Ted Shelton

Social Media Maturity Model

2011-07-23T16:37:00.000-07:00

We have been working closely with PRTM (now a part of PwC) to analyze our experience in working with clients on Social Media implementations and combining them with the results of a survey we recently completed on global enterprise adoption of a wide array of social technologies. Attached is a presentation providing a quick overview of our results:

Social Media Maturity Model

View more presentations from Ted Shelton

All About Gemz Loyalty Program

2011-07-01T13:17:00.000-07:00

One of the most exciting projects we have undertaken during my time as a consultant with Open-First was to work with Bryan Pearson, CEO of Loyalty One, on thinking through the future of loyalty programs. For 30 years Loyalty One has run a program in Canada called Air Miles Rewards. The question we began to wrestle with was whether the coalition model that Loyalty One had pioneered could be applied to local neighborhoods.

To try and answer this question we have launched the Gemz Loyalty Program. Focusing on locally owned businesses in neighborhood shopping districts, we have designed the program to be easy for shoppers and merchants to connect in a mutually beneficial relationship that encourages people to spend more money in their own local neighborhood.

Put simply -- every neighborhood wants main street to be successful. And yet, every day we find ourselves spending money online or at a chain store where we might get a slightly better price or more convenience, but we lose the benefits inherent in supporting local merchants. What are these benefits you ask? Civic Economics is one organization that has studied this question extensively and has conclusive evidence from multiple cities that shows the enormous economic impact that locally owned businesses have on local communities.

If our local merchants are more successful, we will have more vibrant cities, with higher sales tax revenues, leading to more city services and thus higher property values. The perceived savings of buying online or at a chain comes at a huge local cost.

Gemz aims to change all this by giving local neighborhoods a tangible benefit from shopping at local merchants on their own main street. By using the Gemz Application on a mobile phone (currently only Apple's iPhone) while shopping, customers of local stores can accumulate loyalty points (or Gemz) each time they shop at participating merchants. Think of it just like the airlines where every mile you fly earns points -- in a Gemz neighborhood every dollar you spend earns points. Shoppers save up for rewards, that are also offered in the local neighborhood.

For a merchant interested in offering the Gemz Loyalty Program, signing up is very easy. Any merchant can offer points to local shoppers through a printed coupon or from a mobile device.

Merchants can also elect to offer rewards to Gemz shoppers which can be in the form of free or discounted products or services. When local merchants accept Gemz from a customer though, they can redeem the points for cash -- making this a sale for the merchant even though it may be a free offer to the shopper.

In the months ahead we expect to launch dozens of neighborhoods but we have started in the Elmwood shopping district of Berkeley CA. Our second neighborhood is Menlo Park and we are expanding every few weeks. We know there is a lot for us to learn still about the loyalty business and how to help local merchants succeed, but what started out as a small experiment is now thriving and producing exciting results for everyone involved.

Zero Labor

2011-04-24T09:45:00.000-07:00

Back in January I wrote of the difference between "silicon valley" and Detroit and compared two different visions of a resurgent US economy -- one in which we "get back" the manufacturing jobs we have lost and the other where we recognize that the real driver of 21st century economies is innovation. This morning I saw two articles from Seth Godin (care of my friend Brett Bullington via Facebook) that made me want to revisit this conversation.

In the first, The realization is Now Seth writes:

...we're realizing that the industrial revolution is fading. The 80 year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

In part 2 Seth talks about how The opportunity is here:

The exchange of information creates ever more value, while commodity products are ever cheaper. It takes fewer employees to generate more value, make more noise and impact more people.

This is of little consolation to someone hoping to have a good job using their muscles to create value. But we can understand what is happening to the industrial economy by examining what has happened in the agricultural economy over the past 100 years. In these graphs (from this site) the decline of employment in agriculture in the US can be seen in the context of the simultaneous increase in farm productivity:
At the same time that employment was plummeting, farm productivity was exploding, resulting in enormous growth in output from US farms.

The underlying transition was a technological one -- from the physical labor of man and beast to the technical "labor" of tractors and chemicals (fertilizers, insecticides, etc). And fortunately for the health of the human species these advances continue and are being replicated throughout the world -- without this productivity improvement we would not have the means to support our global population of 7 billion people.

The same productivity enhancements that have transformed agriculture have also, for the past 100 years, been transforming manufacturing. Machines are increasingly more sophisticated and are informed by computation, not just mechanization. While the trend in the last few decades of the 20th century was to move manufacturing to economies with low labor costs, the trend in the next few decades will be to eliminate labor altogether.

An example of the sophistication of computation applied to tasks traditionally requiring human labor can be seen in this IEEE Sprectrum video on warehouse automation:

Kiva's robotic warehouse pushes human labor to the edges, and isolates their contribution to just that portion which requires the most intellect -- visually confirming that the selected objects are correct and match the customer's order.

In this same way we will increasingly see manufacturing coming BACK to the US, but with ZERO LABOR as the core model for making things profitably. We have exhausted the "cheap labor force" model - mechanization, automation, computation, and robotics are the chain that progresses manufacturing productivity into the next few decades. And where does that leave human beings in the new economy? Back to Seth Godin:

Right before your eyes, a fundamentally different economy, with different players and different ways to add value is being built. What used to be an essential asset (for a person or for a company) is worth far less, while new attributes are both scarce and valuable.

What are these new attributes? "Art and novelty and innovation." Seth writes. That is going to require education, engaged thinkers, and a new set of disciplines (and structures) for our society. This is the world we need to be investing in and the US can be a leader once again if we seize the opportunity provided to us by the computation economy.

Silicon Valley Vs. Detroit

2011-01-03T15:46:00.000-08:00

There are two very different ideas in the USA about where value is created in our economy. I frequently hear what I will call the "Detroit" perspective that we need manufacturing jobs in the US because, gosh darn it, everything is being "made" in China (or some other country). When Barack Obama was running for his current job I attended a fundraising dinner (in Silicon Valley) for him and he defended Detroit, the auto industry, and all of the jobs there when a question came up about his commitment to the environment (and anticipated policies toward electric cars). So it was nice late last year to hear Barack Obama say that "Steve Jobs is living the American Dream."

Which is somewhat short of understanding that the driving factor for the US economy (and job creation, Mr. President) is NOT manufacturing jobs, but instead is intellectual property.

First lets take manufacturing. Atoms. What differentiated value is there in the labor component of manufacturing?

Virtually nothing.

Therefore labor will first move to the lowest cost provider and second be eliminated (eventually altogether).

What you say? Eliminated?

Yes - the history of the industrial revolution (and the agricultural revolution) has been to replace the need for human beings by automating and mechanizing production. Produce more with fewer hours of human labor. Eventually robotics will eliminate 100% of human labor and routine and repetitive tasks will be done by machines so much more cheaply than humans can perform them that our children's children will wonder what we were thinking when we talked about manufacturing jobs (just as our generation has no idea what people on farms do anymore).

Furthermore, and now let us switch to intellectual property (bits), the majority of the value in the goods we consume in the developed world comes from the BITS and not the ATOMS. We pay a lot to Apple for the DESIGN of the iPhone, not for the physical atoms used to construct the phone. We pay more for blueberries prepared in a smoothie than in a bag from the freezer aisle. We pay to see Sandra Bullock win an oscar for her performance in Blind Side and not for some physical medium delivering the movie.

We need to understand how to build an economy that does a better job of promoting the creation of (and appropriate protection for) intellectual property. This is the 21st century imperative -- not manufacturing jobs. We need more products DESIGNED in the United States -- wherever they may be manufactured.

If you really want more things MADE in the US (as opposed to designed here) then one of the things we should be designing (and investing in as a country) is the fully automated manufacturing technology that brings production back to local markets - with zero labor.

But Detroit is not going to lift our economy to the next level. Silicon Valley will.

Silicon Valley comes to the UK (SVc2UK)

2010-11-25T09:48:00.000-08:00

Folks following me on twitter (@tshelton) know that for the past week I have been sporadically commenting on #svc2uk or sometimes #svc2c (Silicon Valley comes to Cambridge). Last week was my third time joining this trip, organized again by the fabulous Sherry Coutu (@scoutu) and Reid Hoffman (@quixotic). 4 days and series of events that puts us in touch with 2200 people in London and Cambridge from government to industry to education... it is truly an amazing experience. As Teamly founder and CEO Scott Allison (@scott_allison) tweeted:

What makes #svc2c special: the accessibility and willingness to help of the experts. Quite unlike other conferences!

I think that is a key to what makes this event so special for both the folks from Silicon Valley and the UK attendees. When you look at the amazing group of people that came over (speakers list) you can understand something about how special this event is -- sitting at a table with the head of engineering for Facebook, the head of engineering for LinkedIn, senior folks from Google, the executive director of Mozilla, CEO of creative commons... and the list goes on.

A few things I learned about my follow SVc2UK attendees:

August Capital venture capitalist David Hornik (@davidhornik) has a degree in criminology from Cambridge University (and is happy he has never had to use it as an investor!)

Nancy Lublin's (@nancylublin) organization dosomething.org has motivated over 1 million kids to become active toward some social good this year.

Creative Commons CEO, investor, and all around amazing guy Joi Ito (@joi) went to the University of Chicago during the exact years I was there (he was in the physics department and I was over in philosophy...) and also didn't graduate! I told him about how I successfully completed my degree 25 years late (class of 2009, yeah!) and he is now going to try as well...

Google's Megan Smith told us that Google is spending $140 million this year alone on socially relevant activities through their non-profit arm google.org

Other funny moments and quotes:

Megan Smith at NESTA's "Big Data" discussion "Get your data online and don't get caught in the PDF ghetto!"

UK Minister Willetts supporting more open immigration policy: "More than half of new tech from Silicon Valley were built by people not born in US"

Reid Hoffman: "Trust relationships between people are key to how business is done"

Also Reid: "'A startup is like throwing yourself off a cliff & build a plane on the way down"

And one last one from Reid: "Work fast to solve the hardest problem first. Because if you can't solve it, you need to pivot"

Other great links:

Mozilla Exec Director (and now Greylock VC John Lilly's Talk at the House of Commons

Mark Littlewood of BLN blogged the panel about what the world will look like "If my company is massively successful..."

NESTA put up videos of a bunch of the speakers...

The Telegraph's Milo Yiannopoulis (@nero) "Cambridge starts taking the internet seriously"

Looking forward to next year!!

Five Modalities Model of Community Development

2010-11-10T15:52:00.000-08:00

When considering community development as a part of marketing activities, corporations often forget the most basic requirements of inter-dependency and value creation. In 1986, researchers McMillan and Chavis wrote about defining a sense of community that it must have the following elements:

1) membership, 2) influence, 3) integration and fulfillment of needs, and 4) shared emotional connection.

Too often companies simply believe that a "community" is a cluster of people who expressed interest in their products or services, and that this can constitute a sufficient connection to continue to communicate AT these people.

Instead, companies must consider how they can bring value to the people of a community, not just expect value from those people. We have identified five core ways that companies can bring value to people and can develop this sense of membership, influence, integration, and sharing that is crucial in community formation. The first two, the easiest and most common, only allow a company to earn attention, even when they are accomplished in a context of "co-creation." But the other three modalities are much more powerful and can form the basis of a long-lasting relationship for a company with its customers and prospects.

These five approaches can be used both when a company elects to create its own community and when it engages with existing communities. While we have developed the use of these approaches in online environments, they are as valuable to consider when engaging in the physical world.

ATTENTION
There are two modalities useful in earning the attention of an audience, we call them "entertain" and "inform" although often (as with all five) they can be used in concert. The better the content, the more valuable it will be to an audience member, and the more likely it will be to result in some sort of response -- whether it is through sharing (passing the company's message to one's social graph) or through co-creation. A "better" content will be one that is in itself more entertaining or more informative, but also one that is more tuned to the needs of the people consuming the content as opposed to the desires of the company to achieve some transaction.

INFORM -- In its most basic sense, informing communications are ones that help educate people about something whether it be a product, service, or the problem that such product or service addresses. For example, a company that sells do-it-yourself home repair supplies might simply advertise the low price of lumber available at their store. While this would be a form of "information" it is of transitive value and only relevant to those immediately in need of the particular goods on sale. Instead such a company could construct a website answering questions about how best to do various repair or construction projects. How, for example, to use that lumber to build a treehouse.

ENTERTAIN -- Getting people to laugh has been a mainstay of advertising since virtually the first commercial messages were distributed. Whether as humor, spectacle, or narrative the notion that an advertising message can be coupled with some kind of entertaining content is well worn and works in the social space as readily as in other mediums. Finding those opportunities to create an entertaining envelope for your ad message which is also adopted by a community is somewhat more difficult than the onanistic pleasure we get from a good commercial on primetime TV. But a number of simple mechanisms are evolving.

ENGAGEMENT

But far more interesting than merely using this new social "channel" to recapitulate the attention models of old marketing, social technologies provide the opportunity to shift the model -- from one in which you as the marketer are seeking an audience, to one in which interested parties find you. This reversal is truly the core of understanding the current marketing revolution and why the old mechanisms will continue to decline in effectiveness while a new science of market engagement is needed.

The new engagement modalities provide a circumstance for a relationship to develop between a company and its customers (or prospects). Broadly speaking there are three possibilities:

SUPPORT -- Facilitating the customer's experience of a product or service, typically by hosting an open collaborative space for customers to interact with each other. This can be moderated, mediated, or merely contributed to by the company with the objective in any such participation being to enhance the quality and credibility of the discussions. So for example, providing more accurate information is good, deleting an accurate (though negative) comments is bad...

CONNECT -- Helping members of your market connect with one another hopefully toward some purpose that is related to the company's product or service. This can be as simple as hosting content and community on related topics or as sophisticated as providing a matching system that allows participants to identify themselves to others with compatible interests or objectives.

COLLABORATE -- Truly the most powerful of the engagement modalities, when you can collaborate with your market, or at least help them to collaborate with one another, you provide the greatest (and most lasting value). As with any of these approaches, it is more powerful when directly related to the company's products or services, but this is also a place where "corporate social responsibility" elements often can appear.

These five approaches to building community should be used in combination, and the "devil is in the details" in getting the right strategy and execution. But this brief outline is at least a useful filter to apply to your organization's social activities and a useful starting point to ask questions about whether your current strategy is right or whether it is time for some new thinking. If the latter, let us know as we'd love to help -- Open-First.

The More You Give The More You Get

2010-08-24T14:31:00.001-07:00

Last week I had an opportunity to present one of our client projects at the Social Fresh conference in Charlotte, N.C. (Slides below). One particular item that came out of this project (slide 17 if you want to jump ahead) is worth exploring in more detail because I think that it illustrates a general principle of networked systems, what I'll call "The More You Give The More You Get."

For this project we needed to contact a large number of food bloggers and explain this crazy idea we had to publish a cookbook filled with appetizers, entrees, deserts, and snacks that use "brain healthy" foods. The result by the way is beautiful, the ThinkFood Cookbook. In the course of talking to hundreds of food bloggers we contacted some who had an enormous number of regular readers all the way to bloggers who had virtually no readers but we liked their style and recipes.

In communicating with all of these different bloggers we started to see this fascinating corollary which ran contrary to our expectations. We had thought that the bigger the blogger (in terms of readers) the less likely they would be to want to participate in our project. Whereas we thought that small bloggers would jump at the chance to participate in a high profile project which might bring them new readers.

The opposite was true.

The larger the readership, the more likely the response was positive! And even when the answer wasn't a "YES" the response was always positive and supportive. By contrast the most vitriolic "NO" emails that we got were from bloggers with the smallest readerships. Like this one (no need to give the person's name)

"You want us to provide you with free content in exchange for exposure? Do *you* work for free? No thanks."

Well yes, unnamed blogger, I do often work for "free" if by "free" you mean without compensation in the form of sovereign currency immediately exchanged for my labor. But I also recognize that when I work for "free" that the exposure IS a form of compensation. And that through the exposure I am likely to trigger a variety of network effects that will pay dividends in the future.

And so I put this question to you to research -- is it the lack of relative success in blogging that makes these people who don't want to give so unfriendly? Or is it their unwillingness to give (and unfriendliness) that makes them unsuccessful?

My guess is that there is a connection between being willing to freely give in a networked economy, and the success one achieves through that network -- that the more you give, the more you get.

Here are my slides:

Community Engagement Fundamentals

View more presentations from Ted Shelton.

Inaugural Techonomy Conference

2010-08-02T01:29:00.000-07:00

This coming week we will see the birth of Techonomy a new conference and a new organization dedicated to one of the most important things we do as a species -- the exchange of ideas in search of collaborative engagement that takes those ideas further... what Matt Ridley recently called at TED Global "ideas having sex." Techonomy, like TED, brings together an amazing group of the top thinkers in the world, people like Bill Gates and Dean Kamen who are making substantive contributions to the improvement of our planet and species. But unlike TED, the founders of Techonomy are on a mission. From their website:

...here is what techonomy promotes: a rational, optimistic, forward-looking, technically savvy work ethic that celebrates technological achievement, human ingenuity, and sustainable living.

Technomic thinking -- understanding the relationship between technology and economy -- is key to the way in which our economy will develop in the 21st century. The pace of innovation, driven in this generation by the computer chip, now greatly exceeds the capacity for our linear human experience (and institutions) to comprehend. When we look at the problems we have today and calculate in 19th or 20th century terms the length of time it will take to solve these issues, we miss the profound change that the computation economy brings to our civilization.

As I prepare to travel to the Techonomy conference, I am reading and thinking about the recent Harvard Business Review blog post by Umair Haque, "Three To-Do's (And To-Don'ts) of 21st Century Strategy." In this compelling post, Umair begins his thoughts with a welcome:

Welcome, finally, to...today. The 20th century ended a decade ago, but the 21st century never began...

He goes on to explore a set of social dynamics that, he suggests, business needs to re-organize around in order to prosper in the 21st century. He identifies a strong middle class, a sustainable use of natural resources, societies which respect and protect human rights, and a need to reform the way corporations manage themselves as the key principles of the next era. To these I would add Techonomy attendee Andrew McAfee's voice and his separate HBR blog post, "IT's Three Key Organizational Transformations." He writes:

I see companies in all industries using computers to accomplish three broad and deep transformations: they're becoming more scientific, more orchestrated, and more self-organizing.

Techonomic thinking asks us to reflect on the kinds of challenges that Umair poses through the lens of technology and its capacity to transform our organizations and the very possibilities we have for solving humanity-wide problems. Andrew gives us the next few steps for how we prepare our organizations to participate in this new technology driven economy. Techonomy the conference encompasses both of these ideas and brings them together, Matt Ridley's "sex of ideas," and asks its attendees to spend the next several days working together to imagine a better world, to whose creation we can all contribute.

Welcome to today!

Rethinking Software Patents

2010-07-25T01:32:00.000-07:00

When I was at Borland at the beginning of the decade, I was amazed to discover that the company held patents for the "tab" user interface element and even the right mouse click, amongst hundreds of others. Few of these patents ever really helped the company and we had long debates internally about what to do with them, and whether there was really anything that could be done with them. Here we were, a very successful software company, inventing many new technologies, and really getting no credit (and no protection from competitors) from the software patent process. At the time I felt that software patents were probably at best a waste of time.

Well I have just had a very frustrating few months. And my experience is causing me to rethink (or maybe to think through for the first time) my position on the software patent debate.

I am coming to see some value in issuing patents to innovative young companies in order to protect them from the abusive behavior of large companies. An established company, like Borland, was capable of pursuing market opportunity through execution. But small companies are too often frozen out of the market by bigger companies. But they can also be an enormous source of innovation -- if we want to foster this innovation from small companies, shouldn't we find a way to provide them with protection?

One client I am working with right now clearly invented something four years ago that a number of large companies have now studied and learned from. My client applied for patent protection in 2007 and the application is slowly moving through the various government processes and will likely be issued in 2011 or 2012.

But in the technology world 5 years is a lifetime. And in those 5 years a dozen companies have now taken this startup's invention and implemented their own versions.

There is one particularly egregious example of a large tech company that asked the startup for a version of the software for testing back in 2008, spent a good deal of time actually using the product, and now has (a) shipped their own version of the technology and (b) refuses to meet with the company.

So how will my client ever recoup the time and money invested in creating the innovation in the first place? The most likely outcome sadly is to sell the patents to a specialty firm, often derisively called a "patent troll." One might look at such firms as being the worst kind of lawyers - those that create no value and just seek to take value out of other, "legitimate," businesses.

But stop for a moment and think about how the firm that enforces patents is actually doing our system a favor -- they are saying to the big company that abuses its power and steals from small companies that there WILL be a reckoning day and a price to pay for this abuse. While they keep a lot of the money from the patent infringement cases, they are at least one way for a small company to someday make something back for their innovation.

And the patent enforcement practice is byzantine at best, with numerous places for a small company to go wrong and lose their ability to effectively prosecute their case. They need someone who specializes in such knowledge to help them.

I'm afraid our world DOES need patent lawyers -- as long as big companies are willing to treat small ones with such reckless disdain.

Relentless Focus and a Data Driven Culture

2010-07-09T15:20:00.000-07:00

Wondering what Google, Facebook, Foursquare, Twitter and Zynga might have in common? Hint: something other than the creation of incredible new businesses that are enormously valuable and growing at an unbelievable pace? I have been asking myself this question and thinking about how the lessons of these five could be applied to every business. A few nights ago I had dinner with an old friend who is now a senior executive with Zynga and I put the question to him. His answer?

"Relentless Focus"

But over the course of dinner he admitted it wasn't that simple. Sure, dedication and hard work and staying on top of the right issues and opportunities was a critical factor, but how did you know what the RIGHT things are to focus on? Couldn't you just as easily fail by having a relentless focus on the wrong stuff?

Zynga is an amazing success, how amazing we can only guess until they file for an IPO though we do know they have grown to 1250 employees already and are continuing to grow fast. But my friend didn't claim that he and the other executives were just so smart that they had simply known the right things to do as they gre the company. And while he admitted that there is an element of luck, when pressed he began to talk about something very interesting, something that probably is the difference for all five of those companies. He said,

"we have one of the best data analytics guys in the world"

Why is this important? Because it represents an enormous sea change in the way business is conducted. There are companies that have truly embraced a data-driven culture, and they are rewriting the way decisions are made, issues are surfaced, and on what we should relentlessly focus on to succeed.

The hierarchical decision making process of the twentieth century promoted the best decision makers into positions of greater decision-making authority so that the smartest and most experienced (although sometimes the best political players) made the important decisions for our companies. But that isn't what happens in data driven businesses.

At a lunch with some friends on the Google campus recently one of them gestured around the Mountain View lunchroom and asked me, "do you think anyone in this room knows what our stock price is?" He went on, "most of them don't, but they do know the data on how many users are actively using their products." And people at Google relentlessly focus on this metric. Looking at "7 day actives" or how many people used your product (or feature) in the past week means that you can, each week, establish experiments and evaluate the impact that making one or another change has on usage. As has been discussed elsewhere (How Google Works infographic), virtually every search you do on Google is either part of an experiment or control group. This iterative product improvement method is well understood in web businesses because data is an inherent part of the customer experience. But the principles can be applied much more broadly.

The first task is to understand what data a given business needs to have to make better decisions. This in itself is an iterative process, with the definition of what data is valuable evolving over time. The second task is to develop the right processes to collect this critical data. Web businesses are swimming in data but often the wrong kinds, so even here there is an important job to be done which we call "incentive design." In short, how do you design your customer interactions in order to obtain the data you need to make decisions? And how do you use new social and mobile interactions to collect data you never had access to in the past.

