Monday, June 13, 2011

Why we won't see the 90's dotcom bust this time - The Virtual Business is really here

This year there will be a flurry of IPO's.  Linked In already went public last month with much hoopla.  Pandora, Zynga and others are doing the same.  As many of us remember, in the late 90's many millionaires were created and then destroyed as quickly as they got rich.  It seemed back then that every company with a pulse had set up a storefront that was going to be the next huge business.  When the bubble did eventually burst in 2001, most people simply said that many businesses were not meant to be run over the internet or people just don't trust the internet as a mode of doing business.  And while we have seen a good many of them survive and thrive (hotwire, expedia, ebay, amazon etc), the bubble ruined a lot of dreams.  In fact, many things I have read chalked it up to generational issues.  By this I mean, that Gen X was not really savvy enough to become the online consumer and that it was important for us to wait until Gen Y was the overarching consumer.

If we fast forward 10 years, things appear different.  Gen Y is the overarching consumer now.  Many companies have figured out how to grow using the internet as a business platform.  Everything seems honkey dorey so to speak.  I believe in the coming internet boom of the 10's.  Why? It has nothing to do with the consumer and everything to do with the business.  The consumer is clearly ready.  The social graph says so.  The number of consumers used to using the internet is now a way of life.  This is an important part of making the internet economy thrive.  It has shrunk the world for sure.

Why do I think it is not only the consumer's readiness (an important part)?  Because I believe there is a three legged business stool that is being created that will change ANYONE's ability to compete in this new internet economy.

What is this three legged stool?  The first is the virtual storefront.  The second is the virtual marketing machine and the third?  (It would be my blog if it wasn't the third leg) The third leg is the virtual consumer research marketplace.

First - The virtual storefront...

One of my hypotheses on why the dotcom bust came had to do with what I would call the lonely virtual storefront. During the 90's the internet most certainly empowered companies big and small to be able to reach a much wider audience for their business in a much simpler way.  A small company in a small town in Texas was now enabled to sell their products to anyone anywhere in the world.  In essence, the storefront went global with the use of technology.  This is an obvious point that anyone would agree with.  But when the virtual storefront went up, many people forgot that having a great product with an ingenious store is not enough to attract customers.  You need marketing, word of mouth and trust.  In the 90's the virutal storefront was accompanied with what...traditional marketing media to attract consumers. and its puppet.  Etoys and their great song intro. The list goes on.  Both of these companies worked to use traditional marketing to attract its consumer to a new way of doing business on their virtual storefront.  It didn't work very well.  They loved the commercial but their habits hadn't changed AND the virtual storefront didn't have a virtual way to market at a low cost.  It made it prohibitively expensive for anyone to set up their store and reach their target.  That is until the late 00's...

The virtual marketing machine (Twitter/Facebook anyone?)

As the 00's wore on and people were thinking very hard about how to make the Web work many new services that enable trust and infrastructure to the virtual storefront emerged.  We have Paypal, which helped consumers transact with each other.  Ebay gave the everyday person a way to sell what they wanted which showed people that the web was trustworthy.  The litany of security technologies that arrived to you feel safe to use your card on the web.  And essentially events occurred that helped people change their behavior.  I hate shopping at Christmas why not do it from my house?  I loved that BBQ sauce in Memphis, I wish I could buy it...You Can Now!.  ETC.  But then the game really changed with Twitter and Facebook.

The advent of these two services which by the way make up 86% of our consumer insights index arrived on the scene and everything changed.  Why? Because beyond ads online and SEO to get your name out there, marketing became nearly free.  With these two dominant social networks, a company's ability to reach consumers changed overnight.  My sister, for instance, has a photography business.  She does weddings.  She tells me that with Facebook alone, she gets business because her clients refer her and post their pictures to this very personal engagement.  Like wildfire there is more business.  When an independent business owner can market themselves for free AND setup their virtual storefront they are now empowered to compete with big companies.  In fact, they have an advantage because their consumers do wonders for them.  Facebook and Twitter are the linchpins to give anyone the ability to run a business cheaply and effectively.

Virtual Consumer Insight Genreration!

So I now have two legs of the social media stool to run a business...the last piece is coming.  The ability to understand consumer behavior in a much less expensive way.  Enter social media analytics/listening or whatever you want to call it.  With the advent of natural language processing, at Netbase we have given people a vehicle to understand consumers who talk in the virtual world.  The power of this is founded in two things.  For one, our tools give accurate information about this sentiment.  And second, because we have indexed billions of sound bites expressing emotions from consumers, you can look at any topic.  This means you have an inexpensive way to do research on your own business, but also you competitors as well.

Today, someone wanting to set up a business can put up a virtual storefront, market to hundreds of millions of consumers for free and soon they will be able to study what people are saying at a significanlty reduced rate.  You as an individual can have a completely virtual business that could compete with multi-billion organizations because the data AND the consumers are there for you to touch any time any where from the comfort of your computer screen.

