Category: Business

Rethink “marketing”

Dave Peck’s written a blog post where he says his clients are questioning whether they want to use Twitter as part of a social media mix. The arguments he quotes suggest that his clients have an experience similar to the experience we have when we go to a “networking event,” and find that everybody in the room is hoping to sell, and nobody’s looking to buy. Dave asks “can somebody really get clients from Twitter? Is Twitter Overrated and Overhyped?”

A few responses to his post, including mine, make a point I would think is obvious: if you think of Twitter as a platform where you “get clients,” you’ve already stumbled, fallen, can’t get up. I use an old media example that we all still use, the telephone. All companies have telephones, but not all companies do telemarketing. Many people place themselves on a “do not call list” because they specifically do NOT want to be interrupted by sales calls from strangers, and in general telemarketers are regarded as a lower life form. You don’t want that for your company, right? But the telephone is still a valuable tool for authentic voice communication, and it can be business critical even if it’s not about “getting clients.”

If you set up a Twitter or other “social media” account for your company to “get clients,” you’re not understanding the new world of bottom-up personal media. That’s okay, nobody expects you to shift paradigms overnight, it takes a while to sink in – broadcast media is losing mindshare to personal media, what we’ve been calling social media, where everybody can be both producer and consumer, in contexts where they can control we all have increasingly more control over which messages we receive. It’s Darwinian: people are selecting environments where they can exclude or skip interruptions from strangers coming in from outside their preferred focus of attention – i.e. the broadcast television/radio approach doesn’t work, because the captive audience has been liberated by technology.

So much of our thoughts and attitudes about marketing and selling were developed within the context of mass marketing, because that’s where we lived, but it was really a blip in the evolution of media. “Markets are conversations.” In the past, we had real conversations with the people who sold us products and services – this was before the “mass” phase created a sense of abstraction both ways – customers were numbers, and the actual sellers were ghosts somewhere beyond the actual touchpoints, unseen, only imagined. In the future, we’ll have real conversations again, this time mediated by technology. How this scales is still a big question, part of the bigger question of how we reorganize around the robust, data-intensive, increasingly mobile communication technologies we’re evolving in the 21st century.

But you have to rethink the whole client acquisition thing. It’s more like “how can I build and sustain relationships that are relevant to my business (or nonprofit, or cause, etc.)”

Linchpins and hierarchies

Seth Godin has a new book, Linchpin, and it looks like another good one. I haven’t read it, but I’m noting this quote, found in Amazon’s product description:

The only way to get what you’re worth is to stand out, to exert emotional labor, to be seen as indispensable, and to produce interactions that organizations and people care deeply about.

The review goes on to summarize:

There used to be two teams in every workplace: management and labor. Now there’s a third team, the linchpins. These people invent, lead (regardless of title), connect others, make things happen, and create order out of chaos. They figure out what to do when there’s no rule book. They delight and challenge their customers and peers. They love their work, pour their best selves into it, and turn each day into a kind of art.

Linchpins are the essential building blocks of great organizations. Like the small piece of hardware that keeps a wheel from falling off its axle, they may not be famous but they’re indispensable. And in today’s world, they get the best jobs and the most freedom.

Meanwhile I found a post by Godin at Huffpo where he seems to be just now figuring out that we’re seeing a structural transformation from command and control to network infrastructures for organization. Surely he saw this long ago? A quote:

But if your business deals in ideas, control will stifle them. If your organization deals with the public, control will inevitably alienate your best customers. When United Airlines tries to control the way customers deal with their policies, they end up with United Breaks Guitars, not profits or market share.

Worse still, a rapidly changing competitive environment means that control is a losing strategy. Record companies tried to control technology and they lost. AT&T thought they could control how people used a telephone and they lost as well.

Is there any doubt that the world is going to go faster, not slower? Any doubt that non-state actors are going to have more influence on world affairs than ever before? Any doubt that technology will continue pushing us along a slippery slope where control is not a winning strategy?

