Monthly Archives

November 2007

Personality important on social media sites

By | Entrepreneurs, MySpace, Social networks, Social software | 6 Comments

In the last week or so I’ve read two posts which stress the importance of personality on social media sites.  First Danah Boyd’s essay on why Myspace won out over Friendster has a whole section which describes how Myspace founder Tom Anderson was a nice guy and popular with his members whereas Friendster founder Jonathan Abrams was positively disliked by his.  Then today I’ve been reading Reddit Case Study: How personality impacts product success over on Startup Review.

Personality on a site is one of those intangible little things that can make the difference between success and failure, but is impossible to design in.  Somehow it is either there or it isn’t, and it comes direct from the founders.  I think it’s absence goes a long way to explaining why a lot of corporate social media sites struggle to get traction.

Writing this I am reminded of a point I have made before – that the best sites are often designed by entrepreneurs for themselves and their friends, at least initially.  Much easier to get the personality right this way.

Also of interest in the Reddit Case Study was the discussion of how they got the site moving.  For me, two things stand out – firstly that they got initial traffic of 3-4k users per day from Paul Graham’s site, and secondly that the company posted all the initial stories themselves, but using a variety of pseudonyms.  In just about every consumer internet success story I have heard there has been a similarly scrappy approach to getting to critical mass.

All the furore about online advertising is a sign of a vibrant market

By | Advertising | 2 Comments

A week ago Dan Greenberg wrote a post on Techcrunch which describes how to game YouTube to make videos go viral.  This has created quite a storm – check out the 493 comments for yourself to get a full feel for the passion, but as Alan Patrick points out (and thanks for the tipoff to the post) Mike Arrington’s response is peachy:

I will post a longer response to this later, but frankly I’m disgusted by this.

As Alan also points out the EU is investigating targeted ads, and we are all familiar with the fuss surrounding Facebook’s new initiatives (I’ve even written a bit about this myself).

For me these are all signs of a vibrant market.  Lots of advertising is happening and people are experimenting with ways to make it more effective – some of which will I’m sure fail horribly and some will hopefully succeed.  I am convinced there is value to be unlocked by targeting ads against private user data – this way ads become more relevant and less irritating.  We may even get some way towards the holy grail of advertising as content.

Making progress on this dimension means experimenting in a difficult and emotion laden area.  People are very sensitive about their privacy.  I think over time some experiments will work, and we will all start to get comfortable with new trade-offs between usage of our private data and services we are given for free.  Some experiments will also fail, and there will be casualties as a result – maybe even entire companies (certainly Facebook is at a high risk point right now), but I see little chance that the system will collapse.  For that to happen people would have to stop doing all the wonderful social media things we have come to love.

Alan describes the nightmare scenario in the following quote:

The problem responsible Advertisers have is that there is a “tragedy of the commons” effect going on – the irresponsible Advores will pile in now, make whatever money is on the table, but create the customer and regulatory backlash that will destroy value for all ongoing. “Tragedy of Commons” situations typically tend to only stop when the ecosystem collapses.

Somehow I just can’t see all this coming home to roost.  Much more likely for me is that some sites push things too far and their audience migrates to other sites which are less aggressive in their monetisation strategies and that over time we reach a happy balance.

This view is underscored by the belief that when companies get this wrong we might feel spammed, maybe even by our friends, and we might feel that our trust is abused and the odd embarrassing fact might crop up as a result, but the downside is really not that bad.  In fact it is irritating rather than harmful – and irritating will make people go to other sites, not stop using the web altogether.  Similarly irritating won’t drive regulation.

I guess, before I can finish I have to touch on identity theft – it is a real, growing and increasingly worrying problem, but it is only tangentially related to the issue of targeted advertising.  Moreover the solution lies in making it difficult to manufacture identities rather than not sharing personal data (I’m talking at the systemic level here – clearly we all need to be careful in our personal situations on a daily basis).

Mobile internet – when will it take off?

By | Facebook, Mobile, Open Source | 5 Comments

I have blogged a couple of times on the one internet versus two question, and it seems the debate is still raging – Alan Patrick wrote a great post on the subject last Sunday over on Broadstuff.

There are a couple of things I want to pull out from that post.  Firstly his concise statement of the one web or two arguments deserves repeating:

there are currently 2 main schools of thought – (i) define a unique “mobile web” [aka the two web argument], and (ii) make devices better at coping with existing web content [aka the one web argument]. The problem with the mobile web option is the expenditure given the low pull through (plus the soiled reputation of WAP, the first attempt at this). The problem with the One Web option is the ergonomics of a small screen and limited key functions.

Like Alan, my sympathies are with the one web crew.