Exposing this data inside the company is a critical step in the process -- you don't know who will need access to the data to make a decision so in a data-driven culture the company provides a powerful dashboard for all employees to explore and interrogate the data being collected. This is where the name of our company, Open-First comes from -- employees need open access to complete and accurate information in order to make good decisions. So change your culture to be open first, before you do the next step. The next step though is all about the data.

Once you have the data you can start talking about experiments that let you rapidly and inexpensively test your ideas and give you the feedback loop you need to find your focus. Andrew McAfee talks about this in his recent HBR article titled "IT's Three Key Organizational Transformations" in which he says

I see companies in all industries using computers to accomplish three broad and deep transformations: they're becoming more scientific, more orchestrated, and more self-organizing. None of these is complete yet, and I doubt that they ever will be. This is because innovation keeps opening up new opportunities to go further with orchestration, self organization, and science, and companies keep taking advantage of these opportunities.

These three elements are all critical, a scientific approach (we call our methodology PHAME) and devolved decision making (self-organizing which is at the same time coordinated (or orchestrated) results in an organization that is capable at moving at a speed that hierarchical twentieth century business is incapable of duplicating. So companies like Zynga will run circles around traditional businesses.

Your business needs this - a deep understanding of the data that you need to make decisions, the right processes for gathering that data, tools for presenting the data to your employees, and an experimental methodology for learning from the data and decisions.

And oh yeah,

Relentless Focus

Location, Location, Location

2010-06-04T11:11:00.000-07:00

Yes the joke has been made before - what has long been said about the real estate industry is now also true of the mobile industry and even of the Internet more broadly as mobile access continues to grow and eventually becomes the primary way we access the Internet. The ability to detect a user's location is changing the way we design and use applications and is already creating enormous new business opportunities. What is truly amazing is that this is only the first of a series of sensors we'll carry with us in our phones -- the "low hanging fruit" of the mobile revolution that the 2010s will bring to our society.

Here at Open-First we have been studying the emergence of the mobile paradigm and have been applying our knowledge in advising our corporate clients. The graph shown here is an important key to understanding the tremendous shift underway. It shows the first 5 quarters of user growth for the now enormously popular Twitter service, and the more recently launched Foursquare service. Both of these services can be seen as "lightweight social networks" in the sense that they provide one particular way in which people will interact, as opposed to Facebook and others that aggregate a variety of interaction modes.

But Foursquare reached 1 million users in half the time that Twitter did, even after a huge growth spurt for Twitter following the 2007 SXSW conference, largely acknowledged as the point at which the technology world "discovered" Twitter. Why has Foursquare grown so much more quickly?

In our opinion the disparate growth has everything to do with what Geoff Moore called in his famous book of the same name, "Crossing the Chasm." At the risk of losing all of the subtlety of Geoffrey's invaluable book (go buy it and read it if you haven't already) the simple explanation for how a product moves from "visionaries" to "pragmatists" is by providing some easily understood real value in the use of the product. Thus the difference in the growth rate of Twitter and Foursquare in our view was the time it took for each to establish that value.

Foursquare's advantage in this race was location. The shift is at once subtle but fundamental. Twitter is at heart a message bus, merely a facility that enables a wide range of activities. But Foursquare inherently incorporates purpose into its use. One could even say that location is a proxy for purpose -- I am in a particular place because I am doing a specific thing there. Others that come to that place are likely to be doing something similar for similar reasons. I immediately share purpose with others -- a social network of purpose will prove its value much more rapidly than a social network of interest like Twitter.

And even aside from mobile we currently have an explosion of social networks of purpose. The social buying site Groupon for example. But the other important aspect of Foursquare is the way in which it is leveraging a mobile sensor, in this case GPS for establishing location. This is important because we are about to see an explosion in the number and variety of sensors deployed in the built environment and on our bodies, generating vast new quantities of data, often into social pools (see Dr. Andreas Weigend's Social Data Revolution for more on this).

In each case, as a type of sensor is popularized, new applications (and new businesses) will emerge and because they will be tightly coupled with purpose, these applications will leap to "pragmatists" quickly and grow in importance and use quickly. What are these other sensors you ask? How about a device that accurately monitors how many calories you are burning? Or a personal pollutant sensor? Location will be extended to monitor social proximity and we'll also know more and more about an individual's activities while with others based on text, audio, and visual content collected and correlated based on content location tagging.

Our mobile phones have been turned into a global distributed sensor network. These devices will contain an increasing level of sophistication in what they are able to sense and transmit into networked database that will then overlay and correlate data from other sources. In a recent guest post for TechCrunch Robert Scoble imagines how this new world of location based services will change the way we live -- Location 2012.

And really, this is just the beginning.

My Heroes

2010-05-22T21:36:00.000-07:00

If anyone is going to save our species, it will be the brilliant scientist/inventors who are rethinking the possible and making it real. Here are three of the people you have to rank as heroes of our generation if you believe at all in innovation as the key to our survival -- Dean Kamen , Ray Kurzweil, Craig Venter

Don't tell me its impossible -Dean Kamen

If you reach 1 percent and keep doubling your growth every year, you’ll hit 100 percent in just seven years -Ray Kurzweil

A doctor can save maybe a few hundred lives in a lifetime, a researcher can save the whole world. -Craig Venter

The Computation Economy

2010-04-29T15:30:00.000-07:00

From the 18th century and for about 200 years the world was radically transformed by something we now call the industrial revolution during which substantial changes in the methods of production and the organization of human society led to exponential growth in per capita GDP, an accompanying improvement in the standard of living and longevity, and a sustained period of accretive scientific and technological innovation unmatched in any previous period of social and economic growth.

For the past 50 years or so, a variety of writers and educators have spoken of a postindustrial economy, in which economic improvement has been driven by continuing innovation and knowledge. Some have called this the "information age" or the "knowledge economy." The language is derived from an observation that value creation is increasingly driven by the information content of a product rather than by mining, refining, and assembling the raw materials (value drivers in the industrial economy).

The idea of the "knowledge economy" was explored by Peter Drucker in his 1966 book The Effective Executive in which he contrasts the manual worker and the knowledge worker as ones which work with their hands or their heads respectively.

But trying to understand the changes coming in the next hundred years through the prism of information, knowledge, or thought misses the transformation that is at the root of the change. It would be as if one tried to understand the industrial revolution by simply observing that people had raw materials, methods for making them into things, and bodies to do so.

The transformation in the industrial revolution was about the mechanization of labor -- the ability to build a machine that augmented or supplanted labor. Division of labor was a step in the process toward mechanization - a kind of mechanization in itself as it transformed work from skilled craft to unskilled repetition.

The transformation that we are in the early days of experiencing is one in which computers are augmenting or supplanting thought. Computation is eradicating the cost of communication and the cost of coordination in our social, economic, and political systems. The initial "knowledge workers" performed tasks which will be increasingly computerized just as the workers of the industrial revolution found that once production had been efficiently divided into narrow tasks, people could be replaced by machines in those processes.

And just as the industrial revolution changed what we were capable of manufacturing, so to will computation increasingly change what we are capable of thinking. Stephen Wolfram in his 2010 talk at TED gives us some glimpses of what is possible and what is coming.

The Computation Economy is rapidly replacing the Industrial Economy - computation is the true heir to industry, not information or knowledge which are merely the raw materials of the computational engines. When we look back from a vantage point of 50 or 100 years from now on the early steps of these last 50 years, the accelerating per capita GDP, increased quality of life and longevity, and the transformation of our species will be credited to a rapid doubling and redoubling of computational power. Just as in the industrial age it was through the doubling and redoubling of physical power.

Information Has NO Value

2010-04-28T21:34:00.000-07:00

Information has no intrinsic value. It is what you DO with information that creates value. Perhaps this seems obvious or even useless to point out, but if you read through this post, perhaps you'll agree that it is an important key to understanding the future (and past) of all media businesses.

When you read news about why a company will do well or poorly you might invest more intelligently and make money. You listen to music. A joke makes you laugh. Each of these is a use - make money, listen, laugh... value begins when you are doing something with or because of information, not in the information itself.

Why is this distinction important? Information business models must be evaluated in terms of what the creator (or owner anyway) can gain through uses of information and what the recipients would gain. Not from something about the information itself. And there are some important places in which the benefits for creator and recipient are aligned and some where they are at odds.

A simple example -- malfeasance by a government official is a kind of information that as long as it is secret protects the job of that official. But it is in the public interest to have this information known widely so that whatever abuse is occurring can be stopped. Creators want it private, the rest of us want it to be public.

In media businesses we assume that the interests of creators and recipients are aligned -- but this is often not the case if we dig a little bit deeper.

Value Conflict 1: Restricted vs Broad Distribution
In the news business there are stories that are more valuable for the recipient if fewer people know about them so that acting on the info is limited (info about a company which will make a stock go up or down). And some stories that are more valuable if a large number of people know about them (the description of how a computer virus is passed between computers) so that acting on the info is widespread.

But a news company's business model might not be aligned with the value for recipients. It might be skewed toward broad access (the more subscribers the higher the revenue) even when restricting access would create more value for individual subscribers. Or toward restricting access (fees for reading online articles) even though all recipients would benefit more from broad knowledge of the content.

Value Conflict 2: Immediate vs. Long Term Returns
Time frame is another important component of recognizing value conflicts. Take music for example -- on the one hand a musician would like everyone to hear his songs as this helps build awareness and appreciation for that musician over time. Doing so may lead to more attendance at concerts, use of the song in advertising, and even future sales of related products. But in order to make money from selling copies of recordings (a shorter term benefit from the music) access to the music must be restricted. For recipients easy access is essential in a world in which far more music is available than can be heard.

Value Conflict 3: Constraints Imposed by Media Format
In some cases the delivery medium confuses the value proposition. For a newspaper owner, there is a clear efficiency in bundling information of a variety of mostly unrelated types into one rolled stack of pages in a plastic bag. But for the reader this is a very inefficient model for consuming information. Why wade through section after section when looking just for job listings or sport scores?

Similarly TV with its limited bandwidth and time slots needs an executive decision process to determine which programs go into which limited time slots but this isn't at all convenient for the consumption of content. As consumers we each want to start watching when we are ready and watch the program of our choice at the time of our choosing.

Internet Deconstruction
The wonderful and horrifying thing about the Internet is that it collapses the constructs which have created value conflicts and forces us to entirely reexamine our institutions and business models that create and distribute information. The key to developing new successful models will be to analyze the ways in that value for creators and recipients of information can be aligned.

For example news organizations reporting on politics have to focus on business models which earn money through the largest number of people consuming their content because a democracy functions most efficiently when all people are aware of the issues and positions and can debate and vote on them intelligently.

Musicians could focus on creating great experiences of listening to music, and communities of listeners. Value created for listeners would then result in more loyal fans who attend more concerts and buy more non-music products and increase the likelihood of other commercial uses of the music.

What is certain is that where business models exist today in which value to the recipient is frustrated by the attempt to extract value by the information creator (or owner), the business model will be defeated by a more aligned model.

So to create value in new media business models focus on what we DO with the information.

And remember that the information in itself has no value.

Earth Day Needs More Thought

2010-04-22T13:51:00.000-07:00

Hope you are all feeling great about "earth day." Planning to turn out the lights tonight? Don't burn candles instead as the impact on the environment is MUCH worse. Not planning on driving to work? Make sure that the lost productivity doesn't wipe out the positive impact that the reduced CO2 might have. In fact just about everything we do that "feels good" about conservation really isn't going to help. Let's look at the big picture.

Average per-capita energy consumption on the planet in 2005 was 1,778 kgoe

US consumption was 7,885.9 kgoe.

So yes, US citizens per capita consume way more than the average -- although it is incorrect to say that we consume the most. Folks in the very hot places (like the United Arab Emirates) handily beat us at that game.

But let's talk about conservation -- what if we convinced US citizens on average to consume 20% less energy? We'd save something like 1577.18 kgoe per person per year. But the US is less than 5% of the population of the planet. So how much would the other 6.7 billion people have to increase their energy use to wipe out our conservation?

About 70 kgoe

That is just 20 gallons of gasoline.

So if everyone in the US reduces our energy consumption by 20% for an entire year the rest of the world can fill up their gas tanks once and wipe out all of our conservation.

Of course not everyone in the world has a car (most don't today). But the problem with conservation is that it ignores the real problem -- the rest of the world wants to live like we do. Instead of reducing energy use we need to focus on how we can increase energy use without destroying the planet and the only way is to create cheap clean energy alternatives to oil.

In fact, lets increase average global energy consumption by an order of magnitude - to 20,000 kgoe -- but with cheap clean energy.

Cheap clean energy would mean cheap clean water which would in turn allow for cheap high quality food and improved living conditions.

And lets not forget that clean energy would reduce greenhouse gasses and help us reverse global climate change.

Simple conservation won't help. Focus your energy instead on the investment in innovation that is necessary to create the power sources of the future.

Happy Earth Day

Data from EarthTrends: The Environmental Information Portal

Tax Day and Why You Should be Paying MORE

2010-04-15T15:03:00.001-07:00

Tea parties are for kids. Adults deal with the tough problems. And we have a very tough one in the US - almost $13 trillion total deficit and headed quickly up and away. Try leaving this real time debt clock as the background on your computer screen for awhile to give yourself a sense of the problem. Or just look at these facts:

The Congressional Budget Office projects that total federal revenues will be about $2.2 trillion in 2010

The Congressional Budget Office (CBO) projects that if current laws and policies remained unchanged, the federal budget would show a deficit of $1.35 trillion for fiscal year 2010

We are spending $3.55 trillion on $2.2 trillion of revenue. That is, we only earn 60% of what we spend.

That is not sustainable. Full stop.

And cutting spending won't be easy. You aren't going to take benefits away from baby boomers, not all of them anyway (not all the benefits, not all the boomers). And for the doves out there, military spending going to zero (impractical) would only cut the deficit in half.

So while we should spend less, and there are certainly lots of opportunities to do so, the only practical solution (sorry tea party kids) is to INCREASE REVENUE.

There are two ways to do this and we must do BOTH:

1. The economy (GDP) must grow.

2. Taxes must be a higher percentage of GDP.

Take a look at this chart from the revenue outlook page of the CBO's report:

Federal taxes as an average of GDP from 1970 to 2009 averaged roughly 18%. Taxes in 2009 however were just 15% of GDP a 60 year low. Tell me again what the tea party folks are complaining about? The overall federal tax on the economy as a whole is at a 60 year low! Even when including state and local taxes, the overall burden on consumers and businesses is at historic lows.

How much of a difference does that make? 2010 GDP is projected to be almost $15 trillion. An additional 3% (just to bring us back to the 30-year average) is another $450 billion in revenue. That doesn't solve the hole in the budget but does close it by 1/3.

What do we do to get the rest of the money we need? Or even start paying back the deficit? Or putting money against mounting health and retirement benefits?

First we need to invest in the growth of the economy. Growth from a $15 trillion to an $18 trillion GDP would alone (at the 18% average tax rate) add $540 billion in revenue.

But we also need to anticipate a period of higher taxes while we grow our economy (and control spending). At current spending levels we need to increase taxes by about 2% over historical average levels, to 20% of GDP.

An $18 trillion economy taxed at 20% would generate $3.6 trillion in federal revenue -- just enough to pay for current programs. Cut spending and you can pay off existing debt.

Lets put that in perspective - what are the tax rates for other countries that we might look to as a model (From the Organization for Economic Co-operation and development) Note that the US rate is shown including state and local taxes (so about 28%):

We don't have to become the highest taxed nation on the developed world (or anywhere near) in order to close this deficit problem and begin to take care of our children.

Join me in opposing the tea party and calling our representatives to ask for higher taxes!

A Tale of Two Cities

2010-03-21T08:46:00.000-07:00

Just down the Holland Park Road from London's wealthy Notting Hill neighborhood, the community around Shepherd's Bush Commons is experiencing an interesting urban juxtaposition. Not far from the old, somewhat run down shops on Uxbridge Road and the adjoining park of Shepherd's Bush Commons lies the new London Westfield Mall (in the space labeled "White City" on this Google Map).

The shops along the commons, as can be seen in this Google "streetview" photo, are the run-of-the-mill type you'll find in various modest neighborhoods. A quick walk around the park suggests that the area is primarily dominated by immigrants from the Middle East and you'll often see women in full burkas. A few homeless people and drunks are in the park which is otherwise clean and well used with many children on the play equipment.

As you progress down the road to the recently refurbished tube station (opened in 2008) suddenly a very different image of life in London appears. According to a Wikipedia article on the Shepherd's Bush station the refurbishment was paid for by Westfield. Given the way in which the tube station and the adjoining overground station match the steel and glass architecture of the Westfield London shopping mall it is easy to make the connection.

(A blog by Scott Santoro has additional photos and commentary on the mall) The mall itself is a fascinating vision of what 21st century life in London (and around the world) may increasingly look like. Steel and sheer glass replace the humble beige brick. And in this version of London Prada and Gucci replace the "Super Save." One is tempted to ask who can really afford all of this luxury but on this Sunday afternoon the shops and restaurants were packed full of bag toting shoppers. A small play area for children had far exceeded its capacity as parents entertained small kids while the shopping went on.

The many contrasts in so small a physical space seemed accentuated to me by the way in which the mall is entirely cut off from the original neighborhood. The greenery on the photo above covers a high wall that serves as a solid barricade between middle and lower class apartments and the glitz of the mall. One could arrive by the underground or overground station, walk into the mall, and never realize that another London is just on the other side of this shrubbery.

Which is perhaps the point. People in the new London don't really want to be a part of the old London. This particular architectural contrast shows how there is a wide gap between the two, a gap that has always been a part of society. But a gap that is now defining itself in an architectural language which at once announces and embodies both the future and the past -- a future of clean bright spaces made of shiny materials and the past of ongoing segregation by economic class.

At least in Notting Hill there is a continuity between one neighborhood and the next. In the futurism of Westfield there is a complete break from the existing community. To be fair, the idea of the mall has evolved over time all over the world as a kind of tiny city which ignore the existing landscape in which they are placed, forming their own islands of commerce. But I wonder if one squints just a bit whether the London Westfield isn't just a mall but also a look at how urban planners will be rethinking entire communities (exclusively for the wealthy) in the decades ahead.

If so, we should begin to worry about how this visual and physical segregation of western society will exasperate the many social problems which we already are experiencing, and whether our architects and urban planners ought to think more about how to create connections and continuity between old and new.

The Strategic Use of Social Data

2010-03-13T10:08:00.000-08:00

There is a tidal wave coming, or as my friend and colleague Andreas Weigend likes to say, a "Social Data Revolution." I like the metaphor of the tidal wave because it evokes the image of a force of nature that cannot be stopped whereas "revolution" might fail or be reversed by "counter-revolution." And I don't think the change coming can be stopped or reversed.

In the past few weeks since attending a fabulous workshop in Zurich hosted by the Gottlieb Duttweiler Institute I have been even more attuned to the emerging corporate practices in which social data is informing decision making processes. A few examples:

A retailer checking to see if your email address is active on a range of social networks as a way of deciding whether or not to clear your online order

A credit card company that has realized that customers who have extensive and long standing LinkedIn profiles are significantly less likely to default on their credit cards

An insurance company that is making decisions about which insurance claims to further investigate based on the social graph of the claimant

An enterprise IT equipment company that has modified its sales lead scoring algorithm to include a variety of factors from activity in social networks and social media

An appliance manufacturing company that has reduced the delay in knowing that they have a product defect issue by two months by monitoring online conversation rather than waiting for data from their field repair organization

The list goes on. Companies of all kinds, in every industry and region, are discovering that there is an enormous pool of information -- call it social data -- that is being created at an every increasing pace from which they can learn more, and make better decisions more quickly.

This trend will only accelerate with advanced mobile technologies. Every individual now has the capability of being a "sensor" in their physical environment, recording and transmitting physical data (location, speed, etc) but also behavioral and emotional data. When people walk into a particular store, say Starbucks, are they happier than before they walked in? How does that one store's data compare to other stores in the area?

AMBIENT INFORMATION MEETS BUSINESS INTELLIGENCE
For the past ten years we have been building out a network of sensors in roadways that can transmit data about the speed of passing vehicles and allow us to aggregate that data into a visualization (typically a map) to help us decide which roads we should choose to get from point A to point B. This is an example of data-driven decision making with which we have all become familiar.

Now every person is a "sensor" and is using their computer or mobile phone to transmit information into public (and private) databases. Businesses must learn how to build the analytical models and visualization tools to give their employees the equivalent of a map in order to comprehend this information and use it to make better decisions.

The companies that utilize these tools effectively in their industries will have an enormous strategic advantage over their competitors. The time to join the tidal wave or revolution is now.

The next Facebook

2010-03-06T20:35:00.000-08:00

Randall Stross offers some useful insights on Facebook and on the phenomena of the "network effect" in his latest NY Times article, "Getting older without getting old." But he misses the easy one when he writes

Industry watchers constantly scan the horizon for a challenger that could displace Facebook...

The most interesting thing which we should all reflect on in our businesses is the rapid emergence of Facebook from nothing to 50 million users in 2007 to over 400 million in early 2010... and how a bunch of kids have rapidly transformed the business landscape with an idea backed by a little bit of software and the Internet. And how this is happening over and over again in every industry.

The "next facebook" is the wrong question to ask. We should be asking, what is the idea that is going to blow up all of our own preconceived notions of the way our market/industry works and how can the "network effect" be used to create the next amazing transformation? What should you be doing right this minute to change the way your company is connecting with customers, creating value in the marketplace, and changing the way business gets done?

The "next facebook" will almost certainly not be anything like facebook - it will be a new insight into the way in which the Internet removes barriers to our collaborating and co-creating meaning in our world.

The next tech boom

2010-01-05T20:33:00.000-08:00

OK folks - here it is, the official announcement -- GAME ON! I have been saying for awhile now that the tech industry is in expansion mode again and that 2010 is gooing to be an explosive growth year leading to another long expansion, one that will surpass even the great Internet boom of the late '90s / early 00s (read on for why). Today I have validation.

Perhaps you don't think this validation is legitimate - much to your own sorrow when you miss the boom (or are just late to the party). But I am talking about man on the street validation. Here in San Francisco today I overhead not once, not twice, but three times today different conversations in which people were talking about tech companies in growth mode.

The last of these three was when I was walking to the Montgomery BART (very close to our offices at 2nd and Mission) and overhead two real estate people in their nice real estate suits talking outside a building. The one said to the other "oh yes, I think they will take the space at that price -- I am seeing a lot of action right now from tech companies, they all seem to be growing."

For me this is validation of a trend I was already seeing shape up for 2010 -- the coming year of mobile. And yes, I do think that Mary Meeker called it right in her annual address to the faithful at the Web 2.0 Summit. "Mobile Internet Usage Is and Will Be Bigger than Most Think" which will lead to a dozen NEW companies of enormous size and value over the next decade...

But that isn't the only story. There will be a dozen tech IPOs in the first half of 2010, breathing life into the whole investment supply chain and creating a huge new cohort of want-to-be tech companies. Sure, some will be life sciences and some will be cleantech and energy innovation. But my money is on the mobile Internet.

Apple, Google, Nokia, Samsung, and (go down the list) not to mention Vodafone, AT&T, (another list), and all their suppliers have realized that there is an enormous new business that is being created -- a whole new range of consumer experiences that will be enabled by the combination of (1) mobile; (2) cloud computing; (3) social technologies. Everything we do as citizens, as consumers, as businesses is about to be transformed.