Social software, social media… what’s happening

Three years ago I started thinking about how I might do consulting around my knowledge of online communities and collaboration, social networks, and general web strategy. I started meeting with David Swedlow, then Bill Anderson and Honoria Starbuck joined us. We were thinking how organizations could work through their social networks to build collaborative efforts. This could include viral marketing and collaboration with customers and clients. Bill and I had an engagement with an academic client that seemed to work as a proof of concept. I went on to form a partnership with David Armistead at Social Web Strategies, and as we worked through the construction of an ontology for our potential work, a couple of things happened. First, marketing communications professionals started seeing one point that we had been discussing – that mass aggregation of mindshare was becoming a thing of the past, that attention was fragmented and distributed among many niches and applications. Second, Twitter caught on with marketing professionals and they started thinking how they might use it, Facebook, and other social networking platforms to create presence for their clients. We started to see the label “social media,” and a few people who sort of knew marketing and sort of knew social software started building buzz for a new discipline, hoping they could sell consulting hours based on their (more or less limited) knowledge. However, well-established large consultancies started adding social media expertise, and selling social media consulting as just another of many services. Also, just incidentally, the economy crashed and money stopped flowing. (We started thinking about low barrier to entry/low cost of production as a social software plus, and we also started thinking hard about the impact of low transactional costs – thinking how we could consult on the uses of social software for coordination and collaboration inside companies – what others later started calling social business).

So now I’m seeing that the enterprise will buy social media marketing expertise from the same large consultancies that they’ve always used, and the same will probably be true of social business expertise, as thinking about the impact of social media on internal operations evolves. Medium-sized companies seem to be hiring rather than outsourcing expertise, if they’re willing to spend money at all. Small companies are doing what they can on their own. As a consequence of all this, there’s not much of a market for small social media consultancies and freelancers – I keep hearing of “social media consultants” who’ve gone to work for larger companies doing community management or working with marketing groupss to help address social media channels.

At Social Web Strategies, we saw that our best option was to do corporate training. We’d been doing these workshops anyway, so it makes sense to build a business around them.  I changed my relationship to the company, giving up my partnership but staying on as a principal, partly because I didn’t want to be as focused on training, and partly because I wanted more time to think and write – hard to do when you’re charged with building and running a business.

I also think that we’ve lost “social” in social media like Twitter and Facebook, that are set up for drive-by posting but don’t facilitate real collaboration very well. I’ve been working (with Kevin Leahy of Knowledge Advocate) to become a Google Wave expert, because I think Wave really does support collaboration. I want to help people build true collaboration and true community, where connections become sustained relationships and lead to authentic experiences. I’m also interested in support for collaborative innovation, and how R&D works in an network environment (I’ll post more about this later).

Currently I’m freelancing, and planning to write more here and elsewhere. I’m also still working for Social Web Strategies, and will be co-presenting a training on social media for entrepreneurs in February, based on Dave Evans’ book Social Media Marketing an Hour a Day.

Social networks, social markets

Interesting data (for November 2009) from marketingcharts.com:

In “social media” consulting, there’s a tendency to want to standardize on Facebook, Twitter, LinkedIn (not on this list), and possibly YouTube if you have an ability and/or desire to incorporate video as part of your presence. Why Twitter? Given its relatively low adoption, especially compared to Facebook, I find myself wondering why it’s such a big deal to the social media marketing crowd. I get why it’s included – though it doesn’t have huge adoption, it has a lot of influencers. It can also work as a feed source for Facebook. I include it myself, when I do social media consulting.

I think it’s a big deal to some people because it was their introduction to online social interaction, and made it interesting for them when it hadn’t been before, and was both web and mobile – a very “smart mobs” scene, early on used for coordination as much as interaction. There are quite a few people who came to online social networking through Twitter, and didn’t have any experience of older online communities, like the WELL or Usenet Newsgroups, or the first appearance of journals and blogs and wikis in the nineties, or the evolution of social network platforms from Six Degrees to Ryze to Friendster to Orkut to Myspace and Facebook. They think “real” online social interaction started much later, and they think some of those older systems are dead media (even though systems like the WELL and Usenet are still rocking on).

Twitter seems to be losing ground, and I think it’s because Facebook has done a good job of incorporating Twitter’s best features (short messaging, activity streaming) and making a more robust technology (embedded rich media, no cap on message length, etc.) I’m still using both, but my Twitter messages are all incorporated in my Facebook stream, and that’s where the conversations are happening.