The second passage I want to pull out gives the reasons why the mobile internet has never really taken off:

(i) There is limited collaboration across the value chain (content standards, distribution standards on Mobile TV, handset standards etc) which makes the “friction” in the supply chain high compared to alternative (IP based) plays.

(ii) This means that the user audience finds mobile multimedia hard to use, they tend to try it out and then (apart from a small subset) by and large give up on it.

(iii) In addition, the economics of “pay as you go” drives people to minimise service / content usage – and there is still a lot of fear of “sticker shock” from big data transfer charges for content usage. [The emerging all-you-can-eat data packages are not making much of an impact yet.]

(iv) This small audience means that the economics of new content and service creation are less enticing than they should be. Exacerbating this is the small share of these small revenues that the upstream players typically get in most schemes.

The good news is that I am starting to feel in my water that things are not too far off changing – i.e. that the long awaited breakthrough on mobile might not be too far away.  To be fair, I’ve felt this before, and it hasn’t happened, but hopefully I’m a bit older and wiser now.  It’s got to happen sometime after all.

That said, I ran into Fred Destin on the street about an hour ago and he was a bit more pessimistic.  I mention that because he is a guy who knows a thing or two about this space.

The reasons to be optimistic are the number of services that are starting to get traction.  As well as the whole ring tones and games story that has been running for a while there is good news starting to come out of more internet-like services.  For example I have heard positive things about Flirtomatic, Mobango and Zed in the last week, and I am also encouraged by things like Facebook’s mobile app, Google maps on the mobile, Google Android, the progress of mobile linux and even the iPhone (although I don’t think this is revolutionary).

A lack of standards has clearly held back the mobile internet – and common standards are an essential pre-cursor to things really taking off.  That is the lesson of DoCoMo.

As I see it, we could get common standards in one of three ways:

  1. Everybody agrees at the W3C
  2. A single company is able to dictate standards
  3. A service takes off and standards coalesce around it

The mobile value chain is such that I don’t think 1 or 2 will come to pass any time soon (not even with the arrival of Apple on the scene).  Which leaves me with 3 – and even that may be fanciful to hope for given the huge number of obstacles in the way of building a compelling mobile service.

But for now at least my antenna are up.  For the reasons cited above we may not be too far from a tipping point in this market.

Activity on social networks continued – different on different sites

By | Facebook, MySpace, Social networks | 3 Comments

Regular readers will know I have been pondering the question of what people are actually doing during the hours they spend on social networks each week.  My earlier posts are here, here and here.

I think this will be the last post on the subject, and this little thought journey has led me to the conclusion that these sites are more different than I had thought – sufficiently different in fact that it is probably wrong to think of sites like Facebook, LinkedIn, Myspace, Bebo, Piczo etc. as full competitors.

Let me paint a picture of what it is that people are spending their time doing, at least as I see it.  This has come from reading blogs and research, talking to experts (including entrepreneurs and investors in this space) and looking at my own behaviour and that of my friends.  It is not definitive and will almost certainly include some of the sorts of generalisations that irritate me when I read them elsewhere.  If you find any of those please tell me!!
My first observation is that there is a flurry of initial activity when any user joins a new network.  This covers exploring the site, building up the friends list and developing the profile page.  This is pretty similar on all sites, and Danah Boyd describes it well in this essay.

After the initial burst of activity the average user will settle down to a more consistent pattern of behaviour.  The average social networker is a member of 3-5 sites and they will split their time across the different properties managing their local network and doing what each site is best for.

There is one common element to that across all sites – which is profile-hopping, a form of entertainment that could be characterised as gentle voyeurism.

Beyond that I think things start to look a bit different depending on which network you are talking about.

Facebook is mostly about communication – people spend most of their time sending status updates, private messages, writing on people’s walls, poking people and messaging groups to organise events.  The photo sharing element shouldn’t be forgotten though.

Myspace it seems is much more about the music – discovering, consuming and participating as a fan.  That said there is a good deal of communication and self expression as well.

Piczo could be thought of as the opposite to Facebook.  The emphasis is squarely on self expression and communication is limited.  New users are given a blank page on which to build their profile – no templates for guidance and infinitely more creative options than Facebook.  In an effort to provide a safe environment communication is made difficult – there is no search function to find people.  If you would like to chat with someone then you need to get their Piczo URL by some means other than Piczo itself – e.g. written on a piece of paper in the playground.

LinkedIn is mostly about hiring and finding jobs.  The dominant use case is working the network to look for a job or find people to hire.

Of the sites listed here Bebo is the one I know least well.  I mention it because of their recent push into TV/video.  They are very successful with school children which tells me that communication and self expression are important – but it is interesting that they want to move the experience towards media consumption.

As a result of these differences (or maybe because of them) the demographic profile of these sites is very different.