And now I am going to tweet this blogpost so you read this...tweet it to someonelse if you do...that is how my virtual business as an innovator can grow!

Wednesday, June 8, 2011

The social media speed of insight - Better get on the bus

I mentioned in my last post from the conference I attended how people even within the market research field know the importance of the change social media will bring (change more the operative word for me), yet their is a lack of trust and therefore a lack of adoption of this data except for the innovators and early adopters.

I thought I would put in an even more granular perspective as to why corporate culture must get its head around and ahead (pun intended) of what is coming.  The real issue I have been hearing in my discussion with those who track consumer behavior is there lack of trust in social media for several reasons

1.  Who creates the data - This is a big one.  People will acknowledge that there is no question the social graph is normalizing, but there is still a huge question of whether the total numbers of consumers are "representative".  And by respresentative I mean how CPG and large marketing/market research functions segment their consumers.  In my experience, most big companies study their core consumers and segment/name them as a means of figuring out who their brand really targets.  These groups are often very specific from a demographic perspective giving them the target they need.  As for social media and the social graph, because no one has done a great job of being able to break down the data in this way, people are skeptical of how to link this data to that way of thinking.  They also don't trust who puts the research on the web.  Many have questioned if it is being influenced by the companies who market online.  There are other issues with who creates it, but you get the idea.

2.  The data's accuracy - This one is obvious and even those not in the field worry about this.  It is accurate? how can I trust it?   I will come back to it, because this is the fundamental problem that could spell big companies' doom.  This is what I consider the most cyclical of issues in social media. And those who get caught in the tornado can't get out...I fear for them.

3.  How do I quantify?  I am a scientist (I have a PhD in Chemistry and I play a market researcher on TV) DNA is embedded with the need to quantify things (even if it is isn't in my profile...I hate details and love concepts).  Even with my aversion of details, I still believe completely in the need to control your studies in a way that comparisons can be made accurately.  I am looser than your average scientist because I like thinking about change and big idea, but regardless I appreciate the need for quantification when making statements about data.  And when it comes to consumers, the variety of the human dynamic, makes it even harder to quantify and then correlate information.

4.  The boss didn't tell me to - This is the lamest and unfortunately the buddy of the other three.  Fearing for one's job by taking a risk is the worst reason not to do things.  It is how companies live and die.  Only through the passion of its people will companies recognize change when it is coming.  I am not even going out on a limb that while this is number 4 on the list, the chasm between a marketer or market researchers behavior as a consumer (they use the internet...see the last post) and their behavior as a professional (they don't trust it) makes this the scariest of reason why the social media speed of insight could swallow them whole.

Regardless of whether these are good or bad reasons for not adopting change (and in this case the change is social media data to drive the business), they are real and I see them everyday as I work with many people across many organizations at many levels. Now to my point and the thing I want anyone who reads this to think about.

One of the great hindraces in the outstanding minds in the market research firms is speed.  Market researches love to quantify and make sure they have their i's dotted and t's crossed.  This thinking is something that can hinder the accpetance of social media.  Actually it makes sense.  That being said...

The speed at which the data is developed is accelerating so fast and vast that if you cannot understand how to process it and understand it, it could change an hour later causing you to make a mistake in your interpretation.  Once more, this data is competely public and spreadable in the flash of a second.  Case in point, within 15 hours everyone was aware that a man in Pakistan named Sohaib Athar had not only tweeted that Osama Bin Laden was dead, but they knew he was doing it without knowing it.   This news spread worldwide in less than a day.  In fact, the day that Osama Bin Laden was killed, if you searched on NetBase product the term Obama you would see the data more than double every hour of the day until it reached millions of sound bites by the end of it. research will eventually live in a world where quali quant might have to be good enough or at least until the technology can track it quickly and efficiently.  But for now...we may have to throw out how we think about things...

If you are getting caught up some of the reasons social media is not viable think about the consequences.  If you don't get on board to do the following:

1.  What is my social media strategy?
2.  What is the suite of tools I need to monitor, understand and respond to social media?
3.  What resources will I assign to understand and deal with social media?
4.  What external sources/partners will help me break it down, understand it, react to it and plan for it?

These things take time and money in any company and in a big one this could easily take 18 months to get through.  So if you haven't started, don't trust it and still have leaders afraid of it you are losing ground on those who have started, trust it and have leaders that aren't afraid of it.  And every second you keep thinking about what to do those who already know are only gaining more ground on you.

It is time to cross the chasm because between the public nature of social media, the volume it creates and the speed at which it can affect you, the time is coming where those who are on board will be unable to compete.

Good luck moving the mountain because if you are reading this and nodding your head, then you are a change agent, champion or expert and you may have an uphill battle to face.  Drop me a line if you want a partner in crime!