Facebook is probably a better marketing platform via pages and groups. You can only go so far with marketing on Twitter before it feels like spam, and I’m not sure any of these platforms is ideal for making sales happen, despite the successes of Zappos and Dell. Those may be exceptions to a rule that says “I don’t want to hear marketing messages at all.” Dave Evans has a good point, which he’s made subtly by saying that marketing and operations need to have better, closer relationships. The advertising/messaging part of marketing is not terribly effective anywhere anymore – people resist it. You have to figure out how to do great things and make them visible without the overt sales pitch. This requires a whole different kind of creative thinking… I don’t think it’s completely clear how to message a product in the new and evolving world of digital media. (I’d love to hear thoughts about what works – leave a comment!)

John Mackey

The New Yorker has a good article about John Mackey, CEO of Whole Foods Market. I worked for WFM around the turn of the century, hired as “Internet Guy” (one of my titles, along with Online Community Director and, at the end, Director of Technology for WholePeople.com). It was an important transition for me – I went from being a self-educated web maven to a manager of various web development projects and interactive elements, wearing many hats along the way. John was already in my network, but we became better acquainted in the three or so years I was working on WholeFoods.com and WholePeople.com. It was an intense late-dotcom-era experience, and I was devastated when all the work we’d done evaporated following the dotcom bust. Associates told me I should write a book about my experiences, but I wasn’t sure what part of the story I would tell. It was mostly hard work and inevitable internal politics; none of it seemed as interesting to me at the time as the vision that hadn’t quite succeeded.

Based on what I know of John through personal experience and shared acquaintances, the article in the New Yorker is about as accurate as an article can be. Obviously you can’t capture the full complexity of any human being in a few thousand words, and that’s especially true of someone as complex as John. One thing I’ve always admired most about John is his honesty, and I think that comes through in the article. As I’ve noted in a conversation with an author masquerading as “Kat Herding” on Facebook, a person can be both honest and deluded; I wouldn’t agree with John on a lot of points – like his recently, controversially articulated position against healthcare reform – but in any conversation I’ve ever had with him, he was completely straight, sometimes brutally honest. Whether he’s “right,” or deluded, or coming more from ego than from a position of true self-awareness is another question. But that question pertains to all of us, no?

John is at his best in this exchange, from the article:

…is he at heart an entrepreneur, who discovered, in natural foods, a worthy vehicle for self-actualization and self-enrichment, or a missionary, who discovered in the grocery business a worldly vehicle for change?

“So that’s a very interesting question,” he said, leaning forward. “How are they opposed to one another? People think that they are, but why do you think they’re opposed?”

I said that I didn’t think they had to be.

“I don’t, either. In fact, I think they’re very connected together. This is a paradigm that has polarized our country and led to bad thinking. It’s holding the nation’s progress back. It’s as if there were a wall. And on one side of the wall is this belief that not-for-profits and government exist for public service, and that they’re fundamentally altruistic, that they have a deeper purpose, and they’re doing good in the world, and they have pure motives. On the other side of the wall are corporations. And they’re just selfish and greedy. They have no purpose other than to make money. They’re a bunch of psychopaths. And I’d like to tear that wall down. Human beings are obviously self-interested. We do look after ourselves, but we’re capable of love, empathy, and compassion, and I don’t see that business is any different.”

Heads

In a conversation with a longtime friend, I just sent an email message that was fairly clear on some points I’ve been thinking about, so I’m reposting part of it here, ending with an unusual reference.

I’m currently into Buddhist practice and a related qigongish practice, and while many people who aren’t into those things mistakenly believe they’re “religious” or “spiritual,” they’re really just practices about understanding mind and self. In Buddhism we talk about emptiness, the realization that there’s no permanent real self. I heard a Buddhist say the other day something about not believing your thoughts. I think that’s really key to getting straight. We identify with thoughts in our heads as though they were real objects with weight and permanence, and it just ain’t so. The voices in your head aren’t necessarily your friends, and often it’s better to ignore them. I thought about all this when I read your paragraph above about identity and opportunity. I think it’s important to get behind your identity and realize there’s nobody behind the curtain. It’s a hard realization and it takes work. It leads to a real opening, potentially, though.