Prepare for take off!

A Skype Only Home

2009-11-14T11:18:00.000-08:00

Seven years ago when we bought and remodeled a home in the Berkeley hills we had to strip every wire connecting our structure to the world -- power, telephone, and cable. We had to pay the power company and the phone company to come by and do the disconnect, but not Comcast. When I asked the Comcast technician how much it would cost for the disconnect he said, "oh, disconnecting is free -- we soak you when you are ready to reconnect!" And with a smile he was off.

I smiled too at the time because we don't have or want television in our home and we were perfectly happy getting our Internet connection from the phone company. So I had no intention of every calling Comcast again. But a few weekends ago a truck coming up our street hit our telephone line and ripped it out of the house. After calling AT&T and finding out that it would be a few days before they could send a crew out to reconnect we decided to call Comcast and ask how fast they could come out. Both companies said they would send technicians in three days (the Comcast truck would come the day after AT&T came) so we decided to go ahead and have them both come out and connect.

And boy are we glad! AT&T still hasn't sent a crew to reconnect our house!! So for the past few weeks we have been using Comcast for our Internet connection and we've been using Skype for our phone. We just bought a WiFi Skype phone and it is terrific. This week we called AT&T and cancelled our account.

Yes we know about the 911 issue. But if AT&T can't (or won't) connect our house, what are we supposed to do? And anyway I think I'd rather have Skype getting our money than AT&T. It was quite eye opening to see how much cheaper it is once you also consider free voice mail, free caller ID, cheaper International calls... nope, we don't miss AT&T at all.

Geoffrey Moore on Innovation: Video

2009-11-13T13:07:00.000-08:00

At the end of last month, on October 27th and 28th in London, TCG helped the Symbian Foundation host a conference on the future of mobile. Almost 3,000 people attended this dynamic event, held at the Earl's Court exhibition center. On the second day of the event Geoffrey Moore spoke to the audience about what Symbian should be doing and how Nokia and the other members should be participating in and benefiting from the Symbian Foundation. The slides and a video of his presentation are now available. Geoff makes an excellent set of observations useful for every company about the role of innovation in your business and what you need to be doing to compete:

Geoff Moore at SEE

View more presentations from tshelton.

Geoffrey Moore at Symbian Exchange and Exposition from Ted Shelton on Vimeo.

The Geek Shall Inherit the Earth

2009-11-04T13:54:00.000-08:00

I was speaking with someone last night who was attending the Enterprise 2.0 conference in San Francisco who was complaining about how Microsoft has managed to achieve remarkable success with their SharePoint product despite being inferior to start ups like Jive. He then asked if I was attending E2 to which I blithely replied "no, I don't really care about the technology wars." Which is true but incomplete. The more complete answer would have been, "technology is merely the medium we move through in order to get the really interesting things done."

And technology is increasingly a ubiquitous and all encompassing medium.

If businesses were people, technology would be the air they breath. Communications, data collection, decision making systems, etc -- everything a company does is mediated by some kind of technology and this is only accelerating. As more and more information is collected the need for systems which help us use this information become ever more essential.

The most effective companies will be the ones that have the most effective information systems. So I am really not worried about Microsoft wasting people's money with SharePoint -- the companies that use that technology will suffer the consequences. And the businesses that understand the geek-centric reality of 21st century business will succeed. Over time companies like Google, Amazon, and Akamai will teach us to use really good technology to build our businesses. Even Microsoft is beginning to understand -- how do you think Bing works? On Linux servers run by Akamai of course.

So I won't bother with "enterprise 2.0" which has become a writhing pit of technology vendors trying to insult our intelligence with ridiculous claims about their products, and instead I will continue to focus on real business problems and their solutions, safe in knowing that ultimately the best technology will win out because it will create the most value for the smartest companies -- that is, the geek shall inherit the earth.

Will Your Tribe Change The World

2009-10-22T10:28:00.000-07:00

Watch this TED talk video of David Logan on tribal leadership and then look around your own organization. What stage are you and your co-workers operating at? Stage 2 where you hate the world? Or "stabilizing at Stage four", like Zappos? Or are you at Stage 5 and changing the world? And what can you do to move your organization up this ladder?

Tribes are a critical organizational model that we naturally adopt, whether explicitly or implicitly, in our interactions with others. Understanding tribal behavior and working more directly on improving our tribes is key to developing high performance organizations. And if David Logan is right, it might also be the key to changing the world.

Ambient Awareness meets Business Intelligence

2009-10-13T01:58:00.000-07:00

Clive Thompson in a 2008 NY Times Magazine article reported on how "ambient awareness" is enriching our social lives as we have instant access to more and more real time information about our friends and colleagues I'm so Digitally Close to You). The rapid increase in the number of information sources, the speed new information is being generated, and the quantity of information available is equally impacting business processes from product development to marketing to customer service. In my consulting work this is one of the key technology shifts that I see companies struggling with as they re-examine how data is gathered to support decision making. Redesigning business processes to incorporate business intelligence from ambient sources will be a key part of redesigning companies over the next decade.

(This blog post is an excerpt from a long white paper that I am currently writing which I will post in its entirety when complete)

The term ambient intelligence (or AmI) was, according to Wikipedia, first used by Brian Epstein of Palo Alto Ventures in 1998 in a workshop for Philips on the future of consumer electronics. The world they and others began to describe had a set of key technology trends that together created a fundamental shift in the way we interact with the physical world including miniaturization, wireless communications, software platforms for distributed systems, improved human-computer interfaces, the general robustness of autonomous systems and a continuing reduction in cost for the deployment and maintenance of such systems

These researchers envisioned a world that by 2020 thoroughly connected people with their environments as sensors, transmitters and other devices became increasingly inexpensive to deploy, easier to program, and more connected. Ambient information systems can be generalized as following this common pattern: (1) the translation of the inherent information in our environment, such as the speed of passing traffic, into digital information via a sensor; (2) the transmission of this data through a computer network; (3) use and presentation of this data by a human or machine process (for example, traffic statistics super-imposed over an online map). I'll use the term "lens" to denote any system which is aggregating, analyzing, and presenting this data.

A simple example of this can be seen in the automated toll systems now in use in many western countries. A small transmitter placed in an automobile uniquely identifies the vehicle to a toll sensor, allowing the driver to be automatically charged a use fee as he drives past some fixed point on the roadway. In this case the lens is a machine process designed to associate the location of a specific vehicle with a financial transaction to be processed against a specific driver's account.

Augmented reality systems currently in their first consumer deployments through mobile phones also offer a glimpse at the human side of this coming world of ubiquitous information-rich interactions. The combination of a set of sensors including a digital camera, GPS, and a compass into a portable device with Internet connectivity allows information about an individual's environment to be retrieved as he moves from one place to another. Here the lens is a visual human-computer interface made possible through the video display of the digital device.

In just the same way that the physical world can be instrumented, detected, and thus better understood we can also instrument the virtual environments in which we are now increasingly communicating and conducting business. As Thompson points out, the innovation of Facebook's "news feed" in 2006 was not in the creation of new information but in the way that information was surfaced to Facebook users.

Facebook had already created a system in which inherent information about people's activities ("Tim and Lisa broke up") was being captured through the human sensor network of its users. The news feed suddenly provided a lens through which one could consume all of this information easily, providing users with a tool for comprehending larger quantities of data and presumable making decisions (I guess I should call Tim or Lisa...) and, as Thompson reports, startling and upsetting people who hadn't thought through the implications of putting this information online.

In the same way the inherent information in our business environments is increasingly being collected and stored online. Past Amazon CTO Andreas Weigend enjoys pointing out to clients that "more information will be created and stored this year than in every prior year in human history." Businesses must implement the right sensors for collecting and transmitting and the right lenses for aggregating, analyzing, and presenting this information.

For example, for a B2B client we recently added online social profiles to the set of information that sales people have about prospects as they try to follow up on initial product inquiries. Having more information available about that particular individual measurably increases the likelihood that the sales person can reach a prospect and have a meaningful conversation. But almost as important is how this information is informing the process of deciding who to contact in the first place.

Sophisticated sales organizations have long implemented "scoring" mechanisms for trying to decide who their most interesting potential prospects are within a given list. A weakness in these systems is that much of the information used for such scores is self-reported by the prospects (size of company, title, industry group, etc). Thus the ambient intelligence about these prospects -- the data they are creating all of the time as the use various online services -- can be significantly more useful in assessing the relative value of one prospect versus another.

Another example, marketing organizations are increasingly aware of the vast number of customers talking about their companies and products. Communications teams are establishing "listening posts" (sensor networks) to aggregate this information. Too often this information stops at an evaluation of "influencers" who can then be targeted for media campaigns. We have helped organizations recognize that key product insights, support issues, and other business processes can be informed by the collection of this ambient intelligence from the marketplace.

These are a set of ideas which we are only just beginning to understand about how business will change over the coming decade. When researchers began to define ambient intelligence a decade ago, they envisioned "...a world in 2020 where user-friendly devices support ubiquitous information, communication and entertainment." We can now see that the same technology trends impacting consumer products will also radically transform business processes and decision making. The most advanced companies have already begun using sensors to collect relevant information from their environments and are developing lenses to use this information in their activities. The development of these systems will be critical to competitiveness in the 21st century.

The Social Web's impact on Management Theory

2009-09-28T10:32:00.000-07:00

An increasing number of people are talking about how social technologies -- social media, social networks, collaboration, reviews, crowd sourcing, etc -- are impacting our understanding of how organizations should be structured and how employees should be recruited, managed, and rewarded. On Wednesday of last week I presented an initial paper in London on this subject, based on my work with companies over the past decade or so: Open Management (opens PDF on Scribd website).

The last 10 years? Yes, in May of 2000 I joined Borland as its Chief Strategy Officer and had the pleasure of working with Doc Searls (one of the four authors of the Cluetrain Manifesto) who was working as a consultant to the company. Borland had decided to develop an open source development tools product, (Kylix for those of you who might wonder) and Doc had been retained to help the company understand the Linux "community" whatever that was!

As a technology firm working with software developers Borland already had a long history of using online forums to connect with customers. But I think it is fair to say that the experience of bringing a Linux product to market significantly increased our awareness of a new dynamic between companies and their markets. This has led me on a decade long exploration of social media, social networks, and a variety of other tools which I broadly group together under the name "social technologies." Social, not because it they are about fun but because they are about people doing things with other people. In other words, social as in sociology.

And organizations, especially corporations, are one of the most interesting places to study human social behavior. For generations now we have relied upon hierarchical structures to facilitate the coordination required for large numbers of people to act together. Now technology is offering an alternative to hierarchy, one which is proving to offer significant competitive advantages to early adopters, open source being one clear example.

In taking "open" as my label for this movement I seek to focus on the difference emerging from our twentieth century business constructs. All business is "social" -- but the 21st century will see an increasing number of open business models -- open management, open communications, open source, open support, open product development, open research... It is a great time to rethink assumptions and consider alternatives to everything we know in business!

Airline choice from SFO to LHR?

2009-09-28T09:20:00.000-07:00

So you are a United Mileage Plus member -- maybe a premier exec or even a 1K flyer. You are trying to decide, who would be best for my next trip from San Francisco to London? United of course!? I'd like to explain how I came to the conclusion that Virgin Atlantic was a better choice, and I don't care how many miles you have on United Airlines (oh, OK maybe you are "global services" in which case... I don't know).

First - something about my survey methodology. I have been doing a project in London for the past 6 months that has required me to be in London twice a month (that is 12 trips, for those of you keeping track). I have been flying on United Airlines for a very long time. My Mileage Plus account was opened in 1990 and I currently have well over 1 million miles flown over those almost 20 years. This year alone, mostly from all those trips to London, I have flown well over 150,000 miles with the airline.

Like most frequent flyers I rely on miles to make my travel more pleasant. Once in awhile I spend those 10 hours in "economy" (or coach, or chose your euphemism - I like cattle class). But once you have flown a couple of times you start to have the option of "upgrading" -- space available. And as you climb in status your chances of being upgraded improve. So as a million mile, 1K traveller on United my chances should be pretty good. And I am happy to say that United has upgraded me on most of my flights over the past 6 months (thank you).

But a number of service issues with United Airlines recently made me ask, is there a better airline to fly to London on? And so I begin to investigate my alternatives. I just flew for the first time on Virgin Atlantic - more about the actual experience in a moment. But the real surprise was the economics!

Here are the numbers -- am pulling an arbitrary travel date in the future, more than one month ahead. Fly to London from San Francisco on Sunday November 15th and returning on Sunday November 22nd (that crucial Saturday stay over).

$3,006.20 is the lowest economy fare United is offering which will allow for an upgrade to business class using miles

$1,517.00 is the lowest PREMIUM ECONOMY seat that Virgin Atlantic is offering

Now what, you might ask, is the difference between Business on United and Premium Economy on Virgin? That was my question as well, so I decided to go ahead and book a Premium Economy seat and see for myself.

UNITED BUSINESS vs. VIRGIN PREMIUM ECONOMY

(1) The Virgin seats are closer together meaning offering less leg room and not reclining as much. But they are still quite comfortable and I was able to sleep for 6 hours of the flight.

(2) Virgin's 747 has 8 seats across in premium economy instead of United's 777 configuration with 7 business seats across meaning that the seats are a bit narrower - not a problem unless you are larger than average.

(3) Virgin's food service was good but one could argue that United's is better. My experience ordering a special meal was better on Virgin -- on United the flight attendants actually apologize for the special meals being disgusting.

(4) Virgin's flight attendants were great -- United has a mixed bag of some terrific people and a few rotten eggs. Even the other flight attendants on United know who those terrible ones are but say that United can't get rid of them because of the union

Result: Even if you were guaranteed an upgrade by United (which they definitely do not guarantee) you would have a comparable experience between premium economy on Virgin and a business seat on United -- for half the price!

And if there was a chance of being stuck in United Economy, there is no question -- fly Virgin Atlantic.

To me, all of this simply points to United Airlines being completely broken as a company. I am sure this same analysis could be done for many of their other routes. This will be a continuing spiral down into failure for UAL until they are able to entirely reinvent their company.

First suggestion:

Create a facility through which your passengers can log a complaint about a particular flight attendant. Negotiate with the union for some procedure by which after a certain number of complaints and warnings that you can terminate that flight attendant for cause.

United Mileage Plus members are ready to make more suggestions and pitch in but first you have to be willing to change. Can we all get behind a movement to fix United?

In the meantime I am going to keep flying Virgin Atlantic.

Ted Kennedy & Ted Shelton

2009-08-27T02:08:00.000-07:00

Now I have another reason to be sad that an era has come to an end with the passing of Edward Kennedy. My mother writes:

Are you aware that you were named after Ted Kennedy?

She explains that my father wanted to name me Edward while she preferred the name Jeffrey. But she was convinced when he explained that his choice of Edward was not about him (although that was his middle name) but that my name would be after Edward Kennedy - called Ted... and she even gave me a middle name with the initial M since his name was Edward M. Kennedy. And that was how I became Edward M. Shelton but have, since birth, been called simply "Ted." And now back to your regularly scheduled programming.

What is RESPKT?

2009-07-31T10:50:00.000-07:00

Some of you have asked me about the RESPKT widget on the right side of my blog page so I thought I'd write a short note introducing this experimental service...

"R E S P K T, Find out what it means to me..."
-Aretha Franklin

Some friends (Chick Markley and Doug March) and I have created RESPKT and the widget is a part of the service and a part of a broader idea for lightweight distributed trust and reputation systems.

The basic problem is this --> how can you decide whether a person you don't know is interesting, trustworthy, or expert in a given topic? Social networks (facebook, linkedin, twitter) give us one view into this -- connections, followers, and (in the case of LinkedIn) recommendations tell us at least who knows a given person. But this is an imperfect indicator since the reasons that a connection or a follow exist are quite varied and may not indicate interestingness, trustworthiness, or expertise. And LinkedIn's recommendations are limited in number and scope.

So RESPKT seeks to provide a solution (initially for Twitter only). The idea is to allow anyone to express explicit respect for anyone else and to track and distribute the results. By tracking who is getting respkt over time and who they are getting it from, we can do a much better job at helping you to make that decision about whether someone is interesting, trustworthy, or expert...

Five Ideas That Matter

2009-07-20T11:00:00.000-07:00

While TCG partner Haydn Shaughnessy has kindly attributed co-author status to me, I can hardly say that I did more than a few edits and act as a sounding board for this terrific essay - "Five Ideas That Matter" (link opens the document on Scribd) in which he introduces the idea of metatrends. Here I have reproduced the introduction in the hopes that this may intrigue you and you'll follow the link to read the whole paper:

"As the first decade of the 21st century comes to a close it’s clear that there are profound changes underway in the systems that govern and condition our lives.

The World Wide Web offers an opportunity to uncover where people's ideas and sentiments are headed and what they think about those changes. Never before have we had instant access to 8 billion pages worth of thoughts, ideas, or belief. The trouble is, as designer Matt Webb recently remarked, we have already passed the point where our attention can keep track of what is knowable and memorable. We need more shorthand.

This document is a deliberately brief guide to ideas on the web. In it we put forward a new research methodology and conceptual framework for dealing with the web’s data stream – the METATREND. Metatrends are, we hope, a shorthand for understanding change - as perceived by many millions of people.

A Metatrend is a trend that is parsed through the prism of web opinion and attitude. In place of a guru’s vision of we propose subjecting expert analysis and trend watching to social dialogue.

What we present is a first approach to seeing trends through the eyes of people who routinely blog, comment, tweet and search the web.

Why bother? Apart from the desirability of understanding large-scale opinion, in a parallel project The Conversation Group is witnessing increased interest in ideas such as creative destruction and system renewal, indications that people are seeking a new description for their experience and aspirations.

That search should be central to the business planning of any company or Government because it represents a changing mindset, and a new approach to production and marketing, of products, services and ideas.

Here we've had our first go at defining one element of that change. It's an ongoing project. Eventually we hope the project will help leaders, corporate and political, to create the messages, product and policies that respond to what people are seeking."

Continue reading "Five Ideas That Matter"

Google Android in iPhone territory

2009-07-01T02:26:00.000-07:00

TCG researchers took a close look at the launch of the first Android phone last year as a sample case of using social media as a market research tool. The results are now up as a white paper: "Surviving  in  iPhone  Territory" (warning PDF direct download link).

Our team examined 93,228 relevant & unique posts referencing the first Android phone, the G1, on English language blogs. This sounds like a lot but it was vastly overshadowed by ongoing conversation about Apple's iPhone.

There are some important lessons here for what companies need to do when they participate in social media, especially when a competitor's brand is already dominant in the conversation. Despite the size of Google and their relative sophistication, this is not a story of social media success.

This is also a great example of the kind of work The Conversation Group does for its clients. When we do a report like this for a paying client, we can't share it publicly. This report was done specifically so that we could share an example of our work. Let me know what you think!

One Really Big Idea

2009-05-24T08:10:00.001-07:00

As many of you who have been following my social network status updates know, I have been spending a lot of time in London. As of the beginning of May I will be spending half my time there (and half my time in Foster City, CA) -- Lee Williams, executive director of the Symbian Foundation, has asked me to serve on his leadership team in an interim management role as head of marketing.

I have accepted because I believe in the very audacious big idea which Lee has posed as a challenge to the mobile industry and more broadly to humanity:

As information technologies become increasingly important to how we define ourselves as human beings in this time and place, to what extent should we be dependent upon a commercial entity for the definition of those technologies? The idea of the Symbian Foundation is that an independent, not-for-profit organization can serve as the hub of a community of individuals and organizations and lead this coalition to developing more innovative, more compelling, more useful products in an open, level playing field where all can compete as equals.

This hasn't been the way capitalism has addressed the problem inherent in these information technologies -- that in the implementations of systems certain control points can be inserted which, while of limited or zero usefulness to the customer, have enormous commercial implications for the creators.

The two ways in which we have addressed this problem over the past 50 years were (1) applying the idea of natural monopoly and (2) through the establishment of industry standards bodies. Both are flawed. More recently a new idea has been tried, that of open source -- Linux, Apache, Mozilla, Eclipse have all offered an open option against entrenched commercial products. These organization have often attracted competing companies as sponsors where those companies saw the open source option as a way of eroding the market share of the closed proprietary solution.

But to the best of my knowledge, Symbian is the first attempt at taking this idea to an entirely new level. Symbian already achieved the goal of the dominant closed proprietary solution in the mobile marketplace -- hundreds of million of phones 70 different handsets from a wide range of manufacturers and sold by almost every mobile network operator in the world.

And Symbian achieved this through a radical innovation for the technology industry, a commercial entity that was owned and governed by the various competing companies that it sought to serve.

But for a variety of reasons the Symbian model was showing signs that it was not fast moving enough to address new challenges in the marketplace that it had largely defined. The rise of Apple with its closed proprietary operating system and device and the introduction of Google's Android both suggested that there was a need for Symbian to change and adapt and become more fleet of foot in order to address the challenges of the next stage of evolution.

Thus the creation of Symbian Foundation -- an entirely independent and non-profit organization which is posed with two challenges -- (1) release the entire Symbian operating system as an open source project and attract tens of thousands of individuals and organizations to further develop this advanced mobile OS; (2) be the hub of a technology movement and through supporting, championing, and leading this community create a more effective and open engine for innovation than competing commercial efforts could ever produce.

We are on an exciting journey, and we have a lot to prove over the coming months and years. But I believe that our mission is a crucial one -- to prevent the kind of commercial lock-in that we have seen in the past around information technologies and insure a more open and egalitarian future, not only for the companies that chose to compete in producing these products, but for all of us that use them as well.

Distrusting Emergent Behavior

2009-04-25T08:19:00.000-07:00

Yesterday my TCG partner Peter Hirshberg and I were talking about why it is that people are trustful of hierarchical organizational dynamics and distrustful of emergent organizational behavior. In the past week we had both independently encountered resistance at a client with a proposed course of action which would unleash a potential group dynamic.

I related to Peter the story in Gary Hamel's Future of Management about how the father of "modern" management techniques Frederick Winslow Taylor

in 1912... appeared in front of a congressional committee and argued that scientific management required nothing less than a mental revolution...

Hamel goes on to illustrate how different the world of the latter half of the twentieth century is from the world that Taylor was encountering as he introduced his revolutionary ideas:

Consider: in 1890 the average company in the United States had four employees, and few had more than a couple of hundred workers. Had you been alive at the time, it would have been hard to imagine that a company could ever grow to the scale of U.S. Steel...

Hamel invokes the language of Thomas Kuhn who, in his groundbreaking work on scientific method, developed the concept of "paradigm shifts" in science. Hamel sees similar mechanisms at work in management theory and practice, describing current management practitioners as "partisans of the old paradigm... members of the bureaucratic class."

While I believe this to be true, and believe that it is in part our familiarity with "the old paradigm" that makes it hard for us to accept the new, I had another thought as well this morning while listening to an insightful TED talk by Bruce Bueno de Mesquita called "Three predictions on the future of Iran, and the math to back it up." I have linked the video below and it is definitely worth watching. But the applicable insight is in the first few minutes when he talks about the complexity of human interactions.

The observation is a simple one but with some really interesting implications. Take a problem in which there are 5 decision makers. There are 120 possible interactions between those 5 people (five factorial). Any reasonably smart person can hold 120 connections in their head and can thus feel some comfort in understanding how the dynamics of five people will result in decision making.

