nuance intelligence

Spent Monday afternoon at the New Media Summit, hosted by Metzger and Associates.

The audience was largely PR and communications professionals — people whose bosses, clients and clients’ clients are frequently turning towards to answer the ever-maddening questions about how to deploy new technologies, what social networking, mobile applications and new media in general is all about.

It’s a big change from the GoogleIO I attended six weeks ago, which was the uber-geek center of the universe, where the discussion was more technical, on the far side of the cutting edge.

Highlights of today’s discussion were Twitter, mobile applications and general new media trends.  Here’s a good wrap up from the Metzger blog.

What’s the nuance?

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It’s a never-ending sport.  With some drastic implications.

There’s ample evidence that the social networks are nothing more that the dot.com bubble revisited.  At the same time, big time players are putting heavy bets down that there’s a pot of gold out there somewhere.  So what are social networks really worth?

MIT’s Technology Review, in my opinion, the ‘Economist’ of tech media, i.e, the ones who have the best writers, do the best research and present it most professionally, has a series of articles this month as part of their Web 2.0 bubble cover feature.  The more relevant article investigates the valuations and advertising assumption, reviewing major financial disappointments at MySpace and Facebook, highlighting ad CPMs in the pennies, and raising the question of whether advertising has any chance of producing meaningful revenue for social networks.  (as I’ve written before, the answer is NO.)

TechCrunch, one of the influential blogs in the web 2.0 / mashup / social media space did a decent job of analyzing social network valuations based on a detailed assessment of advertising revenue, and the value of recent investments (LinkedIn, Facebook) and purchases of large social networks (Bebo, by AOL).

Silicon Alley Insider analyzes the Tech Crunch analysis, adding their own enhancements to the model. Separately, they’ve also got running values of the top 25 private companies — including many social networks — in their SAI 25.

What’s the nuance?

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Everyone likes lists, right? RIGHT?!?

Here’s one I picked up at Google I/O, which ultimately traces back to Jaiku co-founder Jyri Englestrom:

1. What is the object? Social networks need to be about something beyond the connection of people. At Flickr, the object is a photo, at LinkedIn, it’s a job (writ large to include consulting, full-time job, sales lead, strategic connection, etc.).
2. What are the verbs? This is the occam’s razor version of what is going to happen on the site.  At eBay, the verbs are ‘buy’ and ‘sell’.
3. How can you share? Be clear on how people will share the object; early examples are permalinks for blogs and widgets in social network profile pages.
4. What is the gift in the invitation? You’ve got to put some benefit in front of a request for participation. If you anticipate organic (don’t call it viral) growth, what are your users able to offer their friends and colleagues?
5. Are you charging the providers or the spectators? This is the heart of the business model. The zeitgest du jour is the “freemium” model, wherein basic services are provided for free, and you charge people to custom-publish their info. Jyri believes you charge the publisher, not the spectator.

Where’s the nuance?

With the explosion of vertical social networks, monetization and design are elusive to people who have a simple notion of providing social networking tools to their community. This provides a challenging framework which helps to guide intrepid social networking entrepreneurs to a higher likliehood of success.

Please take a second to review our revised clients page.  We’ve reorganized it, added some exciting new projects, and updated the descriptions of some of our partnerships, which have evolved in recent months.

Let us know how we can help you connect to these interesting opportunities.

I’m just back from Google’s I/O developer conference. Look for deeper thoughts in coming days and weeks, as the REM cycles process all the new info. In the meanwhile, here are some top-of-mind impressions:

1. I’m always on the lookout for corporations (like Google) to fall from grace. As near as I can tell, it’s just not happening. All the people I met have been focused, authentic and intent on their goal of opening up the web as a collaborative environment. At this event, that translates to enabling developers to build more interesting and integrated apps. The Googlers are all smart, authentic and interesting. There is a pretty high weirdo factor (which is to say Googlers are not dronish), and the T-shirt-to-khaki ratio was about 25-to-1.

2. Google leadership is doing a good job of pairing mature leaders with young engineers in technical presentations. This demonstrates a lot of trust in their teams, and provides these (relative) youngsters with great experience in working with their peers in the developer community.

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People who are leading a business, non-profit or other organization instinctively know that “online social networking” will, can, and should have a big impact. But during the busy business day, week, or month, it’s hard to find the time to translate this notion into practical strategy and performance metrics.