Truth, power, justice, framing, global warming etc. are just concepts and aren’t real things, and it can be helpful on some level to realize this. You do have to come back to a level where they’re treated as real – but there’s creativity in understanding that they’re not real things that are beyond your reach, but concepts that you’re co-creating with everyone else – that can be asserted, diverted, hacked, etc. They’re only real in a kind of mental consensus that we have about them.

***
Our politicians are more focused on politics and power – concepts, not realities – and they’re not so much into focusing on what’s real. What are the markets of the future and what skills do we require to be competitive and have viable economies? My business partner and I have been saying that we’re moving away from economies where you make money by extracting resources, applying labor to produce products, and tossing whatever’s not used as waste – to economies where knowledge substitutes for labor and heavy equipment, and where we engineer to extract as much as possible from any resource. Knowledge and social capital become as valuable as, or more valuable than, finance capital. We’ve wanted to study this more and write about it more, but we’re working on our social media consulting business, where we have deep knowledge and understanding. However we see that social media is relevant to sustainability economy, so we’re moving in the right direction no matter what.

Around 1966 or 67, Bert Rafelson and Jack Nicholson made a film called “Head” starring the Monkees (Nicholson was the screenwriter). There’s a scene in that film, where the Monkees stumble into a steambath where a Maharishi-like yogi is sitting, and he says this:

We were speaking of belief; beliefs and conditioning. All belief possibly could be said to be the result of some conditioning. Thus, the study of history is simply the study of one belief system deposing another, and so on and so on and so on… A psychologically tested belief of our time is that the central nervous system, which feeds its impulses directly to the brain, conscious and subconscious, is unable to discern between the real, and the vividly imagined experience. If there is a difference, and most of us believe there is -am I being clear? For to examine these concepts requires tremendous energy and discipline. To experience the now, without preconception or beliefs, to allow the unknown to occur and to occur, requires clarity. And where there is clarity there is no choice. And where there is choice, there is misery. And why should anyone listen to me? Why should I speak, since I know nothing?

A.I.G.: great story, wish it was fiction

Michael Lewis does a great job telling the story of A.I.G. and how it failed, bringing down the global economy. It’s fascinating, especially how much the tumble evidently depended on the failings of one guy, Joe Cassano.

The people still left inside A.I.G. F.P. like to list just how many things had to go wrong for their business to implode. Any one of a number of things might have sufficed to avert their catastrophe: our political leaders might have decided against the Wall Street argument not to regulate credit-default swaps; the ratings agencies might have resisted the Wall Street argument to rate subprime bonds AAA; Wall Street banks, in 2006 and 2007, might have declined to replace A.I.G. F.P. in the role of subprime risktaker of last resort; and on and on. Their list is mostly a catalogue of large, impersonal forces. But impersonal forces require people to conspire with them. Joe Cassano was the perfect man for these times—as responsible for a series of disastrous trades as a person in a big company can be. He discouraged the dissent of subordinates who understood them better than he did. He acted with the approval of A.I.G., but he also must have known that A.I.G. wasn’t able to evaluate his trades. Once he was persuaded to stop insuring subprime-mortgage bonds, the logical course of action was to reverse the deals he had already done. In 2006 he might have found a way to do this, if he had been willing to accept the costs involved, but he wasn’t. Had he been, the machine he helped to create would have kept running—by then it had a life of its own—and the losses would have simply wound up more concentrated inside the big banks. But he’d have saved his company.

Data glitches: how to get right with your customer

My friend and colleague e-Patient Dave deBronkart explains how misinformation from a customer service agent for Verizon led to a massive international data charge on his mobile phone bill. Verizon was stellar in their handling of the problem. Key point: they didn’t try to make him wrong or make it his problem.

I won’t try to paraphrase his post – it’s pretty rich. Read it here. He explains Verizon’s checks and balances for mitigating the problem, what he did as an empowered/engaged/activated consumer, and what the implications are for empowered patients and people dedicated to improving healthcare, where data issues are common and a big deal.

Doug Rushkoff on Life, Inc.

For the last week and a half, I’ve been leading a discussion with Doug Rushkoff about his new book, Life, Inc. You can find us on the WELL. Doug’s analysis of the coevolution of the corporation and contemporary cultures and economies is important to consider; it points to the need for a new sustainability economy.