But if you simply double the number of people to 10, you increase the number of connections to 3,628,800 (ten factorial). And 100 people? We are talking about really large numbers... There is no way for the human brain to compute the complexity of decision making within these groups, although, Bueno de Mesquita points out, this is a very good task for computers.

The implications for management methodology (and human sociology more generally) are quite interesting -- we develop hierarchical organizations in order to simplify decision making in groups, creating a sufficient efficiency for a given task or activity by limiting the number of inputs into the system or limiting the roles for inputs in order to reduce complexity.

And we grow up in our societies intensely internalizing this sense about the limits of complexity because everything we want to do requires either this notion of small groups or hierarchy which compartmentalizes the type or ability for individuals to contribute to those decisions.

But computers introduced into these systems fundamentally change what is possible in a way which is alien to our internalized understanding of how these systems work. Suddenly with the mediation of computers, significantly larger groups of peers can co-produce information, decisions, insights, etc than we have ever experienced in our non-computer-mediated past.

Understanding how the computer changes who we are as human beings and how its use changes what our societies are capable of will be an essential part of overcoming this reactionary distrust of the emergent properties of these systems.

OSU Researcher Discovers Dorks

2009-04-13T16:02:00.000-07:00

UPDATE: Aryn Karpinski is a completely nice and very reasonable person. Shame on me for being so snarky. She actually tracked me down and phoned me (and emailed me) in order to tell her side of the story. She starts "I am a doctoral student, and I am definitely not used to this kind of exposure." And goes on to say that she is completely shocked at the attention she has received for what was a side interest and really is unrelated to the primary focus of her research. "Many things I said in the interview were twisted and manipulated to sound a certain way," she says, and goes on to write in her email

The main thing to remember is that this research is correlational, which the media does not seem to understand (no surprise). I am not saying that Facebook CAUSES poor academic performance. I am saying that the research shows that there is a RELATIONSHIP between Facebook use and academic performance. There are a host of third variables that need to be examined that are potentially influencing this relationship such as personality, work, extracurricular involvement, other distractions, etc. Also, I'm sure that if it wasn't Facebook it would be another distraction. See how they twisted my words? Fun fun...

I have included the full text of her email at the bottom of my original post which I leave as an embarrassment to myself -- I should have started out by trying to reach her.

Original Post:

In brilliant news out of Ohio State University, a "doctoral student" in education at OSU has made the startling discovery that some undergraduates simply lack social skills, also known as being a "dork." In this press release issued by Ohio State (!) researcher Aryn Karpinski further observes that these dorks tend to have a very low participation in social network technologies such as Facebook.

HERE IS THE KEY STATISTIC:

The study found that 85 percent of undergraduates were Facebook users.

Tell me, anyone, why is that critical statistic left out of all of the media coverage of this idiotic study?

One level deeper - there were a total of ONLY 102 UNDERGRADUATES included in the survey. Thus, based on 87 kids with Facebook accounts, and 15 kids without Facebook accounts, and based on their own self-reported GPAs, we can now conclude that, in Aryn's words:

Facebook is a unique phenomenon. It is the equivalent of the difference between getting an A and a B.

Really? Maybe instead we should end with Aryn's own admission, courtesy of the Ohio State press release:

“For me, I think Facebook is a huge distraction,” she said.

As for the graduate students included in the survey I'll simply say Be Careful Not To Get Too Much Education :-)

Aryn's email to me, explaining her research

Mr. Shelton,

Yes! This coverage is a bit overwhelming. I am a doctoral student, and I am definitely not used to this kind of exposure.

Thanks for your interest in the research. As you can see, it has taken on a new life on the web, and I have to tell you that what was reported was sensationalized (The Sunday Times London, who breached the embargo on this research). Many things I said in the interview were twisted and manipulated to sound a certain way, as you guessed.

The main purpose of my study was to explore the demographic composition of a Facebook user at the college level. I also wanted to investigate academic achievement in relation to Facebook use. The major findings were that Facebook users were more likely younger, full-time, undergraduate, and STEM and Business majors (STEM = Statistics, Technology, Engineering, Math, and Medical). Also, Facebook users tended to spend less time in paid work per week, more hours per week in extracurricular activities, and more hours on the Internet daily (not in my poster). I did a MANOVA with Facebook and Student Status (i.e., Undergraduate vs. Graduate) as the factors, and GPA and Hours Spent Studying as the dependent variables. I found that there was not a significant interaction between FB use and student status. This was important to rule out as a confound. As you know, graduate GPAs are typically inflated meaning that it is rare to see a graduate GPA less than 3.5. It was found that there were significant differences between users and nonusers in that users had GPAs in the 3.0 - 3.5 range and also studied in the 1 to 5 hour range per week. Nonusers had GPAs in the 3.5 - 4.0 range and studied 11 to 15 hours per week. These differences were also significant in each individual population (i.e., in the separate undergraduate and graduate populations; p < .001 for both). Which, again, this is an interesting finding because graduate GPAs rarely are that low.

The main thing to remember is that this research is correlational, which the media does not seem to understand (no surprise). I am not saying that Facebook CAUSES poor academic performance. I am saying that the research shows that there is a RELATIONSHIP between Facebook use and academic performance. There are a host of third variables that need to be examined that are potentially influencing this relationship such as personality, work, extracurricular involvement, other distractions, etc. Also, I'm sure that if it wasn't Facebook it would be another distraction. See how they twisted my words? Fun fun... Also, it's not clear what it tells us even if you do find a correlation between Facebook use and grades. One could easily argue that the latter predicts the former not the other way around (i.e., those who tend to get worse grades end up spending more time on Facebook).

I am fully aware of the limitations of my study, and merely want people, personnel at universities, researchers, parents, and students to think about this intricate relationship.

A little background on the side, this is not even my dissertation topic! I decided to do this small survey study just to get impressions and explore this area. I quickly did a poster for the conference, along with reading as much literature as possible. This is not my specialization or expertise. I am really just interested in this for fun, and plan to work on this on the side. There are many more qualified professors and individuals than me to speak on this matter. I just wanted to acknowledge this and let you know that I am learning along with everyone else.

Anyways, I would love to hear your thoughts. I am presenting this at AERA on Thursday in San Diego. If I can help out with anything else, please let me know. Thank you and talk to you soon!

Sincerely,

Aryn Karpinski

I advised her to be continue to be proactive and reach out to people on twitter and on blogs to tell her side of the story -- the same advice I would give to a client of The Conversation Group caught up in a similar media maelstrom. The best way to smack down idiots like me is to be gracious, entirely reasonable and authentic, as Aryn definitely was.

London Interview

2009-04-13T09:09:00.000-07:00

The following is an edited transcription of an interview I gave to Hugh Mason in London back in January of this year. As we were talking in a bar over a few pints of beer, the transcript wasn't entirely clear -- from the background noise, not the beer! But the conversation ranges over a number of topics I have written about elsewhere about what brands need to be doing to adapt to the social marketing imperatives of our new mass connected media environment.

I have kept the back and forth format of the interview and in most cases simply deleted confusing sections rather than trying to correct them -- in a couple of cases this may seem like I am not answering Hugh's questions... and maybe I didn't :-)

Hugh Mason: OK, so it's the 4th of January. I am with Ted Shelton who is Chief Executive of The Conversation Group. Ted, people are interested in the concept of conversation. There are plenty of websites, there are plenty of blogs, there are plenty of podcasts out there talking about what conversational marketing is. Can you give us your kind of 30 second elevator pitch?

Ted Shelton: Conversation is a dynamic between members of a marketplace about the things that are important to that marketplace - so it could be two customers or it could be a customer and a member of the company, it could be a customer and an analyst, a customer and an investor, investor and... Any two participants in a marketplace can be having a conversation about something that's relevant to that market.

Hugh: So that sounds pretty conventional, so this concept of conversational marketing – why is that a new concept?

Ted: Well, actually, sorry, so I actually hate the phrase conversational marketing. The phrase conversational marketing was invented by Peter Hirshberg when we were trying to sell advertising on the Technorati website and - so the idea was, gee, we need to sell ads on this thing that aggregates conversation in a way that it's relevant to brand. The brand sponsors that aggregation and so we'll aggregate the conversation and call that conversational marketing because it creates a value for the community while drawing attention to the brand. It's not entirely a bankrupt concept but in the end, it's very stupid. In the end, it's not what brands need to do in order to be successful in engaging with their markets.

Hugh: That makes complete sense. If we can re-wind this several levels, something that I have heard you say goes back to the history of the way human beings talk to each other. That what some of the social media technologies we've suddenly become expert in the last few years is actually re-invention of something very ancient about the way the people talked to each other. Can you tell us about that?

Ted: I don't think it's a re-invention. It is a re-insertion of a persistent human pattern of behavior into the mainstream of a intention in transactions. So, if you look at transactions before the industrial world, the way in which people came to decision about a transaction they might enter into of virtually any kind was through a consultation with people who that person felt were peers or trusted. It could be that they were experts, it could be that they've had authority but those people were known to the person entering into the transaction.

It was really an interesting aberration of the 20th century that we enter into transactions based upon an intuitive sense of what our peers might want us to believe about a given product -- a sense being created by advertising. I think the way this probably can be understood best is to look back at the beginnings of advertising, for example here in England, the place where the industrial era took off. This was one of the first places where goods could be mass manufactured and sold in a region much larger than the producers had a personal reputation. The way in which a producer would reassure a customer about a product would be through say the endorsement of royalty, "this is the queen's butter." So the queen says this is good butter and even if I live miles and miles away from London, I can trust that it's good butter because the queen says it's good butter. So advertising sort of kicks off from there. You say, gee, what if I take a class of people and employ that class of people to help spread the idea that you will be sexy if you drink Budweiser or at least that you get to hang out with sexy girls. So that can create aspiration, a sense of association with a peer group that I want to participate in, and then maybe I'll buy the product.

The thing about the Internet is that, by entirely disrupting the one-way communication model of mass media, you fracture the ability of a message broadcaster to control the definition of the aspiration and so suddenly, you have all these kids talking to each other and saying "this is really stupid that the beer company says that if you drink beer you can be with sexy girls because sexy girls think that beer is stupid." The beer company is trying to manipulate you and when this becomes apparent through peer discussion the advertising becomes ridiculous.

Hugh: So the Internet is allowing us to be more authentic, more real?

Ted: It's not that we are more authentic or more real. I would argue that the internet just allows us to express our authenticity in a public form. I think a really good example of this is the way in which customer service has gone from being a private act to a public act. So when you had a problem with your cell phone provider and you called up the cell phone company, you had a private interaction with the customer service department of a cell phone company on the phone. So you might have been very authentic and very real but it was a private act of authenticity instead of a public act. Today when you have a bad experience with a company, you write about it on your blog or you twitter or in many many other ways it becomes a public knowledge.

So if you think about the way in which knowledge is shared between individuals, if lots of people have the same experience but don't have any connection to each other, you have shared separate knowledge of the experience and it doesn't ever actually provoke any of those individuals to take further action but if then you make those private acts public and so, you have shared knowledge which is then mutual knowledge so that each participant in a transaction knows that every other participant is experiencing the same problem, then you actually engage people to take things to the next step to say, well, let's organize against this cell phone company.

There are already examples where individuals might say, you know what, I'm really mad at the government but if I know this only in isolation, then I might not do anything. But when it becomes mutual knowledge that I and all of my neighbors are all mad at the government, then we might as a group of people organize to do something. That's the incredible power of the Internet that it actually takes things which could be shared knowledge but is shared private knowledge and makes them mutual knowledge.

Hugh: You've given some examples of negative experience with customer services. Are there positive experiences too, other examples that you've come across where a community working together having a conversation that might have been private but is now public and shared, has created something new, has been a positive thing? Is this always a kind of combative dynamic?

Ted: Sure like Linux. I think it's easy to come up with the examples that are well recognized examples of collaborative or collective intelligence. When you look at Wikipedia for example. Yeah, Wikipedia. So certainly the broadest known example you can - even probably more than Linux. Jimmy Wales, the founder of Wikipedia tells a great story (TED talk - Jimmy Wales on the Birth of Wikipedia) about how at one point in the evolution of Wikipedia, a group of skin heads had decided that they were going to deface pages related to African-American History. But it's very hard to keep secrets online and so people within the Wikipedia community become aware that these bad actors were trying to organize and, according to their own accounts, 20,000 skinheads were going to all descend upon Wikipedia at the same moment to try to deface the site. Of course, as Jimmy Wales says, one of the things that is always true about fringe groups is that they always think that they have 20,000 people but really actually are a couple of hundred people. But what was fascinating was that the community having been alerted to this dynamic, when the attack actually came, there was a large number of people undoing the vandalism. So these people had done enormous amount of work, hours and hours of creating false entries to defame people like Martin Luther King. They came and they had uploaded these changes and within seconds, these changes were reverted and so what took this sort of attempted organized opposition to the mainstream collectively 100s of hours to create could be undone in seconds by the broader community working together. And so that's actually I think an example of how Wikipedia rises above the possibility of vandals or bad actors. There are certainly examples where things have been created or changed that persist for days or weeks or months but ultimately, Wikipedia and mostly well functioning social communities are self moderating and so not only do they get created through the good will but they are also protected.

Hugh: Can you give us a sense in terms of if I were a brand, how does all this dynamic work? I'm thinking of some kind of established consumer brand, how does this stuff affect me. Is it purely in terms of the way I do my marketing or is there broader impact?

Ted: Well, there is a thought provoking metaphor that Jeremy Bullmore wrote about a few years ago. He wrote an article about how brands are not about the head but about the heart, and hence what people feel about the brand won't change overnight. People's definition of brand builds over time -- he likened it to a bird building a nest - a bird will take a twig here and a piece of string from there and slowly build it up and the nest becomes a very stable object which is hard to change. In the 20th century, brands and marketers could assume that most of those twigs and pieces of string were somehow under the influence of the brand -- they could buy advertising, they can control experience in a store with a product, they can influence perception through communications and so most of the touch points for the consumer building that brand nest would be influenced, if not controlled, by the brand. What's happening today as we all become media -- as the experiences that each of us have with brands are instantaneously being transmitted to our networks -- is that those twigs and those strings are coming from many-many-many more places today and they're coming from our peers. So they are coming from very powerful sources of authority, people that we respect in and can connect with. And so we are building our nest out of materials that the brand has very little control or even influence over and so it really dramatically changes the world for the marketer. The marketer now has to say, gee, it's not about how I use media as a lens through which consumers will perceive my brand but rather how do I actually enable my organization, how do I become a facilitator for my organization to have a genuine and authentic interaction with that audience that creates more compelling engagement, a more compelling sort of, if you will, sticks and straws and strings. That's the world of marketing, entirely dramatically shifting.

Hugh: I'm really interested to explore that on two levels – one in terms of what the impact for an organization that has say brand or a message and I'm also interested to understand how this kind of change in terms of communication is affecting different sectors, different demographics, even different parts of the world. You live in California a very networked place. Here in the UK, there are parts of this country still fairly well at the end of piece of string in terms of broadband, so on. Can you give us a sense of - first of all in terms of the impact or the different sectors that have seen more activity driven in a new direction because of this phenomenon, are there different demographics, are there different phases through which this is going to impact the way that brands have to change and work?

Ted: So I think – in answering your question, the first thing that I would raise is a question back to you and to people that are considering this question -- would you consider Californians an outlier and their behaviors irrelevant to the rest of the world? Or instead, are they early indicators of a behavior that is sweeping through society. I think that what we're seeing happen in the most network active places is a ground zero and that what we're seeing happen in that market is in fact going to sweep through the markets in every industry, in every demographic, in every geography throughout the world as these trends become more widespread -- because I thing the trends are driven by human nature, because they are driven by this core sociology that's wiping out this aberration of the last 50 years of controlled media. So our evolutionary traits are going to win out over that sort of temporary technological state that existed in what we called mass media.

So, as we then look at what these trends are, we say, the trends will be toward more individual participation, more expression of likes, dislikes and more collaboration within communities around both intent to purchase and actual activity - search, aggregate buying or aggregate usage. I think what we'll see is that brands that are going to remain relevant are going to have to be participatory in ways that those communities form their opinions. In order to do so, they actually have to create quality and provide value and be transparent. It will no longer work to have a crappy product. You'll be found out. Crappy products will rapidly – the news of a crappy product rapidly spreads within a community and customers will trend toward quality.

Communities often will have better information than the companies themselves and be more informed about their options and all about the pros and cons of different products. One of the things that I think is really core to our practice is going to companies and saying to them, the most important asset that you have in your company is your own employees because if your employee is doubtful about what you are doing, you need to re-examine what you are doing. If your own employees don't believe in it, then your customers are certainly not going to and when you customers become the most important proactive voice in the marketplace, for or against your value proposition, then you fundamentally have to listen to the advice of the customer in a way that today we give a lip service to but have not ever fully committed to. So your employees become the test bed, if your employees believe in what you're doing, they can then not only validate but become the megaphone to the marketplace. They can be that string for convincing - explaining to a marketplace why the proposition that you offer makes sense, is relevant to particular communities. The role of the marketer then is to really support the customers becoming champions of the value proposition that the company offers.

Hugh: So there is a change due for organizations as well. Can you talk us through what the implications are, it's not a simple question of simply buying in a technology to do a blog, buying in the technology to have a bunch of people talking to customers online on behalf of your brand, but something much more profound here. Can you just talk us through the kind of cultural changes that you've seen organizations having to make?

Ted: Blogs are really interesting for communication, they are very valuable but yes, they are just one part of a much larger communications space that companies need to address. So if you think about the kind of communications human beings have evolved in the real world, we have different communications for different kinds of information. We have a verbal conversation, people chatting over coffee with very short period of value and requiring presence versus a book which can, in the case of Bible, be available and valuable for thousands of years. And everything in between, so you have a variety of forms of persistence. You have a variety of forms of immediacy of the interaction so in some cases, it's really important that people be present together in order for the interaction to occur, in other cases, that doesn't matter at all. And then you have changes in scope of the interaction, so you have conversations you want to have privately, conversations you want to have with a particular group, a larger group, the whole world

So what you need to do is think about the kinds of communications that a brand needs to engage in, according to all this different communications channels. Some channels are about persistent data that needs to exist in the marketplace and somebody from the company doesn't need to be present. Some do require an employee be present. In some cases there is a need to broadcast to the whole world and in some cases the message is just to customers, or just to a specific customer. So the different online technologies that companies use define sufficient space within that communications queue to be able to address set of problems that that particular brand has in explaining and supporting its products at marketplace.

Hugh: So we've got a whole range of thing and what is required. One thing I'm interested to explore is the ways -- OK, you hire a bunch of agencies to do this for you. But that still isn't the end of the story. It doesn't result in changing the culture within organizations, once you start having a conversation that's much more honest. Can you talk a little bit about that?

Ted: Well, so you started out by saying, OK, let's go hire a bunch of agencies who do the communications. I think that the most successful companies are going to be ones where the employees of the company recognize then important part of succeeding in doing their job function within the company is engaging directly with the market, so whether you're developing a product or you are marketing product or selling a product, supporting a product or recruiting employees or all that kinds of things that a company does -- that a part of your job is going to be about having a conversation and having a direct interaction. Agencies can be helpful in educating and supporting organizations but ultimately, organizations have to make this a part of their core mission. So I think it is a lot about the traditional marketer or communicator in an organization becoming the facilitator of the organization.

Nicholas Carr in his book The Big Switch, talks about the electrical grid as an analogy for information technology and he talks about the history of the evolution of electricity in American manufacturing environments as a model for thinking about how IT will actually evolve from corporate center IT departments to services that IT organizations will tap in to the way we might connect with electric grids. And so, one of the things he talks about is the activity gap when electricity was first being installed in manufacturing facilities that were multi-story buildings. They were built that way because that was an efficient way to centralize the distribution of power when power was distributed by belts and pulleys. When electricity came into those factories, they simply tore out the belt and pulleys and replaced it with electrical wires. This really did very little to change productivity within the factories because the source of productivity in the factory was not the type of power. It was the way in which the production was organized and the production was organized in a way that satisfied requirement of power distribution via belts and pulleys but once you were freed from that limitation of belts and pulleys and you could actually design a factory to be on a single level where your products could move in a linear fashion on a single level through that factory. So suddenly something was possible once you have electricity as a way of distributing power and when that was implemented you had an enormous increase in productivity.

I think the Nicholas Carr actually misses the really important story that he actually otherwise is drawing a good parallel to, which is that the means of and systems of production need to be transformed within companies in order to achieve a real productivity increase from this change in information technology. Once you say, IT is about this very distributed connectivity and computational capability, what you're also saying is – I don't have to limit production to being inside my company. I can actually take the production to the market. How can I distribute production – how can I take production and say, hey, you know what? There's a group of people who are actually really smart about this particular aspect of the problem, and they can solve that problem and contribute.

IT technology, like electricity, changes production, in this case, changing it from linear single level (inside a company) to social -- distributed social production that's extremely powerful.

Hugh: So finishing off this conversation and as a proposition, The Conversation Group is not just about implementing a bunch of strategies or advising people on what particular communication channels to implement or whatever, there's a more profound mission, there's a more profound service. That TCG is offering.

Ted: For the chief executive who is considering how his or her business is going to not only remain competitive but rise above the other companies in the fields, the challenge is to not think about what is the incremental improvement. David Cushman has a great example in high jumping. High jumping was a sport in which people ran toward the pole and leaped as far as they could straight up into the air and then kick, put one leg up and then the other over the pole. And then someone came along and backed up to the pole, actually ran up to the pole and turned his back to it and flopped over and was able to achieve a height much beyond any of the people doing. So I think similarly, companies today simply look at incremental improvements in productivity, "how do I get a little bit more a lift."

But they could look at these technologies and say, how do I really transform and create improvements in a non-linear fashion that can allow my company to rise above my competitors. And in every industry, there will be a company that chooses to follow that path and chooses to see these technologies as a way to unleash employee productivity improving morale, improving ingenuity that's coming from those employees and then in turn increasing employee engagement externally with a marketplace... So every CEO in the world needs to be thinking about how can they inspire their organization to seize the opportunity that social technology offers and that's I think the thing that TCG more than anything also is able to help an organization do. We're there to support change agents and providing the understanding, the insights, the best practices, case studies of other organizations and also the really hands-on strategic in which a particular organization can adapt themselves to these new market opportunities.

Hugh: One final question. If I'm a well established marketing agency, why would I consider working with TCG? What would be the attraction for becoming part of this movement and how could I do that?

Ted: As an established marketing organization, you suffer from success. The flaw of any organization, of any person is embedded in their strength. Marketing companies today have had great success with the techniques that made sense in the context of the last 50 years. And they are married to those - that methodology, that process that had been successful. It's very hard for them to un-think, to change the way that they do business. So the most important reason for you as a marketing organization to try, to become a part of the movement with TCG is to really see some daylight, to see what is at the other end of this tunnel.

And the opportunity is to see that the future of marketing is about being the inspirational enablers and leaders of a whole new generation of business people who are going to be deeply engaged with their markets and you can learn how to be that sort of enabler when you work with us.

Hugh: That sounds very inspiring. Ted, thanks for talking to me.

Word of mouth Micro-Case Study

2009-04-11T09:27:00.000-07:00

Attention marketers -- the best way to understand how the new "connection" based marketing trumps the old "interrupt" models (as I have written about here in my anti-social marketing post) is to immerse yourself in these new environments and become a part of the new information flow. But here is a shortcut - documentation of a real example.