Although the development of functional tools have trailed transformative vision during the early stages of this important evolution, an important change has happened in social networking technology in the past six months. At the end of 2007, Google announced a standard for the exchange of information between and among social networks. OpenSocial was announced late in 2007, in partnership with the other major social networks, save Facebook, who released their own competing standard several months prior.

Last week, Google annoucned their own framework and mini-applications for integrating OpenSocial tools on almost any website, called FriendConnect.  These simple widgets are installed on any site to “socialize” it (and release your inner Stalin).

What’s the nuance?

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I’ve been pounding on the difference between viral and organic this whole spring, both on this blog, and in pretty much every meeting that talks about web-based marketing.

Although I know it’s not particularly endearing, I love it when my predictions come true. Back in March, I wrote:

An organic campaign nourishes the hosts (or network nodes), and gains the social ‘word-of-mouth’ hyper-growth as the result of its direct benefit to the host. In fact, organic is not just about a marketing campaign, but should be integral in the design of the product in the first place, reducing the need for flashy or creative marketing.

Take Facebook and LinkedIN as examples. Whether I’m reading the digerati or talking to close colleagues, professionals have become weary of widget spam on Facebook, because the widgets are noise, not signal. But new features from LinkedIN actually provide benefit to professionals, and are therefore quickly adopted. In this comparison, Facebook is viral, LinkedIN is organic.

And now, it turns out, advertisers agree with me. In a post on AlwaysOn, John Shinal wrote,

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What recession? The Colorado small business economy is vibrant and growing, with a more dynamic mix of industries and sectors than we have seen in decades.  From biotech to energy, web 2.0 to nano, and an overriding mindset towards sustainability, there is a counter-cyclical boom in small business growth happening here on the Front Range.

If you want to learn more, you should really come check it out.  Here are some of the many ways to connect into this thriving community:

• New Tech Meetup.  Hundreds of geeks, entrepreneurs and cool new companies every month.
• Clean Tech Meetup. Cool ideas and innovative solutions for energy, transportation and more.
• Founders Meetup. Entrepreneurs coming together to help create great businesses.
• Colorado Capital Conference.  Hosted by the Rockies Venture Club next week, you can meet some of the best up-and-comers across a variety of sectors.
• TechStars. Cool summer program for aspiring web jockeys aspiring to become business people.
• Business Catapult. Online matching service for entrepreneurs and investors. Note: I’m one of four owners here, which makes it even cooler
• Angel Capital Summit. Annual fall investing fair, although their site has not been updated since last fall.  Look for more information in coming weeks.
• And there’s more.  Much more.  Comment here if you’ve got questions, thoughts or other interest in connecting into Colorado’s great entrepreneurial scene.

Note to entrepreneurs, especially those whose plans I’m currently reviewing for the upcoming Colorado Capital Conference: if you still think that you can support any type of social media on ads, think again.

You can’t scan the RSS feed of a latte-fueled digerati without tripping over tales of low low low advertising CPMs for social networks. If you don’t believe this, see what the industry heavyweights at AlwaysOn’s recent Venture Summit East have to say; it’s not pretty.

What’s the nuance? From the perspective of a business whose primary revenue is not from developing online social media, a few things should be clear: Continue reading

Ning, the largest provider of customizable social network software, just raised $60 million, on a pre-money valuation of $500 million, so says Venture Beat. This on top of $44 million on a $170 million valuation back in July, 2007. In a generally depressed venture environment, according to the Industry Standard, this is a pretty important indicator.

This editorial in AlwaysOn runs counter to the skepticism around social networking bubble hype, and points to the very legitimate upside of Ning and social networking in general.

What’s the nuance? Ning’s success rides on the trend of people moving away from massive centralized networks like MySpace and Facebook, and toward smaller, focused, vertical networks that connect people with more affinity and coherence. More and more people are approaching us with queries on how to integrate social networks into a meaningful business model, which is the next major hurdle once you grok the idea of vertical social networks.

But the scariest nuance is the quote from Marc Andressen in his note to VentureBeat:

We raised the money to enable us to keep scaling given our accelerating growth (over 230,000 networks on Ning now, growing at over 1,000 per day) and to make sure we have plenty of firepower to survive the oncoming nuclear winter. At current growth rates, we don’t need it to get to cash flow positive, but having lived through the last crunch, it’s good to be conservative with these things.