nuance intelligence

Why are so many big-company people, in every function, behind the curve in adopting social media and putting it to work in a business context?

Think about who the early adopters were: small businesses. New businesses. Entrepreneurs, consultants, agencies, non-profits, self-published authors, gamers. All these folks were out there experimenting with Twitter, building Facebook pages, blogging away, tinkering with all the new tools that popped up.

Meanwhile, corporate policymakers (yes, that’s YOU, IT and HR and corporate communications and C-suite!) were busy blocking access to social media or setting up their systems to tell internal users accessing those sites that their activity would be monitored.

Big Brother is watching you.

So of course the wise and ambitious stayed away from all that stuff at work. When they went off the clock, they mostly got interested in social media as a toy.

Cut your team some slack, and give them some extra time in their day to experiment, and to investigate the potentially useless as well as the obviously useful. Then remember the social media gap the next time you  think about setting up an annoying, small-minded policy.

Note: We’re back from holiday, digging out of email and catching up with news. 

Really good data on growth in social network traffic in the first half of 2008.  Inside Facebook carries results of recent comscore rankings. In short, Facebook and Hi5 are the fastest growing networks, while MySpace is less hot in terms of growth, although still a goliath.

What’s the nuance? 

During the first half of 2008, the market became increasingly concentrated amongst the 6 market leaders. Although uniques to the leading 6 social networking sites increased by 88 million, uniques to the other 276 social networking sites in the category actually fell by 24 million from December to June. Despite all the new social networks being launched, it’s proving to be really hard to gain traction at this point.

As a base to the acid of web 2.0 tools, their blogs, tweets (twits?), Duncan Work’s blog — 100 Trillion Connections — is an interesting balance.

Recently, Duncan posted some of his thoughts on the connection between the important work being done in mapping the human brain, and it’s implications for the social brain.

His conclusion?

… mapping bigger-scale social structures and processes will be much more challenging and will require both better data (including dynamic data) and better techniques. Large scale real-time participation by individuals and groups in online social networks like LinkedIn, Facebook, MySpace, etc., can someday help us do a better analysis of large-scale social intelligence — if the data can be truly open for analysis, while also insuring users’ privacy.

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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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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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.

Here are some interesting stories I saw this week, and why…

• Industry Standard: 10 ‘Net Services that Will Succeed and 10 That Probably Won’t.  A new set of choices for the new new new new new thing, most of which I hadn’t heard about yet, and some harsh knocks on buzz darlings Second Life, Zillow, Twitter and Joost.
• Compete Blog: Analysis of Traffic Patters Among Users of Facebook, MySpace and Twitter.  Good insight into how these brands differ, based on data about the most popular sites visited by account holders in these three meganets.
• NYT: Feature on Boulder in the Travel Section.  For a piece in the Old Gray Lady, it’s not too bad.  What did they miss?  The 300-person-per-month TechMeetup at the core of the biggest tech entrepreneur scene between New York and San Francisco, five new CleanTech venture funds being started, how close excellent backcountry skiing really is and the wide variety of global leaders who make their living somewhere else, but make Boulder their home.
• Worldchanging: Emerging Green Jobs Market.  Joel Makower has a good piece on the gap between the hype and reality around the growth in ‘green jobs’.  Made me think about the solar panel installer I met at “Green Drinks” last week who said, “for the first time in my life, I’ve got job security, and I’m not worried at all about a recession.”

Enjoy your weekend.

Good friend Rebecca Saltman turned me on to this piece in the Journal of Philanthropy (ironically, a paid subscription site). It looks at how Steve Case leveraged both Parade Magazine and Facebook to build a socially-focused initiative that funds smaller non-profits.

The competitions, financed by the foundation created by Steve Case, founder of AOL, and his wife, Jean, promised $50,000 grand prizes to nonprofit groups with the greatest number of donors to their cause, not the largest amount raised. In all, the Case Foundation handed out $750,000 in awards. Continue reading

It has taken me the better part of a decade, but I finally think the Economist might understand a thing or two about the business of digital media. Throughout the 90′s and into this century, it seemed they were late to the table, with obvious observations that hit the newsstands six months after they hit the digital zeitgeist.  Living outside the echo chamber, they provide good triangulation and outsiders’ detachment, as demonstrated by this week’s piece on the business of social networks.

As fits their milieu, they cover the battle of the titans with some accuracy, but miss the nuance of how social networks create value in a more distributed way.

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Doesn’t matter if we’re talking about search, marketing, or web 2.0… organic is the new viral. A viral campaign uses its hosts to its own ends usually increasing attention to a particular web site.

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.

Here’s the summary one-liner from Google Search Guru and former Technorati CTO Kevin Marks’ blog Epeus’ epigone:

I spent the last weekend fighting off a flu virus, partly by eating lots of organic fruit. I expect social networks and their users will continue to do the same.

A good friend, John Siewierski, said this to me another way a few weeks ago, “think about what you are doing for your network, not what your network is doing for you.” Pretty organic, John.

“Ask not, what your country can do for you…”