Step One - introduction to a new product
I follow a number of interesting people whose opinions I respect on Twitter. One of these people is Technorati board member and all around interesting guy Joi Ito (@joi on Twitter). Yesterday, while riding home on BART I was glancing through the latest Twitter updates when I saw an enigmatic post from Joi:

You'll either get this or you won't http://tinyurl.com/c3gpop

So I of course clicked on the link. Joi had linked to a band page for I Fight Dragons on the new music discovery site The Sixty One.

Step Two: Becoming Engaged
The site is full of accolades for this fascinating band from Chicago. Having lived in Chicago for 10 years (and having discovered some great bands while living there) I was immediately intrigued and the more I read about them the more interested in their music I became. While Joi was the trigger for discovery, the fan generated comments and descriptions of the band and their music was what got me really interested in learning more. In addition to comments and links to YouTube videos, The Sixty One streams samples of the band's music while you are reading about them.

Step Three: Transaction
Making the step to being interested to buying music from the band was of course just one click away via Apple iTunes -- and my total financial exposure was $0.99 for a single song -- a low cost to try out the band's music as a part of my running mix.

So in the space of one ride on BART I was exposed to a new band and bought their music, all as the result of an introduction through my social network. Read Seth Godin's post "First, ten" for more on how a small number of fans is all you need to make your great product succeed. And if you don't have a great product? Go back to the drawing board until you do have one. And stop interrupting me, I am busy listening to I Fight Dragons.

Social Data Revolution Interview

2009-04-10T13:05:00.000-07:00

Andreas Weigend interviews me for his video series on the "Social Data Revolution" following a class that he asked me to attend as a guest lecturer at the Berkeley Haas Graduate School of Business.

Defining Viral Marketing

2009-04-08T11:05:00.000-07:00

I am so tired of hearing the word "viral" -- especially in the context of a sentence like this one: "We need a viral video - can you help us create one?" Or like this one "do you do viral marketing campaigns?"

Now I am sure that I know what people mean when they say these things. They mean, can I spend a little money to create some content with my brand name all over it, and then get that content viewed by millions of people for free? In other words, can I fundamentally change the attention/cost equation of reaching my market with my brand message?

In order to understand why this is fundamentally the wrong question, it is worthwhile to go back to the original idea of online "viral" marketing, understand what a virus is (and thus why this phrase was introduced), and then address what companies CAN do to achieve that objective -- fundamentally changing the attention/cost equation...

So lets turn the clock back to July of 1996 when an innovative web company was introduced and then really began to take off, showing the kind of exponential growth that Internet sites are now famous for achieving. The company was Hotmail. Tim Draper, one of the company's investors, attributed the success of HotMail to something he called "viral marketing," specifically referring to "...Hotmail's e-mail practice of appending advertising for itself in outgoing mail from their users."

This to me is a much more useful definition of viral marketing than the more general usage of individuals proactively passing a piece of advertising around amongst themselves -- it gets at the heart of why it works.

So WHAT is a virus? A virus, as Wikipedia so helpfully tells us, is

a sub-microscopic infectious agent that is unable to grow or reproduce outside a host cell.

In the case of Hotmail, the host cell was an email message. The infectious agent was a tagline at the bottom of the message which said something like "get a Hotmail account for yourself" -- that is, a call to action to get this free web-based email service.

Why is this important? Because the thing which Hotmail was doing was NOT the virus, the virus was something users of the service passed along to each other unintentionally through using the service.

Which brings me back to how companies need to think about viral marketing -- the starting point is to determine what value the company can create for its target market. After determining what valuable contribution to this market the company can make, then the company can design a virus to be implanted within that host which does the work of spreading the company's message.

Please - stop with the "make me a viral video" - and start really creating value for your markets. You'll find that when you do you earn awareness, then attention, then respect. And you'll succeed in fundamentally changing the attention/cost equation of reaching your market with your brand message.

Temples to Brand

2009-04-04T10:44:00.000-07:00

Peter Hirshberg follows the brilliant Steve Hayden (Vice-Chairman, Ogilvy & Mather Worldwide) through a Macintosh and a Mac Cosmetics store in New York city -- Hayden comments on why these two "temples to brands" work so well to convey their brand's promise to their markets...

MAC v. Mac v2 from peter hirshberg on Vimeo.

Replacing ANTI-Social Marketing (part 2 of 2)

2009-04-03T13:19:00.000-07:00

(Part 2 on the replacement of anti-social marketing) In the developed world, and increasingly throughout the population of the emerging economies, we now have a mass-connected social information space. This is in contrast to the one-way broadcast information space which was the dominant model of the past century. That mass media model, of course, replaced local community information networks (word of mouth) as the primary way that we learn about our world. In doing so it allowed people to have a broader view of the world and be informed by a much more educated and diverse set of communicators. That is to say, there was a lot of good that mass media brought to communities and individuals by comparison to the local, parochial, and often xenophobic news gathering that we engaged in before mass media.

It is too early to say definitively that the technology which enables a mass-connected social information model has similarly improved upon mass media. I am not an adequate student of history to readily have examples of the critique that may have been made of mass media as it began to transform society. But there are certainly many critiques in our own time of the emerging "social media" from how our society will continue to have adequate watch dogs for various institutions (government, business, etc) to a general dismissal of the vast majority of "non-professional" content as being of low quality.

With respect to the first of these two complaints, the concerns are centered on the economic model which emerged over the past 100 years for supporting investigative reporting, namely advertising. A symbiotic relationship developed in which the high ideals of the fourth estate became dependent upon the corporation, or even the managers of the corporations (a sort of modern second estate). While this symbiotic relationship provided some illusion of independence for the individual journalist, the history of the media business has certainly been rife with examples of complicity between the owners of media and various elements of authority within society.

And so it may be that the coming change in the relationship between "advertiser" and "media" presents a similar opportunity for improvement over the old way. While such analysis will come year in the future, one thing we can be sure of today is that the change is upon us and that there are a set of new behaviors (as illustrated in this diagram) in which companies must elect to engage as a replacement for old marketing styles. Each of these deserves (and will get) a blog post of their own in the weeks ahead, so these descriptions are intended to simply introduce each of the three.

CONNECT vs INTERRUPT
Just as the fundamental behavior of the old marketing was interruption, the fundamental behavior of the new one is connection. It is increasingly ineffective to purchase space in broadcast media in order to insert the interruption of a company's marketing message.

image from John Willshire's terrific slide presentation on the future of advertising
Instead companies, and more importantly, their employees need to connect in meaningful, interesting, and authentic ways with their markets. And companies need to facilitate connections between their employees, customers, and prospects. The new information space is governed by the connections that we chose to create. Companies have to earn the right from individuals and communities to be a participant in these networks of connections.

Earning that right requires that companies create a context for the connection which is relevant to the individual or community. Under the old interrupt model, it was quite easy for companies to focus only on their own objectives -- "call now, operators are standing by..." Instead companies need to begin to think about how they create value for the people they want to reach.

COLLABORATE vs ENTERTAIN
Collaboration can take a number of forms - companies can co-create content with their customers, encourage customers to create content, or foster other kinds of collaboration. Where entertainment was an attempt to add value to interruption, collaboration can be an activity which adds value to connection. Collaboration can engage companies with their markets around new product development, marketing a product, selling a product, or extending a product experience through some new activity related to the product. Starbucks, for example, asks people to work together and with the company to develop ideas that improve their stores. Cadbury created Jivebrow09 in order to invite fans of their chocolates to create new versions of their television advertisement. And Lego has supported a number of independent collaboration communities around its "toy" bricks, including BrickWiki which offers detailed information, all collaboratively created, on building elaborate projects with Legos.

SUPPORT vs INFORM
As outlined in part one of this post, one of the key problems when a company seeks to "inform" the marketplace about its own products is the inherent conflict of interest. Why should I believe the company which clearly wants me to buy its products? Instead companies must learn to support customers in finding the information relevant to them about the company and its products. Third party sites such as Yelp, with service reviews or GetSatisfaction with customer service offer interesting examples to companies for how their customers can provide trusted information about them in venues where the companies themselves are also welcome to participate. Taken broadly, any activity a company engages in which supports their customers or prospects in obtaining relevant information is far superior to one in which the company itself tries to authoritatively be the source of that information.

What's next for media?
Throughout these two posts I have looked at the transition from anti-social to social marketing from the perspective of the companies engaging in these marketing activities. But there is of course a really important warning and opportunity for those media companies which have grown up symbiotically with companies. Media companies need to start thinking about how they can help to facilitate connection, collaboration, and support instead of seeing themselves as vehicles for companies interruptions.

A media experience that contains interruptions will be worth less than one that does not. And a media experience that connects its readers/viewers/listeners is one that will be worth more than one that does not.

The magic here is for the media to start thinking of themselves as being facilitators of community -- of being a part of the mass connections that are bringing us all together online. In doing so they could become enormously valuable intermediaries in the activities of companies to engage with their markets.

Replacing ANTI-Social Marketing

2009-03-26T06:52:00.000-07:00

For most of the twentieth century and even through the first decade of the twenty-first, marketing has been anti-social. The three primary modalities of advertising have been Interruption, Entertainment, and Information. While these methods were effective in a one-way mass media world, they are failing in a mass-connected social world. It is time that marketers learn to replace these anti-social marketing methods with three new social modalities - connection, collaboration, and support.

Before I explain how the new approaches can replace the old, it may be useful to once again explain why the old approaches are failing and are anti-social, even in a dictionary definition way,

Antagonistic toward or disrespectful of others; rude.

Eric Clemons, Professor of Operations and Information Management at the Wharton School of UPenn offered this very interesting article on Techcrunch, "Why Advertising is Failing on the Internet" and Doc Searls followed up with "After the Advertising Bubble Bursts." A pleasant half hour can also be spent on John Willshire's "The Future of Advertising in One Afternoon" (available as an easy to skim slide deck).

What all of them are talking about is that the transition from a one-way broadcast media to a deeply interconnected two way communications medium is, to use Clemons' word, shattering advertising. Ultimately the goal of the three strategies of interruption, entertainment, and information is the same -- get attention for a company's brand, product, or service. The common theme here is that companies must now work to earn attention through the social communications medium as opposed to being able to simply buy attention from the control points in the old mass media model.

THE OLD: ANTI-SOCIAL MARKETING

INTERRUPTION
For awhile now the old ideas of interruption marketing have been receiving challenges. Seth Godin offers a great description of the underlying problem of interruption in his book Permission Marketing and nicely summarized in this short essay by Angelo Fernando entitled "So Interruption Marketing Isn't Working"

Let’s say you’ve gone to the airport early morning. Someone walks up to you, and asks you directions to a gate you’re not familiar with. Since you have time to spare, and don’t mind the interruption, you try to help the person out.

Now imagine it’s later in the day at the same airport. You’re late for your flight, and someone asks you the same question. Will you give him the same attention? Finally, a third scenario: You’re late for the flight, the airport is crowded, and this is the fourth person to ask you the same question. What are the chances you will pay any attention at all? You’re probably going to even develop a strategy for avoiding further interruptions –not making eye contact, brushing them off, refusing to help.

This is the simple case - information overload or "smog" - as a reason that interruptions are not working. So many interruptions are competing for our attention that we have developed strategies for avoiding them. But there is something else happening here as well, something deeply anti-social.

When advertising was presented as part of the one-way stream of information arriving on our porches, radios, or televisions we accepted that advertising as a part of the total experience of the medium. But once the medium for information becomes two-way, interruption advertising becomes disrespectful or even rude. Imagine yourself in a conversation with another person:

You: How did you like that episode of Heroes?

Friend: It was great I really liked the special effects

--interruption-- Buy Heroes T-Shirts NOW --interruption--

You: Anyway, as I was saying...

This conversational example is an anecdotal way to illustrate what happens when the directed engaged communicating online user is interrupted with advertising - even when it is "contextual." To expand on this illustration, consider two shifts at work here that contribute to the downfall of interruption --

(1) Freedom of Choice -- more and more information sources are emerging which have the relevant information that we may want. Sources which are free of interruption and easy to navigate will be preferred over sources which are choked with interruptions. In addition, we have an increasing array of strategies to eliminate the interruptions from the information we consume - Tivo, pop-up blockers, etc. This expansion of choice also leads to the second shift...

(2) Seek vs. Browse -- when we received a bundle of information which happened to include advertising, we would browse through all of it and select that which was most interesting (sometimes even advertising). Now an increasing amount of our media diet is search-originated and it is much more difficult (and unfriendly) to interrupt someone when they are pursuing information in a directed mode. Even how we browse is shifting with more of it happening in social spaces in which we are browsing what our friends are doing, thinking, watching, reading. Learning about something interesting to read from a friend is a much more difficult (and unfriendly) mode of behavior to insert interruptions.

Interruption, the corner stone of the advertising industry, is "shattering."

ENTERTAINMENT

When is an interruption not an interruption? When it makes us laugh? When it is art? Although not everyone can agree on what is funny, or what is art, or (more broadly) what is entertaining, a stand-by of the advertising industry to rise above simple annoyance has been to create advertisements which in some way entertain.

And sure, the "bud - weis - er" frogs were amusing. The first time. Which is why the company has had to run thousands of different "funny" advertisements over the past few years -- once a particular punch line has been laughed at, it's time to move on to the next one. Very few "entertaining" advertisements are as entertaining the second, third, or fourth time we see them.

And this may not be the biggest problem with entertainment as a method of advertising. The biggest problem is more likely to be -- does it even work? Do people watching an entertaining advertisement actually remember what brand was associated? And if they do remember, is the association positive or (as in the recent case of the GoDaddy.com Superbowl ad) can you actually do damage to your brand?

The core problem is that the "entertainment" is probably not core to the brand value. So while a scantily clad woman may get attention, it doesn't actually communicate anything related to running say, an Internet service (as in the case of GoDaddy.com).

Obviously entertainment products can be a lot more successful using entertainment as a building block for an interrupting advertisement. A snippet of a song, for a singer. The movie trailer. Any excerpted material from an entertainment product can itself be entertaining as well as remaining core to the brand value -- sometimes the trailer IS the core value and is better than them movie itself!

But leaving aside entertainment products, why should a beer company, an auto manufacturer, or an accounting firm use entertainment as the content of a strategy for getting people's attention? Because it is less irritating than an interruption that doesn't entertain?

INFORMATION

Finally, the last of the core modalities of twentieth century advertising - provide people with information. What a great idea. People need information and companies can be the source. Want to buy a new Ford Taurus? Get all the facts at ford.com... or should you? Why would you trust the company that wants to sell you the car to give you honest information about the car? According to Edelman's "10th Annual Trust Barometer"

Trust in corporate communications like press releases, reports and emails fell to 26% from 38%; a company's own Web site to 24% from 31%; and corporate or product advertising to 13% from 20% among informed publics ages 35 to 64 in 18 countries. (emphasis added)

Just 13% of people "trust" advertising. And you can expect that this 13% is the most trusting of any communications from anyone -- not the best audience on which to build your business strategy.

Of course the other problem with information based advertising is getting it to the right person at the right time. While I may be interested in price information on a new car when I am making a purchase decision, I am definitely not interested in such information a month after my purchase. Search engine marketing is the one place where an advertiser has a high likelihood of success in placing information in front of a potential customer at the moment of interest, and for this reason it is, so far, an enormously successful advertising medium.

But given a choice between information from a peer and information from a company, there is no doubt (as Edelman's survey shows) that people will chose to heed information from a peer when making a purchase decision.

Even advertising as information fails when social communications reaches critical mass and exceeds one-way broadcast as the way in which we gather knowledge and entertainment.

Next post -- How the new will replace the old - connection, collaboration, and support.

Facebook Missed the Whale (and it's OK)

2009-03-24T07:20:00.000-07:00

UK blogger (and deep thinker) Chris Thorpe writes on his blog jaggeree "Why Facebook Shouldn't be Twitter" opening with a tweet from Tim O'Reilly

FB redesign also shows the danger of paying too much attention to competition, instead of thinking more deeply what you are about. It's hard

As Chris writes, "...he’s nailed it again" and I'd have to agree. Chris goes on to provide some good thoughts on why the "activity stream" that Facebook had served a quite different purpose from the "status stream" of Twitter. In particular he highlights the difference between these two different "communities" of people which helpfully points out why the two different design patterns work well for the way in which those separate communities work. All of which sort of explains my sense of loss every time I look at the new Facebook page and don't see my activity stream.

Expect a lot more of that over the coming days and weeks - and expect the activity stream to return in some form. Facebook is looking over its shoulder and worrying that they are missing out on new ideas like Twitter - and perhaps they are irritated that puny little Twitter turned down their acquisition offer. But most importantly they are looking at an engagement model that may become more compelling than their own for constant connected repeat usage.

Which gives me an excellent opportunity to revisit one of my favorite topics over the last 10 years - how we are slowly building up a set of online communications tools to support all of the different modalities of communications we have in the physical world. Its also a good follow up to my April 2007 post in which I first attempted to explain Twitter.

Looking at the graph to the right, you can see my attempt to more visually explain the idea from that past article of "Presence, Scope, and Permanence" as defining the three axis of a communications cube that we operate within. From that earlier article, here is a more complete description of these axis:

PRESENCE
Is it necessary for the participants in the communication to be present at the time the communication is created? For example if you are taking a class, you need to be present in the classroom to get value from the lecture. But you can read a book thousands of years after it was written. The recipient must be present to receive the lecture but is usually not present when a book is written. Similarly, a phone call is a synchronous form of communications -- both speaker and listener must be present. Voice mail is asynchronous -- the listener need not be present at the time the recording is made and the speaker need not be present at the time of listening.

SCOPE
Classrooms engage a defined group of people in a conversation, newspapers engage an undefined group, a phone call typically involves just two people. Scope is about the number of people involved, the relationship between those people, and the privacy of the communication.

PERMANENCE
Information has a shelf life (or even a half life). Some information is valuable for thousands of years, other information is valuable for only a moment.

Each of these two different communications tools - Twitter and Facebook - fit into different (albeit adjacent) section of the cube. But they are NOT the same -- and the successful design pattern for each will be quite different. In fact, the only axis in which the two clearly share an edge is Permanence -- and even here, Twitter is now being used in ways which might actually move at least a part of their database toward more permanence, whereas Facebook (or at least the old activity streams) are very much about ephemera. Not that Twitter isn't mostly also ephemera (or what Chris calls "nowish" linking to this great visualization on Flickr by moleitau). But there are aspects of how Twitter is being used which can usefully be searched meaning that they have retrospective value.

But along the other two axis - Scope and Presence - the Facebook activity streams and Twitter status updates clearly play(ed) different roles. The reciprocal nature of Facebook meant that you were really only talking to your friends, whereas on Twitter you might be talking to friends, stalkers, the Federal Justice Department -- of course you could control access, but the design pattern didn't make that an attractive usage. And on Presence, Twitter existed as a stream with most tweets being relevant if you were near-immediately present, whereas a Facebook activity update remained a prominent part of a user's profile for as long as that user left it there.

In considering this analysis that I have presented, please do not rely solely on the user experience offered by the two companies, but consider instead the larger user experience created by the communities. In the case of Twitter in particular, look at the 100+ products that have been built around this "message bus" for how people are really using the service.

All of this is why in the end there really are two different businesses here and Facebook will migrate back toward activity streams and someone else will have to challenge Twitter for the status update business. The strategy that Facebook has been following of trying to absorb every part of the communications cube is flawed - the strong anchor for them is SCOPE - this is about reciprocal relationships. For Twitter it is PERMANENCE - this is about ephemera and occasionally about how that ephemera is transmuted into something more permanent because in aggregate it teaches us something new.

The Butterfly of Change

2009-03-22T16:35:00.001-07:00

A number of very good posts on the future of News (and media in general) out in the past week. Struggling newspaper SF Gate offered this summary (via columnist Mark Morford) The Geek gurus all weigh in on the end of dead-tree media. Are they wrong? It's not a bad question, despite an opinion piece full of what seems like bitterness or frustration. After all Clay Shirky's article, Newspapers and Thinking the Unthinkable, and Steven Johnson's speech at SXSW, Old Growth Media and the Future of News didn't seem to be a "...pile on the I-hate-mainstream-media bandwagon..." that Morford insinuates.

But it is certainly reasonable to look at all the Morfords (and Alan Mutters) out there and all the Shirkys out there and ask - how can these two groups of very smart people be so opposed to each other on the basics and how can anyone understand where this is really going?

To this debate I offer a visual aid, the butterfly graph which I have thus named because you could see each of the loops on the left and right of the image as wings and because I like the idea of catching the winds of change... allow me a little poetic license.

But here is how to read this graph -- The red line is the "old way" of doing things and the green line is the "new way." The slope shows that the old way declines in efficacy as the new way increases. At some point the pace at which the old way is declining accelerates and then flattens again as many niche uses hang on over time.

The blue bar in the middle is the period of confusion during which the old way is still working, so adherents can claim that there is a path ahead for their existing model of how things should work -- and their claim is bolstered because the new way isn't yet clear and working.

One of the really interesting characteristics of this blue period is that the old way will take on attributes of the new -- which will both hasten its demise as well as suppress the emergence of a new way that works. An example in the news business is the "free content" which is so hotly debated now amongst the two sides of the future of news argument. Early on in the process, the economic rationale of providing free (advertising supported) content made sense to newspapers eager to build online audiences. So instead of radically re-examining their businesses (and maybe creating craigslist or match.com) newspapers continued to pursue the product logic of the printed world but with a digital distribution. So for this reason every online paper reproduces the print version horoscopes as one example.

But as the "old way" declines -- in this case physical paper distribution becoming less desirable to consumers than instant online access -- having adopted the model of free content and retaining the bundling logic of the physical media, prevents newspapers from radically rethinking their model - they simply don't have the economic wherewithal to experiment. And at the same time the continued flood of free high quality content is dampening entrepreneurs ability to accelerate new models effectiveness. It will take many more Rocky Mountain News and Seattle P-I failures before the slope really shifts and we start to see a crossover of new experiments working and the old recognizably being dead and done.

So to Morford's reasonable complaint to Clay Shirky that he "...has no idea what will replace newspapers and professional journalism." I would answer that Morford himself as a stakeholder in the future of journalism has a better chance of answering the question than Shirky the professor -- answer by stop supporting the old print media and start experimenting in the new digital media. Yes as in other periods of revolution there will be a period in which many of these experiments fail. But the seeds of the new are already planted and growing and the strong ones will fully replace the old over time. And I don't agree with the pace -- I think it will be years and not decades.

Experience Economy Requires Authenticity

2009-02-23T09:02:00.000-08:00

Back in February of 2004 when Joseph Pine (author of Mass Customization and now Authenticity) gave this talk at the TED conference, few people were using the words "Social Media" -- "Joseph Pine: What do consumers really want?" But his comments speak directly to why (to quote one of my favorite articles on social technology's disruption of 20th century methods):

...the new media are rewarding more participatory, more sincere, and less directive marketing styles than the old broadcast media rewarded." (Harvard Business School: Working Knowledge
"Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers" September, 2007)

In his talk Pine provides a model for thinking about the "Progression of Economic Value" from agrarian society to the modern day.

Pine outlines these four stages of economic value which he associates (like Toffler) with an agrarian, industrial, and now a post-industrial economy. In the agrarian phase all we had were commodities and the production and control of those commodities was the central aspect of our economy.

In the industrial phase we took commodities and manufactured them into goods, which then could be distributed and marketed. But Pine describes a "commodification" of goods as the broad-based ability to manufacture a high quality and low cost product.