Danah makes the point that successful sites often form the online component for dense offline communities  (at least to start with) – e.g. Bebo in UK schools, Facebook in US universities, and Myspace for some LA communities.  That is a communication function.
If this view is right, then these different sites are partial competitors.

If Danah is right, and I think she is, then one would expect fierce competition between the socnets to get the different offline communities to pick them as the destination of choice (and Danah’s essay is in large part about how that played out between Myspace and Freindster) – but then after that one would expect the strategies would differ as the sites cater to the interests of their different groups to generate long term sustainable activity on the sites.
This logic would explain the Bebo move into media, the way Myspace has embraced music and the LinkedIn focus on jobs.

As these strategies develop these sites might start to become more and more different and therefore to compete less and less.  They will then become analagous to general media properties – competing with each other (and everyone else) for attention rather than on the basis of who has the best feature/function.  More like a soap opera versus a sitcom than Eastenders versus Coronation Street.
For this to be true there has to be more long term sustainable activity than initial flurry activity and I don’t think we are there yet (execpt maybe on LinkedIn), and the network specific activities need to be more important than entertainment via profile hopping.  I think we will get to this position over time – but it is too early to say that for sure.

Devolving decision making improves productivity – great for Enterprise2.0

By | Enterprise2.0, Entrepreneurs, Venture Capital | 10 Comments

Carlotta Perez has long had a strong influence on my thinking, and a key part of that is the belief that the organisational structures and cultures that were optimal in the past may not be best going forward.  She argues persuasively that the command and control mode of organisation that characterised the most successful firms during the era of mass production will most likely not be appropriate for the age of the internet.

The biggest influence of the internet is probably that it enables switched on firms to do things at a speed that simply wasn’t possible before.  Product design times are decreasing every year, supply chain efficiencies are compressing the time from raw material to delivered product and, as I’ve blogged about a lot recently, the internet is increasing the pace of dialogue between customers and suppliers.

To take advantage of this companies need to make themselves more agile.  Not many people would disagree with that.  More controversially, it has seemed self-evident to me for a while that devolving decision making has the potential to unleash an agility that will always be impossible if decisions have to travel up and down a corporate hierarchy.

It is this belief that has inspired my interest in Enterprise2.0 technologies, and edge-in adoption models.
If decision making is to be devolved there will be a requirement for new forms of collaboration – but, for a while at least, these will be varied across the enterprise, hard to predict and may change rapidly.  Lightweight collaboration tools that are chosen and configured by the end user are the obvious solution.

As with most things in venture capital this has been more hypothesis than proven theory, so it was with pleasure this morning that I read an FT article which provided supporting evidence to the central element of this theory – that companies with devolved decision making are more efficient.

The article reports on the results of interviews conducted by the University of Sheffield with almost 600 companies.  Unfortunately they don’t share the underlying data, but a couple of quotes make the point quite nicely:

handing more power to shop-floor workers to decide how to boost output has worked wonders for parts of the manufacturing sector

and

“We found that companies which devolved more decision-making responsibility to front-line employees showed an average 7 per cent increase in value added per employee [a year],” said Prof Wood.

This survey provides welcome evidence that there is a good opportunity to build new companies in the Enterprise2.0 space.

Facebook making mistakes with Beacon

By | Advertising, Facebook, Social networks | 3 Comments

A couple of weeks ago I posted some details on Facebook’s new advertising platform.  I described what they are doing, said it was smart that they are trying to leverage the trust/friend relationships in the site, but warned that the execution would be difficult.

The key risk, as highlighted in the comments, and also by Alan over on Broadstuff, is that greed triumphs over wisdom and the trust/friend relationships get turned in conduits for advertising spam.  At the limit we might all stop using Facebook because we tire of getting constantly inundated by messages about what our friends are buying.

At the moment we trust Facebook not to abuse the information we put into the site – including who aourfriends are.  But this type of trust is a fragile thing and once broken it is very difficult to repair.

It is for this reason I concluded my last post by saying that the execution would be tricky, but I also said that so far Facebook seemed to understand the risks and challenges.

It looks like I was wrong.

First a little example of how the Facebook Beacon system works from Joho (thanks to Fred for the pointer):

The new ad infrastructure enables Facebook to extend their reach onto other companies’ sites. For example, if you rent a copy of “Biodome” from Blockbuster.com, Blockbuster will look for a Facebook cookie on your computer. If it finds one, it will send a ping to Facebook. The Blockbuster site will pop up a “toast” (= popup) asking if you want to let your friends at Facebook know that you rented “Biodome.” If you say yes, next time you log into Facebook, Facebook will ask you to confirm that you want to let your friends know of your recent rental. If you say yes, that becomes an event that’s propagated in the news feed going to your friends.

And now about how they are getting the execution wrong, also from Joho:

Facebook gets the defaults wrong in two very significant areas.

