyalty:Faithful to a person, ideal, custom, cause, or duty.
Moderation:The avoidance of extremes in one’s actions or opinions.
Openness:Ready and willing to talk candidly. Unsecretive.
Patience:The ability to endure delay, trouble, pain or hardship.
We have to understand that all of our behaviours and ideas, shared on the web meld together to create a “virtual culture”. To take part in these conversations we have to speak the digital language, and take notice of cultural norms. We have to make a habit of being virtuous, within and without because social networks extend within companies and between companies as well as externally to them.
To be competitive in this environment and communicate efficiently, we have to understand the “attention economy” and choose the right tools for specific jobs when delivering messages.
We have to listen to our customers, and develop a clear understanding of what inspires users to contribute to such sites and participate in discussion, and recommend. The easiest thing to do is to make consumer feedback an essential part of every brand Web site.
Finally, we must not be afraid to make mistakes and show we are human – at the end of the day, that is what people want to relate to. In understanding this, and appreciating the rate at which the web moves, you will see that the risk of doing nothing is far greater than the risk of trying and failing.
If your customers aren’t online and social now, they will be soon.
It was great to come down south and meet you all on my brief whirlwind tour.
I thought I’d take a little time to add some depth to some of the information that I mentioned when I was there.
First - RSS (Really Simple Syndication) it is a great way to stay abreast of changes in the rapidly evolving world of the Internet - you can subscribe to mine by clicking here. There are many different RSS readers, however, I don’t think any are as feature rich as Google Reader.
Second - Doing online competitive analysis is just as important as looking at your own data. Google recently released Google Trends for websites. It isn’t quite Hitwise, but it is a fantastic free alternative with exceptionally robust data. I’ll be comparing the different competitive analysis tools in the near future, so stay tuned. The normal Google trends for search terms is also very good for understanding how your offline campaigns are impacting your brand.
Finally, to back up my mantra on usability and interaction - this video is a great presentation on why the KISS principle (Keep It Simple Stupid) is still a winning formula for usability in the Wide World of the Web.
Hello Melbourne!