His first book, Mass Customization explored how companies should escape from the commodification of goods. His suggestion that companies add a service, customization. But this approach has been commodified as well as all providers learn that they can be equally good at customization.

This led Pine to the idea of "experience" and more recently "authenticity" as the differentiation which companies could strive to provide to keep their products distinct from those made by others. In his view it is not just the product that customers care about, but the experience of buying and using that product. Think of Apple's retail stores as an example.

But as Pine observes, this new "experience economy" requires a high level of authenticity and most companies, in the age of social media, are unprepared to deliver. Charles Green wrote recently on the topic of Customer Centricity in his Trust Matters blog:

..."customer centricity" is so easily hijacked by the dominant ideology of competitive advantage. The competitive paradigm—our leading view of business today—is repressively tolerant of customer-centricity. The hijacking turns the new idea into merely a tactic to serve the old idea. Customer centricity is neutralized, subsumed into the competitive paradigm.

Charles goes on to give specific examples, like the message when you are on hold with customer service assuring you that "your business is important to us." This rings untrue to the caller, it isn't what Pine would call "authentic."

If your company is selling a product that has become equivalent in cost and quality to those of your competitors, Pine's message is for you -- you must now focus on the total customer experience and not just the product to succeed. And once you do, you will discover a whole new challenge in rising to the demand for authenticity. Meeting that demand will require you to reformulate your company's policies, philosophies, and your organizational structure.

Scoutlabs Launches Today

2009-02-18T06:25:00.000-08:00

Yes its true, the super-secretive Halsey Minor backed Scoutlabs is launching today according to a post from co-founder Jenny ZesZut. And even better, they are giving away 30-day free trials for their outstanding social media monitoring and collaboration platform. I learned about Scoutlabs through ex-Technorati folks (they have hired some of the very best) and am very grateful to have been one of the early testers on the system. We are already using the product with a number of our clients and I expect that to increase.

There are a lot of aspects of the Scoutlabs product that I like, perhaps the best is the collaboration model -- getting all of a team on the same page about what is going on with our company. I will post a longer review later -- but for now rush over to their site and request a free 30-day evaluation... tell them Ted sent you!

The new Symbian

2009-02-15T09:40:00.000-08:00

The new Symbian Foundation is getting its first public exposure this week in Barcelona at the Mobile World Congress. A new blog has been created for the Symbian Foundation where you can see some photos from the booth and also see the new logo. It is a great compliment that Lee Williams, the new Executive Director, has invited me to contribute to the Symbian Foundation leadership team as an advisor and I have thrown myself into this effort with heart and soul.

The basic mission of the new Symbian is to release the entire Symbian operating system as an open source project and to coordinate a broad community of companies and individuals to build that OS as the premier mobile computing platform. With the long heritage that Symbian has and the tremendously deep technology that is a part of that history, this decision to open source the operating system really changes the game in the mobile world. There is a long road ahead to fully realize the vision, but operators, manufacturers, and software developers will need to take Symbian into account as they make their future plans -- and I believe in Lee Williams and the movement that he has begun to make Symbian the pre-eminent mobile computing platform.

Join me in following this journey by reading the blog, following on twitter at http://www.twitter.com/symbianf and by joining the Symbian facebook group.

Apple and AT&T have this really wrong

2009-02-06T12:56:00.000-08:00

Another lovely visit to the AT&T store, this time because a member of my family dropped her iPhone into the, err... toilet. "It was in my back pocket and I..." oh whatever. Fine I will get a new iPhone for you. But wait! What is this! I have to pay full price AND sign up for an additional 2 year contract?? Huh??

Apparently the special price is only for NEW lines being activated. But for some reason when you purchase an iPhone as a replacement you not only pay the higher full price for the device but AT&T still insists upon tacking on two more years to your contract commitment.

Surely this is not right! Timothy, the "sales consultant" at the 425 Market AT&T store assures me this is true and insists that it is all Apple's fault. And you know what? I agree with him. It is definitely Apple's fault that in the US I have no choice (if I don't jail break my phone) but to have AT&T as my service provider.

Which reminds me of another beef I have about AT&T -- how is it that I can have five bars of signal strength and the 3G symbol but absolutely no data connectivity? Why is it that from my office, also with five bars of signal strength, no one can hear me talk? Why is it that you guys can't figure out how to give me an iPhone app that lets me alert you to a problem with your network using the GPS coordinates for where I am having trouble? Why can't you become more customer centric? Oh, because you are a monopoly and you don't need to be customer centric. Right, I knew that. Hey Barack!!!

Business Will Change

2009-01-22T18:12:00.000-08:00

As some of you already know, I have been working on a book. So far I have written first drafts of twelve chapters and second or third drafts of a few. The book is the result of reflecting on the fifteen years I have now spent participating in the evolution of the Web, and more specifically is inspired by the consulting work I am currently doing. In this work I am trying to help businesses understand the fundamental shift that is underway right now in the very notion of production, brought about by the rapid adoption of social technologies.

Many people have written about The Power of the Network (David Cushman) or to be more academic, The Wealth of Networks (Yochai Benkler). And marketers have been warned about what happens when there is a Groundswell (Charlene Li and Josh Bernoff) or what to do when Here Comes Everbody (Clay Shirky). And these all have been terrific inspirations for my thinking.

But this book is a little bit different from these others. As I write in the introduction

"I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today."

That is, this is a book that seeks to help explain what is happening in every day language and what to do about it as an individual business person.

Embracing the same concepts that I am writing about in the book, I have launched today a website on which I will be publishing drafts of every chapter, open to comment (and hopefully improvement!) by anyone who chooses to stop by. The site is:

http://www.business-will-change.com/

To start with I have posted just three pieces:

Introduction -- How Collective Intelligence Will Change The Way We Do Business

Chapter One -- Adapting to Change: How We are evolving into a new species

Chapter Two -- The Precursors of Change

In a week or so I will load a few more chapters on and so on, hopefully settling into a regularly weekly update cycle. I hope this idea of writing a book in public captures your interest and that you join in and tell me what I am getting right and wrong!

When is Advertising Not Spam

2009-01-21T20:49:00.000-08:00

Please step in and disagree with me. But personally I am really starting to feel an emotion when I see advertising that I feel when I see SPAM in my email inbox which is to say -- anger, frustration, and in some cases a sense of befuddlement... why is that brand wasting their money cluttering up my media experience? So I have been trying very hard to come up with a model that explains when advertising "works" and when it doesn't.

In the broadest sense, SPAM email messages are:

unwanted messages from unknown senders

which can also be a good description for advertising. Most of the time advertisements are by definition unwanted -- they are clutter or they are blockades between me and what I want to see or do -- whether in my real (magazine, TV) or virtual (web) environment.

But there are certain circumstances in which an advertiser can overcome either the "unwanted" aspect of their message or the "unknown" aspect of themselves as a sender. Here are some of the ways an advertiser can overcome the "unwanted" message problem:

INFORMATIONAL - provide (or link to) valuable information -- I may not have realized I wanted the information, but having it makes me feel better.

ENTERTAINING - make me laugh, or at least smile, or have a sense of wonder -- I'll likely forgive the intrusion

CONTEXTUAL - get the context and timing right -- such as an ad in search results -- you guess correctly that I am actually seeking the information

The unknown sender problem is a bit more complex and an understanding of this challenge can emerge from again comparing with email. Think about emails you receive from people and how you would evaluate their appropriateness based on the content of the email and the relationship you have to the person sending the message. Messages might be more beneficial (a party invite) or more costly (a solicitation for money, a request for an introduction) and you will evaluate these in the context of the social strength of the relationship. A message from a "best friend" might always be welcome, even if it contains a quite costly request. Whereas the most beneficial message from a stranger would likely be unwelcome (if not also distrusted).

The same calculation is true of brands -- you might know of a brand, like McDonald's, but hold it in low regard. Thus as solicitation to purchase cheap burgers might seem very unwelcome. But if you really enjoyed eating at McDonald's the same solicitation would perhaps be quite welcome.

An interesting option is presented by Retargeter to which I was recently introduced by Auren Hoffman of Rapleaf (more on Auren's really interesting business in a later post). Mechanically what Retargeter does is tag a visitor to your website so that later on, when that visitor is on a page with advertising on which Retargeter has bought the ad space, an ad for your company can be shown to that visitor. In this way you are showing an ad specifically to people who (by visiting your site) have expressed an interest in your company.

This can of course be taken to an extreme and I have not yet connected to Retargeter to ask how a company can limit the number of ads shown to any one person or the length of time after a site visit during which an ad might be shown. But by showing ads to a person who has proactively visited your site, you are almost certainly connecting in the short run with someone who has a strong interest in your brand.

This may seem counter-intuitive. Shouldn't a company spend money to raise awareness with people who DON'T know the company? Why spend money advertising to someone who has already visited your site? Actually for many kinds of businesses a company needs to build up awareness and be top of mind to ultimately lead a customer from an expression of interest to a purchase decision. Advertising to people who already have some awareness of your business can remind them of an option under consideration and thus shorten a sales cycle or raise your brand over a competitor.

I am very interested to hear of other examples of advertising that is not spam. My inclination right now is to strongly recommend against spending money on advertising and instead for companies to focus on creating meaningful connections with their markets. But I also accept that there are circumstances in which advertising "works." Defining those circumstances will become an important tool for companies to understand how to allocate marketing dollars between this one-way messaging and the more labor intensive (though usually more rewarding) two-way communication.

No Comment

2009-01-18T10:36:00.000-08:00

One might wonder why an organization would choose to use a blog as a communication tool if, as in the case of Federated Media's Blog, the organization doesn't allow comments. To be clear, at the bottom of each post there is a form for submitting comments. But one glance at the home page shows that submitted comments do not move from moderation to publication.

Sure, lots of blogs out there have no comments -- my blog in fact has very few. The number of people who choose to comment after all is relatively small by comparison to the total number of readers, and there has to be something to say. John Battelle was, for example, kind enough to comment on my blog when I published a compliment of his Web 2.0 Summit. But what else would anyone have to say to that post?

On the other hand, if you claim, as John has in his "Change and Opportunity" post about a 10% staff reduction at Federated Media, that your company has

...completely reinvented the concept of what "marketing" could be.

you might expect a few people to want to comment. And if you are going to claim that you

...helped define the practice of what we call "conversational marketing."

then you probably owe the market a real conversation. But maybe this blog post shows exactly what is wrong with the definition John has been using for "conversational marketing" -- too much marketing and no conversations.

Totally Transparent Layoffs

Tony Hsieh has certainly set the bar for transparency quite high in his blog post about Zappos layoffs back in November. Crain Communications' Workforce Management magazine wrote about that act of courage, "Social Media Begins Forcing the Totally Transparent Layoff." In this article author Ed Frauenheim quotes Libby Sartain, former head of human resources for Yahoo, saying

“People tweet, people blog, people text,” Sartain said. “You are going to have a completely transparent workplace at all times. You can’t really spin it.”

The blog post that Tony did has pages of comments from engaged customers, past employees, and industry observers. One past employee writes

Tony Hsieh and Alfred Lin are some of the insightful, kind, and compassionate corporate executives that I have ever had the privileged of working under.

Now that is a company people will want to work for, even if it (like all companies) will sometimes have to layoff employees.

The Case for Transparency

Done right, transparency can be a powerful tool for a company to communicate its core values and, even in a difficult time, build a positive impression of the company in the larger marketplace. So what was wrong with John's blog post? Let's start with the title - it wasn't about respecting the people who were being shown the door, it wasn't about telling the marketplace that Federated treats its employees, even in bad times, with honor and respect. It was instead a marketing pitch for Federated. From the title of the post -- "Change and Opportunity" -- and on throughout the post John writes about FM and not about the people who are now without work.

Secondly the post didn't communicate to customers, in this case the sites which Federated represents, what will happen to them. Will it take longer to get a report? Will fewer ads be sold? Will some sites be cut? An important customer, Michael Arrington, claims he read about the changes on their blog. Certainly in both communicating to employees and to customers a blog post does not replace private communications (in which FM was undoubtedly also engaged). But transparent communications can help bridge the communications gap and make sure that the company's point of view is made clear.

And transparency has the additional benefit of speaking to the much larger audience of potential customers and potential employees to tell the company's story and show what the company stands for and believes in, demonstrating how it treats its stakeholders through good times and bad.

Advertising vs. Conversations

For me the most interesting aspect of this story is the one which appears to have been the most mangled in the way in which it was communicated (and reported). Paid Content reported the news with the headline "Federated Media Shifts Away From Display Ads" which is probably not the lede that John was hoping for. According to Chas Edwards, quoted in this article, Federated had over $39 million in revenues in 2008. One would guess that most of this is from "dumb display advertising" as Edwards calls it, hoping perhaps that his dumb advertisers don't notice how dumb he thinks they are for giving him their money.

But I think Federated Media does have a great opportunity to lead the industry in a fundamental change and that John Battelle could be a great spokesperson for doing marketing in an entirely different way. As Joseph Pine tells us in his latest book, what we really crave is authenticity from the companies with whom we do business. In my view "conversational marketing" is about being transparent and being authentic - having a real, open, interactive conversation with others in the marketplace, treating them as peers.

But if FM is going to be a leader, they will have to start by being a good example themselves.

Gaza Solution - just $75 B

2009-01-11T07:30:00.000-08:00

Reporting on the Forbes list of the wealthiest people in the world, CBC News (Canada) writes that the 34 "Web Billioniares" have a collective net worth of $109.7 Billion. Overall the total worth of just America's wealthiest is, according to "The Forbes 400," worth approximately $1.57 trillion. And in this time of global economic crises, the governments of the world plan on spending many trillions in the next 12 months to help our industries and citizens.

So when we look at the tragedy in the Middle East of the Palestinian and Israeli confrontation, it is helpful to put into context some simple math. 1.5 million people live in Gaza. If you assume an average family size of 20, that is 75,000 families. What if the wealthiest people on earth offered each of these families a relocation package worth $1 million dollars, for a total investment in world peace of just $75 Billion? Add in a few governmental and non-governmental bodies instead of just making this the work of private individuals, and suddenly we could expand beyond Gaza and institute a global relocation program for politically displaced families.

The plan is not without challenges beyond convincing one (or more) wealthy people and countries to donate the funds. And you would have to find 75,000 places around the world ready to accept a Gaza family (albeit now worth $1 million) or a family from one of the other places we would expand this program to include. And there would be an enormous challenge as the program expanded in trying to determine how to distribute funds to non-Gaza families who would also want to join the program. The struggling citizens of a thousand places would wonder why they too shouldn't be the beneficiaries of such largess.

But there is a good reason to start with Palestine. Is there any other people on the planet that have been displayed by the United Nations establishing a nation state for a different group of people? While many injustices have been done to many people around the globe by individual governments, I can't think of anywhere else where the world governments have come together to displace a people (albeit for a great cause in establishing a Jewish homeland).

Of course one might wonder whether a Gaza family would make the rational economic decision to leave their land and relocate to an unknown place and, having done so, whether that family would use the opportunity to build a new life or to plot revenge upon Israel. A program of this kind would need to include a great deal of social and educational support. And not every family would agree to go so there would be the challenge of a diminishing population in Gaza who would be increasingly a concentrated minority of interests which oppose Israel.

But an offer of this kind would also bring into the sunlight two perversities of the current conflict -- first, that Arab states find that it is more valuable to have this embattled civilian population constantly on the edges of Israel and second that some of those people themselves are more dedicated to the destruction of Israel than they are to the well-being of their own people.

And the math points out a fascinating and frustrating asymmetry to the war on terror. We are willing to spend billions of dollars every month on an unnecessary war in Iraq, but we are unwilling to spend the money required to solve one of the most critical issues contributing to political instability in the middle east (and the world).

So here is a challenge to the economies of the world as we launch trillion dollar "stimulus" programs. What can we do to organize resettlement of the Palestinians? How can we create a program into which individuals and governments will be challenged to contribute large sums of cash on an ongoing basis, and regional governments encouraged to accept the resettled immigrants, so that over the next half-dozen years every family who wishes to leave Gaza may have the opportunity to do so?

First step - Begin a fund for the resettlement of Palestinians and invite individuals and governments to contribute funds for this purpose.

Second Step -- Once some minimum funding level has been achieved ($50 million?) establish the Gaza Sweepstakes. Any family who elects to leave Gaza may receive, for free, a lottery ticket. Each week, a number of families will be transported away from Gaza. The relocations will be covered by the media, the relocated families will receive ongoing attention as they integrate with the new communities into which they have been delivered. The families will receive money and counseling to assist them in integrating into their new community.

Third Step -- having demonstrated the success on a small scale, a global campaign of citizens appealing to their governments will be launched to raise a growing fund to relocate Palestinians, and when that project has been completed it will be expanded to the next most problematic population in the world.

Pierre Omidyar, are you listening?

The Future is Already Here...

2009-01-08T01:20:00.000-08:00

William Gibson is credited with the wonderful quote, "...the future is already here. It's just not very evenly distributed." I was reminded of this quote twice here in Helsinki this week as I spoke with a variety of companies about the impact of social technologies on their businesses. It is way too easy when you are sitting in the middle of the tornado of change to lose perspective on the winds that rage around you and, more importantly, the seeming calm in the path ahead of the tornado.

Forrester has done a great job of documenting this path, where it has been, where it is now, and where it is heading. The survey data which they have made available through the Social Technographic Profile Tool can give you a snapshot of this progress. Now updated with 2008 data, you can see the differences between the US, where 38% of 18-24 year-olds are now creating content online and Germany, for example, where the number is a much smaller 22%. Or the difference between the 18-24 year-old cohort and 45-54 year-olds in the US where the creator rate is only 16%.

But as Forrester analyst Jeremiah Owyang shows on his Web Strategist blog the trends for every demographic in every region are toward more engagement. Perhaps the most dramatic finding is the change in "inactives" -- people who are paying no attention at all to social media -- from 44% in 2007 to 25% in 2008.

In addition to engaging more people, the other often overlooked impact of social media is in the way that it is changing mainstream media. So even for those people who are not engaging directly, the news and entertainment that they consume is changing. Journalists and entertainers are amongst the most likely to be engaged with these new social technologies and what they report and create is clearly being influenced by this new medium.

As Gibson might say, the future will never be evenly distributed, but the path of this cyclone seems clear to us now -- social media will change every business and will change virtually every aspect of how we develop products, market and sell them, provide service to our customers, organize our work environments... In every industry there will be companies that embrace these new tools and new approaches and those that are torn apart by the fierce winds of change.

Which will your company be?

More News

2009-01-04T11:03:00.000-08:00

I love David Byrne's music, but I feel compelled to disagree with his recent blog post in which he opines that the bankruptcy of the Tribune Company is leading to a world in which we will have "No More News." I would, by the way, complain on his blog but he doesn't provide a comments capability. Perhaps as a public figure of his stature it is impractical to allow comments since moderating them would be such a time burden. But lets bookmark this point for a moment, as I think the lack of dialog (and perhaps the lack of understanding of what this dialog brings) contributes to Byrne's misunderstanding of what is happening in the media ecosystem.

The basic point that Byrne makes has certainly been repeated endlessly - the Internet has radically transformed the business of news and the companies which have understood how to make a living collecting and distributing news in the last century are failing to find a new model as the fundamentals of this business change. Byrne also mentions (though without commentary) the fact that the people running these news businesses have been making changes which make them even less relevant. I thought this observation was particularly well stated:

Likewise, these newspapers have dumped most of their foreign bureaus, food critics, and film critics, and are loathe to assign reporters to stories that will take months to research and write. In doing so, they are eviscerating that which makes newspapers different from online reviews, blogs and websites.

But Byrne goes on to complain that there is an enormous threat to our democracy because of the decline of these traditional news businesses and I think this is a mistake.

It is undoubtedly true that we are in the midst of an enormous tumultuous period of change for the news business. It is also true that from the perspective of the traditional news business, their model is being eviscerated. But this does not mean that there are no possible models for a news business. In fact, I believe that the future of news is very bright and that as a society we will (and in some cases already are) enjoy more news content not less in the future.

First of all, Byrne ignores the fact that bloggers and "citizen journalists" are already making an enormous impact in challenging entrenched media interests and bringing more facts and more "sunlight" into our political processes. The political campaigns of the past year showed how effectively the non-mainstream media could play a role in debunking lies, providing information which would otherwise not have made it into the limited space of broadcast media, and giving people with specific local information a way to get that information to a national (and international) audience.

The wonderful NPR program "On The Media" recently had a segment on the Japanese Kisha Press Clubs which make transparent a fact which is as surely true with our mainstream media -- that journalists will sometimes become too friendly with the people that they are covering in order to obtain access and that this closeness will then taint the coverage of these people. The Kisha Clubs institutionalized this closeness even going so far as to manage a list of issues which all participating journalists (which is to say, those that got access to representatives of the government) would agree NOT to cover. And this is only coming to light now because of bloggers.

Journalism will change, the business of news will change, but rather than looking at the failure of the traditional news media as being a threat to democracy, as Byrne does, I prefer to look at the strength of our democracy as being the force which will lead to a new journalism and a new business of news. This was certainly the case for the newspaper industry we have today. Newspapers were started by people passionate about the mission of the fourth estate and only later were taken over by accountants.

Al Gore, in his closing keynote speech at this year's Web 2.0 Summit conference, provides an interesting perspective on the broadcast media industry. In brief he observes that the printing press started a process in which knowledge was democratized but that television (and in general the concentration of media ownership) was a "re-feudalizing" force in our society for the past 50 years. Concentrating ownership and control of the media into a small number of corporate interests reduced the number of voices participating in the conversations of our society. While one could certainly point to the tendency of some news vehicles (like Fox) to use this power to promote a particular ideological position, the more frequent result was blandness.

Social creation of the news is removing the blandness and is a force FOR democracy. The future of in-depth reporting, investigative journalism, and foreign news desks, which Byrne worries we will lose, will emerge from this creative power of social production. We are still in the infancy of this new medium and we have a lot to learn still about what forms this NEW fourth estate will take. But I already believe that we are witnessing an explosion of news, not an elimination.

The Odd Couple: ATT and Apple

2008-12-23T12:33:00.000-08:00

I recently went to purchase an iPhone 3G here in lovely San Francisco. Walking toward the Apple store, I remembered that halfway between my office and the beautiful apple store at one stockton street is an AT&T store. I don't really need to go to the Apple store, I thought to myself. So instead I went through the glass doors at the corner of Market and 3rd and into customer hell.

The first thing I noticed was the grouchy sullen customers seated around the room -- perched is probably a better way to describe this as there wasn't really anywhere to sit. So they were leaning against displays, sitting on the ground... The second thing I noticed was the sullen AT&T employee with a clipboard who approached me.

"Hi, can I put you on the waiting list?" he asked.

"Uh... how long is the wait?"

"Only 20-30 minutes."

OK, so here I am, a live customer wanting to give them my money, and they want me to sit on the ground in their store for 20-30 minutes in order to have the privilege of buying something from them!? I said no thank you, turned around and walked right out again. Off to the Apple store a few more blocks down Market.

When I arrived at the Apple store it was buzzing with happy people. A smiling Apple employee was waiting at the front door here as well.

"How can I help you today?" he asked.

"I'd like to buy an iPhone 3G"

"I can bring it right to you - do you know what size and color you want?"

This is a company that actually wants my business. Too bad it is attached to one that doesn't. Like Oscar and Felix, you have to wonder (other than a script writer looking for gags) what makes these two companies able to even stand talking to each other much less trying to offer a joint customer experience.