When Blockbuster gives you the popup asking if you want to let your Facebook friends know about your rental, if you do not respond in fifteen seconds, the popup goes away … and a “yes” is sent to Facebook. Wow, is that not what should happen! Not responding far more likely indicates confusion or dismissal-through-inaction than someone thinking “I’ll save myself the click.”

Further, we are not allowed to opt out of the system. At your Facebook profile, you can review a list of all the sites you’ve been to that have presented you with the Facebook spam-your-friends option, and you can opt out of the sites one at a time. But you cannot press a big red button that will take you out of the system entirely. So, if you’ve deselected Blockbuster and the Manly Sexual Inadequacy Clinic from the list, if you go to a new site that’s done the deal with Facebook, you’ll get the popup again there. We should be allowed to Just Say No, once and for all.

It is often the small things that are the difference between success and failure.  In this case getting the defaults wrong could destroy the trust in the whole system.

More musings on the essence of social networks

By | Facebook, MySpace, Social networks | 9 Comments

Thanks to Nnamdi again my understanding of what is actually going on under the hood on social networks is on the increase.  This learning by writing is one of the things I like most about blogging.
In a comment yesterday Nnamdi pointed me to Fred Stutzman’s blog.  Fred is a really insightful thinker on the whole social network space with a whole heap of interesting posts.  The one Nnamdi pointed to builds on the thinking of Jyri Engestrom about social objects (which you can read about here) and makes a distinction I have not come across before between object-centred social nets (Flickr, Delicious, Digg etc.) and ego-centred social nets (Myspace, Facebook, etc.).

This is an important distinction, and gets over the difficulties in applying Jyri’s social object model to sites that are more about people.

To address the question that got me into this in the first place, it also makes it clearer what people are doing on sites like Myspace and Facebook and starts to answer questions about their sustainability.

Fred’s site looks at this question in some detail, and he also links to a great essay by Danah Boyd which also provides some great insight.
In a nutshell, as per Fred and Danah at least, most of the activity on ego-centred sites is about self expression, self investigation and building groups of friends.  These are ‘burst of energy’ rather than ‘keep doing it for years’ activities and hence questions about the sustainability of the traffic and page views on these sites are legitimate.

I will return to this topic later, but for the impatient amongst you, check out the links above.

Thanks again Nnamdi.

‘Mediated voyeurism’ – one use of social networks

By | Facebook, Social networks | 4 Comments

Yesterday I was wondering what people actually do on social networks. Now we have an answer, at least a partial one, thanks to a comment from Nnamdi which pointed to this research from North Carolina University on Facebook usage.

For students, who make a up a large part of the Facebook user base apparently:

The most prevalent use of Facebook was as a social activity – students reported using Facebook with friends to view and discuss other people’s profiles. Essentially, Facebook appears to operate primarily as a tool for the facilitation of gossip.

A bit later in the study they describe this as mediated voyeurism:

“…the consumption of revealing images of and information about others’ apparently real and unguarded lives, often yet not always for purposes of entertainment but frequently at the expense of privacy and discourse, through the means of mass media and Internet.”

Calvert (2000)

This is only a partial answer as the study was confined to students.

More on this as and when I get some answers.

What are people actually doing on social networks?

By | Facebook, MySpace, Social networks | 4 Comments

This is a question that has been pre-occupying me for a couple of days now, and it doesn’t seem like there are any really good answers.

It is important because it goes to the sustainability of social networks – as individual companies and as a nascent industry.  As with any new web service there is an initial buzz of activity from new people when they join and then this settles down to a lower level of activity which is maintained over the long term – and if there is enough activity there is a good business.

Social networks have continued to rise and rise, and whilst I don’t think many people would argue that there isn’t enough base level activity to sustain a company the extent of that activity, and hence the potential of the category could be clearer.  Or to put it another way, I think the opportunity is large, but understanding what the long term sustainable activity looks like would improve my confidence in that conclusion.

I think the issue is complicated by the varying activities on different social nets and the difficulty of separating new activity from sustainable activity in such a fast growing market.

I can see for myself that the long term activity is around status updates (broadcasting my own and getting quick updates from my friends) and a couple of Facebook apps – most notably BlogFriends (which uses the social graph to deliver a mean feed reader).

I’d love to know what the answer is for the social networking population at large though.  I was on a panel yesterday at a Silicon Valley Connect conference here in London and people didn’t seem to have the answer.

I suspect it is some combination of:

  • Profile hopping
  • Messaging (this is starting to become a drag for me)
  • Managing events
  • Discovering music (particularly Myspace)
  • Expressing identity (particularly on the kids nets)

How the X hours per week that people spend on average on Facebook etc. splits across these and other activities would be great to know, and any news on sources would be very welcome.