Let's get this party started right!  wOOt!

The social media adoption conundrum - Change Agents and Evil Planners wanted!

This week I was at the Marketing Research association conference selling my social media wares and I even had the privilege to speaking on the topic to a group of very smart market researchers. What was most intriguing to me as I stood in front of about 60 people was the answer to the following question. As I started to share with the group a case study using social media data to look at a brand, I asked the following, "Of the people in this room how many of you trust social media as a viable data source for doing research?". Do you know how many professional market researchers raised their hands to affirm their trust of social media?


One would think in the belly of the social media application beast so to speak that more people at this point would be willing to trust social media data even though it is different and strange. You know why? Because when I followed up the first question with another question later in my presentation, one that completely changed directions on them, I received something different from the audience. This time I made it personal.

My second question...,"When you buy an appliance or piece of electronic equipment what is the first thing you do to decide?" Then I asked, "How many of you go to read reviews on the web?"

The response this time.....

58! FREAKING 58 OUT OF 60!

I think you get the point. When it comes to change and in this case social media, getting people to apply something to business they already personally use as consumers each and every day demonstrates the importance of culture in the equation. I can't tell people enough if you are selling innovative solutions from the outside in, you are playing a game of culture. A game that is long and hard, but can be worthwhile should you choose to do battle and choose to build the right skills to do it. And as a person who was the champion in a large organization I will say this, it takes one to know one. Whether you are trying to get a large organization to change the game or a person within the organization trying to create a change you believe in, expect effort, hardship and the need for a political savvy. Most importantly, however, know how to spot a champion or to be one to make it happen.

Innovation champions are gluttons for punishment, people who are passionate, believe in themselves and the need for change, and lastly are all about collaborative innovation. This is what it will take my friends if you want to see the social media NOON as I like to call it. Folks, this exercise at the conference (in front of a group of experts) showed me we are still in Social Media dawn. The early adopters are still whom I seek and there are just too damn many of you standing on the tracks staring at the oncoming train. I know I am an evangelist, but I also am starting to use simple logic on what social media means to business.

Simply put…the speed of insight is accelerating so fast that one’s ability to understand the data before there is more to interpret is too fast that you must find a way to keep up. In the past, one could say there is just too much data to process so we leave it to our gut. But today the equation has changed. Not only is the volume accelerating and getting out of control, but those who can latch onto something and drive it to the masses is becoming the new element in the equation. Folks, your suggestion box are now public and your market research wears no clothes. Your data is out there growing like the ebola virus and the experts (the audience I spoke of) are consumers who are not recognizing the impact it could have on their livelihood in the coming months (not years). We have already seen the Osama Bin Laden raid tweeted by someone by accident as it was happening. We have seen the logo changes of two behemoths judged in public (GAP and Starbucks) with differing results (GAP changed back within 7 days) and we see the downfall of the powerful in an instance when they stupidly choose to think the web won’t catch up with them (Rep. could you do that to such an accomplished and strong woman). We see it all around us, but we still the let the shackles of the culture of the corporate titanic ride towards the iceberg. Why?

Because I believe that Hugh McLeod said it best in a cartoon in his book Evil Plans…(which I just literally finished and while I don’t read much is inspirational…

“Why is creativity such a “dirty word” for big companies? Because it’s something that requires you to put your balls on the line.”

I believe those who are willing to do just that will be the ones who will become intoxicated with what it feels like to drive change and to feel empowered. It is easy to see why we shouldn’t do it. But how often in a day do you ask not “yes, but” but “yes, how”? Don’t be the corporate lulled consumer engaged cretin who didn’t raise their hand the first time but did the second time.

Lord knows even though I have been driving change for years, getting involved in this role has only accelerated my taste for driving change and my awareness of the box I have lived in even as a change agent. Going from intrapreneur to entrepreneur is what it took to unlock my voracious appetite for helping others and myself through sharing and learning. I guess it is my evil plan. Coming up with scalable ways to change how people interact, learn and get along better. To this end it is in the corporate context, but make no mistake I will keep writing about change, why going more deeply internal will help one impact more externally and keep focused on my evil plan. Hugh McLeod did for me what I try to do for others…give me a framework to think and learn…thanks Hugh.

Find your inner champion, embrace change and shout it from the trees. As for social media, don’t let the oncoming train hit you. On average, trains are usually on time and this one is approaching the station. Change is good…change is constant…change is the catalyst for learning to make life fulfilling.