When I happily walked back to my office, I had to stop at the AT&T store again and wave my new phone at the sullen AT&T employee with the clipboard. In the same amount of time that I would have been sitting on the floor of his horrible shop I had walked to the Apple store, had a great shopping experience, and walked back again.

Memo to AT&T executives -- could you PLEASE learn something from your partner Apple?

Web 2.0 Summit is a Success

2008-11-17T13:29:00.000-08:00

From October 5 through October 7th in 2004 I was at the Hotel Nikko in California as a paying attendee of the very first O'Reilly Web 2.0 conference. It was a fantastic event and got my attention re-focused on a set of technologies and markets that I continue to focus on to this day. At the time I was an entrepreneur-in-residence for Mohr Davidow Ventures but since then I have been a poor struggling entrepreneur and have chosen to hang out in the lobby instead of paying to attend. This year that changed, and I once again paid to attend the now 5 year old Web 2.0 Summit and I am happy I did.

Yes, it is expensive to attend. But overall, there are few better places to check in with the leading change-makers in technology and business. The topics, people, and format all generated a perfect environment for thinking about the coming year and what we have to get done as business people and citizens to improve our companies and the world.

Whether it was Mary Meeker pushing through 50 slides in 20 minutes of her Technology / Internet Trends Report or Shai Agassi explaining how his company Better Place is transforming the way we will use electric cars or the brilliant closing remarks by Al Gore about the election and how the Internet is transforming democracy... Web 2.0 Summit absolutely delivered on the promise that:

"...the leaders of the Internet economy are turning their attention to the world outside our industry. And conversely, the best minds of our generation are turning to the Web for solutions. At the fifth annual Web 2.0 Summit, we'll endeavor to bring these groups together."

They did and I was glad I was there for the event. I'll be a paying attendee again in 2009.

Mashup Camp

2008-11-15T12:28:00.001-08:00

I think there is still room at Mashup Camp in Mountain View this weekend, you can register here: www.mashupcamp.com/mountain-view-november/

They seem to have a great group of sponsors and also have over $9k in prizes, including:

-Amazon Kindle

-Amex Gift Cards

-Dell 24” flat panel LCD monitor

-Macbook Pro

-cash prizes

Hope I see you there!

Aer Lingus Bankruptcy

2008-11-12T09:57:00.000-08:00

Hello Aer Lingus, are you listening? I doubt it. Today you had an opportunity to make me into a huge fan and instead you turned me into a hater. If you'd like to know how customer service can work to make your business loved by customers, go study Zappos and see how a REAL company treats its customers. You guys? Well, you suck.

Sure, you just lost 20 million euros. Sure your staff is all about to go on strike. But maybe your real problem is that you have really lousy policies that demonstrate that you hate your customers!

I booked a flight from Heathrow to Dublin - a route you fly every hour. I happened to get done in London early and came out to the airport early. So I walked up to your ticket counter to see if there was space on an earlier flight. Why yes, there is! In fact there is lots of space! And not just on one flight, but on three flights prior to mine (I am on the last of the day). BUT your policy is to charge full fare -- an extra 150 pounds sterling -- to change!! That is stupid.

You had the chance to delight me by getting to Dublin early, at no additional cost to you. Instead I am sitting in the Heathrow airport, mad at you, vowing never to book on your airline again.

Sounds like you'll lose more than 20 million euros next year. In fact, I think you'll be BANKRUPT. In a bad economy, the remaining customers have choices and they will choose the best airlines - and that is NOT you.

Or you can change! It would be hard, but give it a try.. oh yeah. You aren't even listening.

Well, for the rest of you that are -- take a look at Aer Lingus, they are a great example of what NOT to do.

22 Solid Social Media Examples

2008-11-11T08:29:00.000-08:00

Great article by Peter Kim on Mashable "The 22 Step Social Media Marketing Plan." Peter lists these 22 social media tools and gives concrete examples of companies using them:

Here’s a framework of 22 tools to consider with notable brand examples:

1. Blogs (Johnson & Johnson, Delta Air Lines)
2. Bookmarking/Tagging (Adobe, Kodak)
3. Brand monitoring (Dell, MINI)
4. Content aggregation (Alltop, EMC)
5. Crowdsourcing/Voting (Oracle, Starbucks)
6. Discussion boards and forums (IBM, Mountain Dew)
7. Events and meetups (Molson, Pampers)
8. Mashups (Fidelity Investments, Nike)
9. Microblogging (method, Whole Foods)
10. Online video (Eukanuba, Home Depot)
11. Organization and staffing (Ford, Pepsi)
12. Outreach programs (Nokia, Yum Brands)
13. Photosharing (Rubbermaid, UK Government)
14. Podcasting (Ericsson, McDonalds)
15. Presentation sharing (CapGemini, Daimler AG)
16. Public Relations - social media releases (Avon, Intel)
17. Ratings and reviews (Loblaws, TurboTax)
18. Social networks: applications, fan pages, groups, and personalities (British Airways, Saturn)
19. Sponsorships (Coca-Cola, Whirlpool)
20. Virtual worlds (National Geographic, Toyota)
21. Widgets (Southwest Airlines, Target)
22. Wikis (Second Life, T-Mobile Sidekick)

Definitely worth reading the whole post but also his blog, Being Peter Kim

Obama Already Changing Government

2008-11-06T10:27:00.000-08:00

OK its not working right now, but keep trying it -- Obama's transition team has launched a website -- http://www.change.gov/ which invites all of America to start getting engaged in the work of changing government. I am so glad that the terrific team that Obama put together to guide his online work for the campaign is still hard at work and is already making history with the way this government is going to use the Internet to connect citizens with their government!

HOPE

2008-11-05T14:27:00.000-08:00

This says HOPE to me:

LinkedIn asks that you not use their Apps

2008-11-05T10:19:00.001-08:00

linkedin
Originally uploaded by Ted Shelton

Open letter to Reid:

You know I am a huge supporter, have been a LinkedIn member since you were in private Beta. And you know how eagerly I have awaited the launch of your applications platform.

But I have to say, I keep finding myself saying "what the heck??" when I try to use your product.

I'd like to suggest that you open up a collaborative product development process with your customers to get feedback from the people that want you to succeed on how your product needs to evolve to achieve the promise that it so clearly has but has not yet fulfilled.

This kind of message (see attached) tell me in big red bold type - GO AWAY, DON'T USE OUR PRODUCT.

I don't think that is the message you want to send.

best

Ted

The News Media They are a-Changin'

2008-11-04T10:03:00.000-08:00

(With apologies to Bob Dylan) Inspired by the news this last week that the Christian Science Monitor has become the first of the major US newspapers to end print publication -- don't think they'll be the last...

The News Media They Are A-Changin'

Come gather 'round people
Wherever you roam
And admit that sources of news
Around you have grown
And accept it that soon
You'll be digital to the bone.
If your news to you
Is worth savin'
Then you better start webbin'
Or you'll disappear with a moan
For the news media they are a-changin'.

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the web's still developin'
And there's no tellin' who
will be reportin'
For the journalist now
Will be later a citizen
For the news media they are a-changin'.

Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
The internet has come
And it is ragin'.
It'll soon shake your Windows
And rattle your walls
For the news media they are a-changin'.

Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old print forms are
Rapidly agin'.
Please get out of the new one
If you can't lend your hand
For the news media they are a-changin'.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
Print is
Rapidly fadin'.
And the first one now
Will later be last
For the news media they are a-changin'.

02 (UK) Free iPhones... Hello ATT?

2008-10-31T14:47:00.000-07:00

Thank you O2 for my free iPhone. Yes, you heard me. For a minimum monthly contract of £ 45 the nice people at O2 in the UK will give you a free iPhone. My bill has been more like £ 80 a month with the amount I have been over there, so I happily collected my free phone. I still don't have one here in the U.S. though. Do I really want to commit to another two years on ATT? Maybe President Obama will actually re institute some oversight of the communications industry and ATT will be forced to become more competitive... I think I'll wait and see.

In the meantime, Apple, why can't I take my US SIM card and slide it into that UK iPhone. Did you really have to lock phone serial numbers to particular carriers? Sigh. So now I have to carry two phones EVEN IF they are both 3G iPhones.

Which brings me to my other complaint - why can't the carriers figure out how to let us have reasonable calling rates from multiple countries? Even if I have to have a contract with multiple carriers, my SIM should be "multi-homed" -- registered with each carrier I have a contract with.

Anyone in the telecommunications industry listening?

The Coming Transformation of the Media Ecosystem

2008-10-28T16:33:00.000-07:00

There is a tipping point, as Malcolm Gladwell famously defined it, for the old media world, driven as it has been by advertising dollars. This day of reckoning was coming, no matter what, but now it will be here sooner due to the current economic crises. 2009 could be the first year in a long time with an actual decline in total dollars spent in the US on advertising. And if it is, massive changes will finally take place in the relationship between media, advertising companies, and the public relations business.

Already a memo is circulating claiming that a number of well known print publications are close to failure. Here is a partial list, you'll recognize more than a few: Entertainment Weekly, Kiplinger's Personal Finance, SmartMoney, Men's Vogue, Teen Vogue, Nickelodeon, National Geographic for Kids, Sports Illustrated for Kids.

But the economic pain that publishers are going to experience in the next few quarters is going to bring down quite a few larger publications as well. An analysis of advertising spend as a percentage of GDP over the past 100 years shows that it has fluctuated between 1% and 3% but has been remarkably stable over the past 25 years at around 2% of GDP. This has been over a period when annual GDP has grown from 3.5 trillion to 13.8 trillion dollars (though not as large a growth when inflation is taken into account).

It is clear from the historical record that recessionary periods can put pressure on advertising expenditure both through a decline in the GDP and through a decline in the percentage of GDP spent on advertising. The last time annual Real GDP (which is to say, inflation adjusted GDP) actually declined was the beginning of the 1990s.

As you can see in this graph of historical real GDP by quarter and by year as hard as the early 2000 period was for us in tech, annualized Real GDP didn't drop. In both periods, however, advertising spending declined as a percentage of GDP -- in the early 1990s by .1% and in the early 2000s by .2%. So based on this historical record, media companies should expect a decline in the amount spent on advertising due to the current economic crises, and that decline may be especially severe as Real GDP is likely to fall in 2009.

But something else has clearly been going on in the last few years, even as the economy has been growing, which adds a third threat. From 2004 overall advertising spend as a percentage of GDP has declined by .1% in each year, dropping from 2.4% to 2.0% in 2007. From 2006 to 2007 this meant an inflation adjusted dollar decline in advertising. Arguably this decline is coming as the result of the changing spending habits of corporations within the overall marketing budget. As authors John Deighton and Leora Kornfeld argue in the HBSarticle Unanticipated Consequences

"...the shift from broadcasting to interaction within digital communities is moving the locus of control over meanings from marketer to consumer and rewarding more participatory, more sincere, and less directive marketing styles."

Marketers who are taking this seriously are shifting dollars away from advertising and into more engaging, more direct connection with markets.

If you take all three factors into consideration, a drop of $50 billion on advertising spend in 2009 is conceivable. The actual drop is likely to be less severe, but could be as much as 10% of total spend (which would be about $30 billion). If so, 2009 will be a watershed year for media.

Look at this from the perspective of the complete ecosystem. Tens of billions of dollars reduced from advertising spend means many fewer jobs at advertising companies and perhaps more than a few that fail. The loss of dollars into media companies will reduce the number of journalists, the number of pages, and probably the number of publications. This will then have an impact on traditional PR as there will be fewer journalists and fewer publications to pitch.

All of this is great news for bringing about a new world of direct company-market communications. It will accelerate the realization by companies that they can talk directly to their customers and prospects -- "more participatory, more sincere, and less directive marketing styles."

PitchCamp Winners and thank you to ALL!

2008-10-27T11:15:00.000-07:00

Robert Goldberg and I invested a ton of time and thought into our PitchCamp workshop at Web 2.0 Expo Europe (held in Berlin again this year) but I have to say, it would not have been a huge success (thanks Mike Butcher for saying so!) without the tireless help of numerous others. But before I get into the thank you shout outs I must tell you about the terrific companies that won the arduous pitch process. We had 12 great companies and I think all of them made great progress in their pitches. But here were the judges favorites:

First place -- Wuala

Second place -- YouCalc

And a tie for third place:

Amazee

Plista

SofaTutor

We had an incredible group of judges officiating and I must thank all of them --

Mike Butcher – European Editor TechCrunch

Olivier Creiche – Vice President and General Manager of Europe, Middle East and Africa, Six Apart

Simon Levene – Partner, Accel Venture Partners

Patrick Liechti – Business Development Manager – Web 2.0 Startups, Sun Microsystems

Matt Marshall – Managing Editor and CEO, Venture Beat

Dr. Maximillian Niederhofer – Atlas Ventures

Mehrdad Piroozram – Managing Partner, iSteps Widget Ventures

Jens Redmer – Head of European New Business Development, Google

Carsten Rudolph – Emerging Business Team, Microsoft

Rob Schiller – Investor and Entrepreneur

Reshma Sohoni – CEO, Seedcamp

Yossi Vardi – Investor and Entrepreneur

Part of what made this so much fun was a terrific group of sponsors who provided prizes and sponsored the PitchParty afterwards -- I have to especially thank Ernst & Young, LinkedIn, iSteps, ContentTeam, Hobnox, SixApart, and VentureBeat.

But let me save the most superlatives for the tremendous, astounding, wonderful David Nöel of Hobnox who did an amazing amount of work to bring everything together on the ground in Berlin so that we had a great party and hundreds of happy pitchcampers. THANKS DAVID!

Stealing the Election

2008-10-27T08:32:00.000-07:00

Attention John McCain - take time now to send a memo to all party members. Subject: Don't Steal The Election. Sure, some of us poor losers in blue states think the Republicans have stolen the last two presidential elections. And perhaps Republicans can forgive us for some of these (hilarious) satires of Diebold voting machines in Florida fixed to only record votes for Dub-yah. After all, there were a few inconsistencies. But does the Republican party really think that America is going to stand for this B.S. again? Apparently they do. Reporting on CNN in an article calmly titled "Long Lines, Glitches Reported in Early Voting" CNN's Sean Callebs, Brian Todd and Manav Tanneeru report this frightening comment from a voter in West Virginia:

In West Virginia's Jackson County, there were some reports that voting machines were accidentally recording the wrong vote.

"I went in there and pushed the Democrat ticket, and it jumped to the Republican ticket for president of the United States," said Calvin Thomas, an 81-year-old West Virginian.

Can this really be true? Did 81-year-old Calvin Thomas simply make this up in order to raise the specter of Republican voter fraud? Did CNN report this as yet another example of the "liberal biased media" stoking the flames of unrest against our duly elected representative government?

I certainly would not go as far as Jack Myers who predicts civil unrest and political demonstrations should the outcome of next Tuesday's election be a defeat for Obama. However, I think it is reasonable to point out to the election commissioners of every state that a perception of fraud in this election will significantly damage the faith of Americans and the world in our democracy and undermine our ability to be a positive force for good in the world. As Myers writes:

This time you will be uncovered. While some may try to obstruct the votes of Democratic-leaning segments of society, hundreds of thousands of poll watchers are on hand outside polling places. The Democratic National Committee has lawyers standing at the ready in contested states.

So am I concerned that the election will be stolen? Am I concerned that John McCain, Patriot and war hero, will allow a result to stand which rests upon voter fraud? Absolutely not. If John McCain is elected President of the United States and if John McCain knows that this election was achieved through subverting the democtratic process of this country, I fully expect him to assure his place in our history as a savior of our democracy by standing on stage and telling the American people and the world exactly how the election was stolen and renouncing the results. Note to McCain -- seems like a much easier way to become a permanent positive part of the history of America than trying to turn around this economy!

700 Billion Smiles

2008-10-19T11:17:00.001-07:00

I will reserve judgement on the US Government's $700 billion bailout plan until we see how well it works. But in the meantime there is something that all of us can do which is as important, if not more. I call it 700 billion smiles.

One of the core issues that the economy has is not about money, at least not directly. It is about confidence. I am seeing this issue every day -- your business may not have felt any impact from a slowdown in the general economy, but all this bad news is weighing you down. You might feel depression, anxiety, or just be calmly postponing decisions about purchases or investments -- waiting to see how things turn out.

But those behaviors, compounding across the world economy, are bringing about the recession just as certainly as the shortage of capital for commercial paper.

Optimism is an enormously powerful economic stimulant. Pessimism an equally powerful retardent. What we all need to do is rebuild our own confidence, and help those around us. That is where the smiles come in.

First of all, smiling will make YOU feel better. Really. The corners of your mouth pushing upwards actually tricks your brain into releasing chemicals which improve your mood. Try it.

And secondly, smiling is contagious. If people see you smiling, they will find themselves wanting to smile as well.

It's a powerful tribal behavior which we can tap into and help improve the mood, thereby confidence, and by extension the economy.

They didn't call it the great DEPRESSION for nothing. Now get out there and start smiling!

-- Post From My iPhone

Only 2 Spots Left! (Pitch Camp Berlin)

2008-10-07T15:20:00.000-07:00

Robert Goldberg and I have been working hard to improve and expand the format of our "Pitch Camp x.0" Workshop at Web 2.0 Expo Europe and we have some very exciting updates:

1. Due to demand from entrepreneurs we have expanded the panel of experts that now includes folks from Google, Sun, Microsoft, Accel, Atlas Ventures and more! Check out the expanded session description here http://www.budurl.com/2wx6

2. We have made the format even more interactive. Now each participating company will be pre-assigned one of the panelists as a coach. There will be a hands on session where the coach helps in real time each company revise the pitch. This should get the competitive juices flowing. Other attendees to the workshop will also be assigned to observe the process.

3. We have found thousands of dollars worth of prizes to give away to the winners who will judged by the entire panel of experts. Check out the site http://www.budurl.com/2wx6 for more details on the prizes

4. Every participating company will get a prize!

5. We have a facebook event page, please sign up http://www.budurl.com/eu8v

6. IMPORTANT the deadline for submitting an application to pitch and participate is OCTOBER 11th. Email me to get an application -- tshelton (a) theconversationgroup.com

7. Several companies who are financially strapped have approached us to see if they could participate. We are talking to the O’Reilly folks about the possibility of getting one, but at most two session only passes for 1-2 worthy companies. Not a done deal yet, but we are hopeful. FYI if they become available these passes will only get you into the Pitchcamp Workshop and nothing else. So if your applying to pitch and are operating on a shoestring, in the applications process please let us know your circumstances and we will see what we can do to offer you a Scholarship!

8. PARTY – we are having a special VIP party later Tuesday night ONLY for people who attend the workshop. Details and tickets will be provided at the workshop, but take my word for it… it’s going to be great!

Pitch Camp! Or how much fun can we have in Berlin?

2008-09-30T22:38:00.000-07:00

Are you coming to Web 2.0 Expo in Berlin at the end of the month? If you are, please join Robert Goldberg and I for our October 21st workshop on how to improve the way you tell your company's story to VCs, partners, and the media. Here is the link to the official session description:

http://en.oreilly.com/webexberlin2008/public/schedule/detail/5383

where you will see the great lineup of folks at our panel:

* Mike Butcher – European Editor TechCrunch
* Toby Copel – Managing Director of Europe, Yahoo!
* Matt Marshall – Managing Editor and CEO, Venture Beat
* Mehrdad Piroozram – Managing Partner, iSteps Widget Ventures
* Reshma Sohoni – CEO, Seedcamp
* Adam Valkin – Head of Digital Media and New Business, Endemol
* Yossi Vardi – Investor and Entrepreneur

BUT HERE IS THE IMPORTANT PART -- PAY ATTENTION

Sorry for yelling :-) Robert and I are looking for 8-12 startups that want to participate in the camp as the example companies (anyone can come and participate as an attendee of Web 2.0 Expo). These participating companies get

1) one-on-one coaching by one of our panelists
2) special prizes for participating and even better prizes for being the best
3) oh, and you'll probably improve the way you tell your story to VCs, partners, and the media!

Send an email to Robert -- robert(at)crossroadsvc(dot)com -- if you want to be one of the companies.

See you in Berlin!

Cult of the Professional

2008-09-13T10:42:00.000-07:00

I am certainly not the first person to flip the language of Andrew Keen's 2007 book The Cult of the Amateur: How Today's Internet is Killing Our Culture, and reflect on how he is suffering from, and trying to impose on all of us, the cult of the professional. But I have been recently reminded of how pervasive this cult of the professional is in our society.

In Keen's book we are told that a terrible thing is happening, all kinds of people are connecting to each other online and sharing their views with each other and this "amateur content" is destroying "our cultural standards and moral values." I could, complain about how Keen's view is stuck somewhere in the past, but this pro-establishment view is thoroughly entrenched in our culture and regularly keeps otherwise rational people from understanding the radical reformation of our society that is underway.

In one recent conversation a seemingly well-educated person told me that she only reads reviews of movies in the New Yorker and thinks it is ridiculous that people would trust average people's individuals views on movies instead of a trusting a "professional movie reviewer."

I thought she must be joking, so I laughed... which did not seem to go over well.

So I pointed out that I would much rather have the opinions of other liberal dads with daughters about a movie than some "professional" in New York who I may have nothing in common with and who may be evaluating the movie based on criteria meaningless to me. It was fascinating to hear her angry retort:

"sure, and someday maybe we'll go into a science classroom and anyone who wants to will get up and give the lecture instead of someone who actually knows something about science!"

Wow, I thought. This really misses the whole point. Whether a movie is good or not is about a statement of preference. Sure, a professional videographer might have something to say about the quality of the camera work -- but when I am reading a review, I just want to know whether or not I will have a good time!

So in cases of preference, an "amateur" opinion can be just as (if not more) valuable than "professional" opinion since it may more accurately reflect a view that has relevance for the recipient. So what about cases where opinion is not at stake, where presumably there is some agreed upon "facts?"

Certainly it is true that if I want specific knowledge I want to go to someone whom I trust to have the knowledge -- so in a science class I would want an instructor that has, through some professional process, been certified as having such knowledge... But then shall we leave aside that such certification can be unreliable ?

Which brings up a second dimension -- how does one becomes a professional and be "certified" -- and why do we assume that the way in which "professionals" are certified is better than any other method for identifying experts? It is a testament to how deeply we believe in "professionals" that we want to see an institutional certification and that this is more trusted than recognition from a community.

What I see happening in this "amateur" media is that the audience, instead of editors, are selecting the best content producers. They are recommending the best producers by reading them, linking to them, and recommending them. This does present a challenge when "facts" are at stake -- the writer most preferred by an audience might not be the one who is the most accurate. And it certainly doesn't put any sort of control in place for reviewing material for accuracy.

But this has a way of self-correcting over time. The web provides a platform for debate. Over time on any truly controversial issue, the conversation becomes a bell curve -- advocates on one side and opponents on the other with the bulky middle made up of people who don't really care.

And hasn't that always been true with the "professionals" as well?

Why Obama

2008-08-26T21:29:00.000-07:00

A comment on my blog from Michael asks why don't I blog about why I think Obama is the right choice for our next president. My only problem with doing that is that I can't hope to have enough time to be complete in my post, so if you'll forgive me for missing important points:

(1) America vs. the rest of the world
How do we in America want to play on the world scene? I believe that Barack Obama is America's best chance to re-engage as a partner in solving the world's many problems. During the last eight years we have become an arrogant unilateral military force unwilling to cooperate to solve the world's pressing energy, security, economic and environmental issues. We need a President, and I believe Obama is the one, who can entirely change that equation and demonstrate to the world that we are willing to be a peer and collaborate on solutions.