Of course centralized currency works for some. Hammers work for some. They just suck at brain surgery. Centralized currency is not the only kind of currency there could be, and it has certain biases to it. It would work a whole lot better if there were other currencies that promoted circulation over hording, and abundance over scarcity.

Yes yes yes. Some things are scarce, and scarce currencies can help orchestrate scarce markets for scarce things. They also help very wealthy people stay wealthy without working – and I make no judgment on that. There are many people who we might want to keep rich, even though they create no value. Or businesses that are just going through a rough century or two and need to be able to stay afloat by investing and growing rather than creating or innovating. And they should be entitled to use whatever they can.

But we – people who create value, who work, who innovate – should also be able to work with currencies that reflect the value we have created. Just as people used to get a grain receipt for every pound they brought to the mill – a receipt that could be traded – we, too, should be able to work currency into existence. We shouldn’t have to work *for* someone who has borrowed money at interest from the bank in order to pay us; we should be able to use a kind of money that reflects the abundance of our output rather than just the artificial scarcity of the treasury.

We’ve got a currency system that could not support the introduction of a renewable energy source. That should give us pause. We don’t have to destroy the Fed. We simply need additional mechanisms for value exchange.

Free as in beer

In the New Yorker, Malcolm Gladwell runs a sanity test on Chris Anderson’s book Free: The Future of a Radical Price.

There are four strands of argument here: a technological claim (digital infrastructure is effectively Free), a psychological claim (consumers love Free), a procedural claim (Free means never having to make a judgment), and a commercial claim (the market created by the technological Free and the psychological Free can make you a lot of money). The only problem is that in the middle of laying out what he sees as the new business model of the digital age Anderson is forced to admit that one of his main case studies, YouTube, “has so far failed to make any money for Google.”

Why is that? Because of the very principles of Free that Anderson so energetically celebrates. When you let people upload and download as many videos as they want, lots of them will take you up on the offer. That’s the magic of Free psychology: an estimated seventy-five billion videos will be served up by YouTube this year. Although the magic of Free technology means that the cost of serving up each video is “close enough to free to round down,” “close enough to free” multiplied by seventy-five billion is still a very large number. A recent report by Credit Suisse estimates that YouTube’s bandwidth costs in 2009 will be three hundred and sixty million dollars. In the case of YouTube, the effects of technological Free and psychological Free work against each other.

Note that Gladwell’s review is available free online, and Anderson’s book costs $17.19 via Amazon.

Open Architecture Products

Andrew Lippman on “open architecture products,” and viewing customers as partners who will contribute to the evolution and design of the products they buy and use.

The stability that we associated with products is gone. And so if you try to base your business on a product that you think will last a long time, then I suspect you’re likely to be in trouble — because society will change more rapidly….The young are not satisfied with products. They’re satisfied with things they can build into their own products. And so the challenge is to build those as open-architecture products. (From MIT Sloan Review)

www.hsmglobal.com

Mega-Regions, nouveau rail, and connection

Richard Florida on Mega-Regions and High Speed Rail: “…fordism has come smack up against its limits. It’s cheaper to produce many industrial goods off-shore, and the geography of post-war suburbia has been stretched to its breaking point. It may well be impossible for sustained recovery to come from breathing life back into the banks, auto companies, and suburban-oriented development model. A new period of geographic expansion – or what geographers term a ‘new spatial fix’ – will eventually be needed to spur a renewed era of economic growth and development….New periods of geographic expansion require new systems of infrastructure….”

Mega-regions, if they are to function as integrated economic units, require better, more effective, and faster ways move goods, people, and ideas. High-speed rail accomplishes that, and it also provides a framework for future in-fill development along its corridors. Just as development filled-in along the early street-car lines and the post-war highways, high-speed rail will encourage denser, more compact, and concentrated development with growth filling in along its routes over time.

I’ll just add that we’re evolving a network economy where modular diy (or bootstrap) business development can take root, and I suspect the future will depend on our ability to connect more than it will depend on our ability to grow. We have technical infrastructure to support connection, light rail could be part of the physical infrastructure. (Thanks to Tim O’Reilly and Steven Johnson for pointing me at this piece.)