Social media is merely a minor vehicle to state how change that will continue, but seeing that group of experts resist what they do everyday reminds me that one must never give up on preaching the value of different…I guess that is my quest and I will stick to it…

Friday, June 3, 2011

Building a WE enterprise plaform - the power of solutions innovation platforms

In order to build an innovation culture based upon trust, it is imperative above all things to link they elements to do this...the people.  As stated in past posts, I believe there are three key elements that must be aligned if one wants see their innovation culture thrive.  Simply mandating that you will partner your way to a collaborative culture is not enough.  While the concept of open innovation is very powerful and teaching those within any organization to look outside of their own culture to "trust" others to help is key, it is not enough.  This concept does clearly bring the intellect and abilities of those outside one's organization to bear and its value is great, but it does not guarantee that those who truly believe will not ultimately destroy these valuable concepts.

I remember a time when one of my employers funded a new ventures group that focused solely on bringing very cutting edge new opportunities into the company.  While many of their efforts were often way out there, one time they successfully purchase a very great brand.  The name was very versatile and would enable a whole slew of new products to be launched from a company that had a very traditional and narrow focus.  I remember hearing about the brand and saying to myself what a great idea.  It really fits with our company's focus and would really allow some great adjacent products to be developed and launched.  It seemed like the perfect fit.

Then this great idea was brought into the "business" so it could be positioned, tested, prodded and poked to make sure that it met with the criteria the business believed it needed to become a viable business. Essentially, a great open innovation idea was exposed to the rest of the organization.  This organization had no ownership of the decision, were not part of the process and frankly didn't truly subscribe the methods of open innovation.  That idea died one of the slowest and most painful deaths I have ever seen in business.  First, the materials to make the product were not good enough.  They were toxic, unstable and really didn't fit the model of the company's margin.  They needed to be totally redone.  Next, the marketing function didn't ''get" the brand.  Upon further review, it didn't really connect with the target consumer. Our model for success didn't quite fit this higher priced offering.  The consumer segment was wealthier and off target.  The brand was based on principles that couldn't translate.  We are not in those products on some of them. The list of what was wrong went on and on.   And before I knew it was dead and the person who sold it to us made a boatload of money because they bought it back at a very reduced rate.  Great investment for them.  What tore me apart, is conceptually it just made sense in every way.  But the lack of collaboration and ownership took a great externally developed idea and killed it with culture.

This is a long winded way to make one of my points.  Unless a company has the individuals (me), the collaborative group (we) and the company (enterprise) aligned innovation can never thrive in a seamless way.  Think about that.  Each enterprise has a culture of morays they follow and usually hires people that fit in with those morays.  This can be for the entire organization,  a function or a group, but at some level the need for people to follow the culture of the enterprise is important.  In addition, aligning with the strategy of the company is equally important to make sure it heads in a direction that is valuable. 

When this occurs however, a company must also remember that while everyone must align with the enterprise's goals that the ME's or individuals need to be respected as well.  In fact, isn't it true that everyone is different and has strengths and weaknesses.  These differences are very important if we want to work together collaboratively as a WE.

That brings me to the key to this post.  The ME's are all busy working diligently together as a WE for teh good of the enterprise, only the collaborative spark or synergy that exist can get great help now.  Over the past several years the social media idea platforms for driving innovation have appeared.  Companies like Bright Idea, Spigit and Jive.  This post is a tribute to them.  Those who are creating these collaboration platforms are creating the key networked infrastructure to make the WE become something that has an idea superhighway to bring people together more easily and seamlessly.

This type of system is the future foundation of what will make open innovation successful.  Why?  Because platforms like these are more than idea machines...they are the collaborative innovation network to connect ideas, drive collaboration which helps ME find other ME's to become a seamless WE. 

What will be the difference between success and failure of these outfits?  Can they evolve beyond the idea to bring about the tangible path to execution.  It is not enough to create a WE that surfaces ideas, the WE needs to won their execution, bring the right people around those ideas and ultimately manage the ideas to success.  But is is more.  Systems like these need to continue to think of themselves beyond mere ideation.  They are simply holisitc collaboration platforms.

I had the privilege of talking with Paul Pluschkell, CEO of Spigit a while back and in our discussion I can see the seeds of going beyond ideation there.  Spigit continues to expand its thinking about its innovation platform and I believe recognizes the importance of connecting the WE so the ME's and the ENTERPRISE can operate in harmony each and everyday.  Smart infrastructure like this is more than simple email or sharepoint (which merely feels collaboration folders), it is taking the idea of collaboration into an interactive and dynamic day to day operational use case.  And the person who can figure out how to make connecting those in a global organization as easy as logging onto your computer has brought the concept of artificial intelligence into the idea of innovation collaboration, seamless execution and total connectivity.

Bravo to those who see that will align the ME, the WE and ENTERPRISE which is the essence of a successful innovation culture.  And frankly, that is the internal dream coupled with the external dream open innovation hoped to achieve in the previous decade.  Without the connectivity internally bringing ideas from everywhere will not have the ownership internally which often leads the slow death of great ideas by politics and rigid culture.