(2) The War on Terror
I do not agree with the language and the policies of America's unilateral "war on terror" -- I believe that our policies have made us less safe in the world, not more. We need to partner with the rest of the developed world to build up the economies and the opportunities of the poorest people. Social equity and economic opportunity is the best solution to the threat of terrorism. It is a people who have nothing to lose that will throw their lives away against those that they perceive to be tyrants. So help them have something they are afraid to lose. Build up their economies and their lives. Obama offers policies of economic and social engagement with the poorest parts of the world -- and a message of reconciliation and hope that I believe, coming from him, that they will hear.

(3) The growing disparity in wealth here in America
The best America, the strongest America, is the one which has a strong and healthy middle class. Obama is committed to increasing economic and social equality here in the US. I believe that innovation is the key to solving the world's problems and that we need a tax system which encourages and rewards innovation. But we can achieve this goal without gutting the middle class and forcing more and more of our population into the desperation of poverty. In fact, we cannot have a system which encourages and rewards innovation if we end up with a population of haves and have-nots. The greatest strength of our democracy and our economy is the well-educated middle class with disposable income. Obama's policies on taxes, education, and healthcare will reverse the current frightening trends to create a small population of super rich surrounded by a nation of the very poor.

(4) Technology and innovation
More than any candidate Obama understands the importance of technology and innovation - whether it is his support for NASA and manned space missions, his focus on increased competitiveness in telecommunications, his understanding that we must make massive investments in energy innovation, or his recognition that fundamental research in the sciences must not be bogged down by religious bickering - Obama is the one candidate ready to make innovation the centerpiece of the next great age of our nation.

(5) Tolerance of Diversity
Both as a symbol and through the government he will lead, Obama will lead our nation in embracing the most important values that have made us successful over the past 200+ years -- embracing diversity and equality of all people regardless of their beliefs, their gender, their color, or any other way in which we are different.

Like I said, this isn't exhaustive. But I think the two candidates - John McCain and Barack Obama - are as different as can be on the issues that I consider to be the most important facing America and the world -- environment, society, economy, global relations, innovation and technology -- I simply do not understand what causes thoughtful Americans to support John McCain. I know that they do, and I seek to understand. But from my perspective, John represents a set of dead-ends that have been fully played out by the Bush administration. We can all see where these policies lead - and it is not good for ANY American in the long run. Nor for anyone in the world.

We have a responsibility as a wealthy nation to think about the whole planet. Vote for Barack Obama so that there is a tomorrow for us, for our children, and for all of those that will come beyond.

Obama Selects Biden as running mate

2008-08-23T03:38:00.000-07:00

CNN staked out Joe Biden's house and at 8:44 pm EST reported that suddenly the Biden family was under significantly increased police protection. It was probably then that we could have all guessed that Joe Biden would be the next Vice President of the United States -- not withstanding the American electorate losing its mind and electing John McCain in November.

On the subject of John McCain, just a guess - McCain team wrote one press release with the name of the VP candidate left open — then when the announcement came out, inserted Biden's name.

Can't they come up with something more thoughtful than "There has been no harsher critic.." ? I mean, its not even true. Clinton was clearly Obama's harshest critic.

I guess I have lived in California for too long. I just cannot imagine what motivates anyone to believe that McCain would be a good president. And yet there are the polls saying that roughly half of our great nation wants McCain and his promise to:

(1) reduce taxes for the rich
(2) continue to wage war in the middle east
(3) further destroy America's reputation in the world
(4) support anti-competitive policies in telecommunications
(5) restrict research into stem-cells
(6) take away a woman's right to choose in a core issue of her own health and well-being
(7) undermine our basic freedoms

I'd guess I need to try and spend some time hearing why McCain's supporters believe he would be a good leader for our country. For the life of me, I can't understand it at all.

Obama Campaign Responds to Republican Lies

2008-08-15T02:01:00.001-07:00

Today, the Obama campaign released “Unfit for Publication,” a fact-check of the latest Republican attack machine’s book, full of false, rehashed attacks. The report outlines a sampling of the lies, half-truths and misleading statements in the book “Obama Nation,” by Jerome Corsi. It also reports Corsi’s controversial and bigoted comments and his involvement previous smear attacks, like the false swift-boat attacks on John Kerry.

"Jerome Corsi is a discredited liar who is peddling another piece of garbage in order to continue the Bush-Cheney politics he helped perpetuate four years ago. His is one of what will likely be many lie-filled books rushed to print this election cycle that are cobbled together from debunked internet sources to make money and advance a partisan agenda. We will forcefully respond to these smears with all means at our disposal,” said Obama campaign spokesman Tommy Vietor.

Here’s the button you should look for on our www.fightthesmears.com site, which will soon link to the report:

Medieval Pizza Recipes

2008-08-01T00:19:00.000-07:00

Certainly one of the most memorable events of my family's visit to Europe this summer was our stay at Chateau de Matval, a castle outside Vendome (45 minutes south of Paris by TGV). The castle (oh, chateau I mean) has been restored over the past 30 years through the efforts of Bob and Claude Mitrani. The result is truly amazing -- they have made the castle into a home, but kept intact medieval architectural details (including a low stone doorway arch that I conked my head on).

A highlight of our visit was the treat of having pizza inside a 6th century cave, in the original oven and dining room. This room was already old when in the 1700s people were scratching their names and dates into the limestone arches holding up the ceiling. The fire must be built 10-12 hours before you expect to use the oven but once going can cook an enormous amount of food. In fact this oven was used during World War II to cook bread for the neighboring village of Bonneveau.

Sitting inside caves that have been inhabited since the Chateau was founded in 524 AD is an incredible experience, but the rest of the castle is just as amazing as well. The tower is one of the few that exist from the 12th century - many having fallen or been destroyed. Originally this castle likely had four towers and was a traditional square. Other details from the 13th and 14th century including beautiful stone arches have all been restored by the Mitrani family.

Of course the 20th century pool was also nice during the hot afternoons in central France -- all in all a most amazing experience. Bob and Claude have now decided to make their home available for rent during a few weeks of the summer so if you are interested in a chateau for rent at the top of the Loire valley with two of the most wonderful hosts you can imagine - let me know or contact them directly and mention my name. You will have the time of your life!

Complaint Department

2008-07-08T13:19:00.000-07:00

OK - I have now been to Paris twice in the last week without going to Paris. Oh, if you haven't been keeping up with the story, the family is spending the summer in France. I am traveling around different places to work with clients. We just arrived last Friday at CDG and jumped in a car to head to Le Havre, our home for three weeks (a beautiful, wonderful home). So that was my first time in Paris in the last week - and all I saw was freeway as I drove out of town. Then, on Monday, I had to head to Brussels. So I took the train from Le Havre to Paris -- which comes into St Lazar -- then took the RER E line between their and Gare du Nord (entirely underground) and jumped on the train to Brussels. Again in Paris without really being IN Paris Aargh!

But Brussels is nice...

Brilliant move Hillary

2008-06-02T21:12:00.000-07:00

Pundits say she has probably lost her Senate seat in NY, but she continues to have an enormously passionate audience nationwide, and in Puerto Rico where she beat nominee-in-waiting Obama 2 to 1 on Sunday. For awhile, those of us that are novices in the chess game that is power politics, have been wondering why she is still running. Why is she still at it on June 2nd? After the rules committee has already closed the door? Aha! Tomorrow in her conciliatory speech acknowledging that Obama has won the nomination she will ask for one little thing -- the VP slot. And if she does, can Obama deny her that role?

Brilliant.

Its not her first choice certainly. But battling all the way to the convention could lose the race for the Dems AND ruin her chance to run in 2012. Being VP is a heck of a lot better than ending her career. And if she and Barack can win this (and why wouldn't they?) then she is still in line for the presidency -- at least as the favored (undisputed) candidate in 2016.

Good move Hillary.

Obama-Clinton '08 ! OC08

UPDATE: Senator Feinstein begins the drumbeat for a Vice President Hillary Clinton

Peter Hirshbeg

2008-05-31T12:21:00.001-07:00

Peter Hirshberg
Originally uploaded by Ted Shelton

Photos are now going up on Flickr -- over 600 of them -- from our May 29th event "There's a New Conversation" -- click here -- eventually I will cull through them and make a photo album of the best. Like this one of a thoughtful Peter Hirshberg preparing his presentation.

Industrial vs. Social Production

2008-05-22T10:17:00.000-07:00

In a recent TED Conference talk, law professor Yochai Benkler speaks on the topic "open-source economics" and makes the compelling argument that

collaborative projects like Wikipedia and Linux represent the next stage of human organization.

The heart of Benkler's argument is a distinction he makes between "industrial production" and "distributed production" and "social production." The impact of the transition that Benkler describes reaches far beyond "open source."

In fact I believe that the shift that Benkler describes is also at the core of understanding the way in which business will change over the next decade.

Soho Engineering Works

Scottish inventor James Watt filed a patent in 1769 for a steam engine. His company, Soho Engineering Works, is often cited as a landmark on the map of events that brought about the "industrial revolution."

This progress began to accelerate about 150 years ago when the steam engine began to find broad application in transportation and power generation. Mass production, mass markets, and mass media all grew up around this set of technical advances.

The challenge of the modern corporation in the twentieth century was one of coordinating large numbers of resources (people, equipment, capital) by aggregating those resources under the control of a small number of individuals who could direct those resources toward a specific end (you know, capitalism).

Along the way we had to develop hierarchical organizational structures, operational efficiencies to simplify and standardize the role of labor, eliminate differences in products to achieve economies of scale in manufacturing and distribution, and invent a marketing methodology that delivered a simple message to the largest number of people through an increasingly consolidated set of media outlets (you know, industrial production).

And we think of the world that Watt created as being "normal."

How to stop worrying and learn to love the Internet

1) everything that’s already in the world when you’re born is just normal;

2) anything that gets invented between then and before you turn thirty is incredibly exciting and creative and with any luck you can make a career out of it;

3) anything that gets invented after you’re thirty is against the natural order of things and the beginning of the end of civilisation as we know it until it’s been around for about ten years when it gradually turns out to be alright really.

With a nod to Dr. Strangelove, the late Douglas Adams penned an article for the News Review section of The Sunday Times all the way back on August 29th, 1999 entitled "How to Stop Worrying and Learn to Love the Internet." Like Strangelove's bomb, Adams sees the Internet as a challenge to us on how to adapt to a world which has suddenly and forever been fundamentally changed by technology. Its funny to read, as Adams always is, but it would be funnier if we had all already understood the core message of change that the Internet brings and shown some adaptability.

Far too many of us still believe that the industrial world is normal. In fact it was a brief episode in human evolution. It expresses some of the best and worst of what is possible in moving from tribes to global civilization. And its undoing actual began long before the Internet -- which is to say, like the 80 years that passed between Watt's patent and the real take-off point for the industrial revolution, the technology to bring about the next major economic, social, and political force has actually been at work for decades. The Internet (and the web in particular) is the tipping point -- the application of this new technology into a product that will transform instead of merely change incrementally.

The Magic of Coordinating Distributed Production

But many people miss WHY the Internet is so important. They focus on how it "disintermediates" existing markets but this is a symptom not a cause. Some focus on how it "levels the playing field" making it possible for small companies to compete against large ones or individuals to have a voice -- also a symptom. The really important change is in the way in which resources are coordinated.

In an industrial production model, coordination of resources was dependent upon people managing and overseeing the investment, labor, or other resources. But three things have changed this -- virtually free computation, data storage, and network bandwidth. Now we can put the algorithm in charge of coordinating distributed production.

How does this change things?

Each of us have a capacity to produce -- money, data, ideas, opinions, observations. That production can be quickly and easily harnessed via web applications, and then coordinated across all like producers to achieve outcomes that no one person could ever achieve.

A simple example of this is the website "FreeRice" which aggregates attention and cash and converts the two into donations of rice to the UN world hunger program. The site was created by programmer John Breen who was interested in helping his sons study for their SAT college entry exams. So he created a site that provides vocabulary challenges. In exchange for each correct definition 20 grains of rice are donated. These donations are funded by advertising (currently Unilever is promoting their partnership with the World Food Programme) .

So what is happening here? The value to someone (in this case Unilever) for a moment of your attention is worth approximately 20 grains of rice. Alone these pennies of value for your attention and my attention are difficult to do anything with. It is difficult for Unilever to find an efficient way to spend that little money at a time. It is difficult for anyone to do anything with that little. But John Breen, by creating this point of coordinated production called FreeRice, gives Unilever an efficient way to aggregate enough attention to be worth their time (and money) to spend to attract that attention. And the output of that attention, the aggregate of all those pennies for attention, is large enough to make a real difference in the world.

32 Billion grains of rice donated in the first six months.

What does this mean for you?

Start applying the following question to the things you want to achieve -- in your business, in your community, and in your life -- how can you use the Internet to coordinate production to more rapidly attain your objective?

This has a set of questions you need to ask in order to be successful. Here is just a beginning: What is the resource you wish to coordinate? What is the right way to engage the people who have that resource? How will you promote this amongst the various participants? What are the component parts that you need to build, buy, borrow? Who will partner with you to make this possible?

How do I get started?

Watch Benkler's speech for yourself:

Getting to London the hard way

2008-05-07T00:23:00.000-07:00

Denver used to be an important international hub for United Airlines. After today I have the clear sense that it has become an important regional hub, but is no longer a major starting point for international flights...

I made the mistake of booking my London travel through Denver. Why? Because they could guarantee me an upgraded seat into business class (you know - lie flat across the atlantic). Since I am err.. was going straight into meetings in London, sleeping on the plane seemed key.

But first our flight was delayed out of SFO. Then there was some "microburst" activity on the ground in Denver. So I missed the connection. And the next flight to London out of Denver is 8:20 pm the next day. Thats right, one per day.

So I had to get myself out of there -- Here is the crazy routing that still gets me in on the 7th (yes, it took awhile to sort this one out). Denver to Chicago. Chicago to Washington Dulles. Dulles to London. I get in at about 10:00 pm on the 7th.

Total elapsed time - almost 24 hours. Four separate flights. The beautiful insides of SF, Denver, Chicago, Washington, and of course London terminals.

Anyone want to bet on where my luggage ends up?

May 29th - There's A New Conversation Palo Alto

2008-04-15T05:50:00.000-07:00

Announcing the second in the series! We are bringing our celebration of Cluetrain at 10 to Palo Alto -- Graciously hosted by SAP at their offices just off of Foothill Expressway.

We have expanded the format from the February in New York event to respond to the many requests for more networking time and more discussion time. The full day event (including cocktail reception afterwards) will now include both presentations and breakout sessions for discussion with all attendees.

This larger format is more costly to produce, and so the fee for attending the event will be $185 (continental breakfast, lunch, and cocktail reception are included). But until May 10th you can register for an "early bird" rate of just $95

More on the event:
Ten years ago, four authors came together to start a new conversation about marketing. The result was a book called The Cluetrain Manifesto and with it, Chris Locke, Rick Levine, Doc Searls, and David Weinberger nailed 95 Theses on the door of the Internet and challenged us all to wake up to a transformation underway in how companies and people engage in markets. Looking back over the past ten years we have learned a lot about what happens when mass markets adopt collaborative online communities and it is time to revisit this vital document that played an important role in starting a new conversation about what it means to be a marketer. What have we learned? What was right and wrong? What was left out that we should have been thinking about? What should we be thinking about for the next ten years?

* Doc Searls, co-author of "The Cluetrain Manifesto" and fellow at Harvard's Berkman Institute
* Peter Hirshberg, Chairman of the Executive Committee of Technorati and Chairman and Partner at The Conversation Group
* Jeremiah Owyang, VP, Principal Analyst, Forrester Research
* Deborah Schultz, independent social media expert

Register for our May 29th event in Palo Alto CA at http://conversation.eventbrite.com/

The Social Hub at Web 2.0 Expo

2008-04-09T21:20:00.000-07:00

The Conversation Group is producing a blogger lounge at the upcoming Web 2.0 Expo in San Francisco -- if you are in town, I hope you'll join the fun. Space is limited so you'll need to register at

http://blogtropolus.eventbrite.com

Here is the official information:

Blogtropol.us is the dedicated media and networking lounge for bloggers, content producers, and journalists during Web 2.0 Expo 2008. In a private suite, in the middle of the conference action, Blogtropol.us is designed for you to host and share conversations among digital influencers – both online and offline.
Open to all digital media-makers attending Web 2.0 Expo, Blogtropol.us is the exclusive venue for creating media and discussing conference happenings. Daily live streamed and on-demand video shows will be broadcast to cover the most important conversations of the conference for online discussion and sharing.

CONNECT: Free bandwidth, power, workstations and superior Internet connectivity provided
RE-CHARGE: Food, refreshments, beverages, and afternoon happy hour
RELAX: Daily yoga sessions and chair massages
FOLLOW: @blogtropolus on Twitter to keep up with all of the Blogtropol.us and Web 2 action, as it happens

Blogtropol.us is brought to you by: Snap, Mzinga, Something Simpler Systems, BottleNotes, Pandora, Socialtext, Radian6, Elephant Pharmacy, and CNET Webware.
In order to participate you must have a Web 2.0 Expo Pass or conference pass AND you must register for the lounge at - http://blogtropolus.eventbrite.com. Space is limited!

Destroy the Democratic Party

2008-03-27T13:06:00.000-07:00

This meme is really taking off. Already Google has indexed about 26,200 results for a search on

"destroy the democratic party" +obama +clinton"

Google Blog Search (not always the best source...) has 118 results from this query in the last month, and only 2 more if you expand the scope of the search to "all time." 7 of these results are from the past day -- making a monthly average something over 200, so the meme may still be seeing acceleration.

What has everyone upset? Number one is the idea that the super delegates will select the nominee, against the clear majority expression of will by the direct electorate. As one politically connected friend of mine recently said "that would tear the party apart, like the whigs being destroyed by disagreement in the mid 1800s." I don't believe he was connecting the debate of that time (over slavery) to the debate today (also with a racial component). But it was an interesting point about how deep differences of value can bring to an end institutions which have otherwise stood the test of time. While not as long-lived as the current Democratic party (there have been others), the Whig party lasted a long 23 years -- for some voters it existed during their entire lifetimes at the moment of its destruction.

In case you have been hiding under a rock, but somehow read my blog, the latest in this debate is the entry of Nancy Pelosi into the fray. Through her media representative, her position was clarified quite clearly today:

"The speaker believes it would do great harm to the Democratic Party if superdelegates are perceived to overturn the will of the voters," Daly said. "This has been her position throughout this primary season, regardless of who was ahead at any particular point in delegates or votes.”

This was partially in response to a set of big wheel donors who sent a letter to her stating, in part, that superdelegates "have an obligation to make an informed, individual decision about whom to support and who would be the party’s strongest nominee."

The debate about super delegates is of course a veiled debate about Clinton vs. Obama -- sort of like a war in Korea or Vietnam, its a proxy war for the bigger issue. The saddest part of this process for me is in watching the Clintons entirely deconstruct. How does it remain a rational position to say that Obama is not ready for the White House given the broad support he has received from other politicians and from the electorate? To continue this petty and self-serving argument merely reduces Hillary Clinton to the position of spoiler.

Vertical Search = Vertical Market

2008-03-24T19:48:00.000-07:00

"Watch Out Google, Vertical Search is Ramping Up!" shouted a September 2006 headline in Read/Write Web. According to the "experts" we were going to see a rising tide of vertical search products like Technorati, pluggd, retrevo, zoominfo, and Farecast taking market share from mass market Google. But by the beginning of 2008, Read/Write Web was instead describing Vertical Search as limited to "...the search space that Google has not yet grabbed..." So what happened?

I have been reading about the panel on vertical search at the SES conference in New York. Bill Tancer (Hitwise) points out that search is increasingly dominated by Google:

- 66% Google,
- Yahoo 21%,
- MSN 7%
- Ask 4%
- Other 2%

And Google has been doing a great job putting "vertical search" content into its search engine. And so a lot of searchers are going "from search engine to search engine."

The result of this is that many of these vertical search engines receive an enormous amount of their overall traffic from Google (their supposed enemy). These "pass-through vistors" have not learned to go to the vertical search engines, but start with Google, end up at a vertical search location for the results they want, and then move on to their destination -- never developing a relationship directly with the vertical search engine.

The really interesting unanticipated consequence? Vertical search companies are being lulled into believing that there is a mass market audience for their vertical search products. This skews expectations and business model -- making these companies think that this pass-through traffic, which represents the larger share of their page views, is also the most valuable part of their traffic.

Instead, I believe that these vertical search companies would do much better to focus on the dedicated repeat visitors -- the vertical MARKET that their vertical search capabilities appeal to, and to find ways to serve that core repeat audience and not the fickle pass through audience that comes from Google.

Once a vertical search company has focused on their core audience, there are a set of very different decisions they will make about the features and core capabilities to invest in from an engineering perspective. And a very different set of revenue opportunities to explore.

In the end, Google is going to do a great job in virtually every vertical search category for the "casual" searcher. Differentiating from Google is going to mean focusing on the needs of a particular vertical user, not just carving out one data type to index.

Say it Aint so Joe

2008-03-22T12:32:00.000-07:00

Publications as mainstream as Time Magazine have begun referring to Senator Joe Lieberman as a possible running mate for Republican John McCain. Is it really true? Could Joe Lieberman really be considering shacking up in the White House with the conservative agenda's best bet for holding on to the presidency? In the immortal words once spoken to Shoeless Joe Jackson, "say it aint so Joe!"

Let's get this straight. John McCain believes (from his campaign website) that

"...Roe v. Wade is a flawed decision that must be overturned..."
"...the institution of marriage is a union between one man and one woman..."and that it should be "...a federal crime for researchers to use cells or fetal tissue from an embryo created for research purposes..."

And let's not forget that this is the guy that goes around singing "bomb, bomb, bomb, bomb Iran."

The scary possibility is that Joe Lieberman with be the nadir this year, instead of Nader -- handing center of the road voters to the conservative coalition and dooming our country to at least four more years of horribly misguided policies, further damaging our reputation in the world, and further eroding our economy.

SAY IT AINT SO JOE

TED: Also a great conference

2008-03-18T07:39:00.000-07:00

No the TED -- http://www.ted.com conference is not named after me, but instead stands for Technology Education and Design. For the past month I have been taking advantage of the incredible gift that TED has given all of humanity (or at least that portion that has Internet access and understands English) by making years and years of their conference talks available as podcasts.

To say that the speakers at TED are amazing wouldn't do justice to the incredible breadth of knowledge and depth of experience that these remarkable people have achieved and are able to share through engaging presentations. Must see TV for any curious person -- it almost doesn't matter which 20 minute talk you choose. They are all hidden treasure waiting to be discovered.

What I have been doing is downloading them to my iPhone and listening to a few each day during my morning run. Sometimes I have to stop and switch to the video, as the visual elements are often amazing -- but mostly I just listen. And then go on thinking about the ideas for days.

Highly recommended!

Congratulations Obama (or - why isn't this over?)

2008-03-12T08:21:00.000-07:00

Let me make a bold statement. Obama has won the Democratic nomination. With his latest wins in Mississippi and the Texas Caucasus, Obama now has (ignoring "superdelegates") 161 more delegates than Hillary Clinton. The number of delegates at stake in Pennsylvania is 188 -- so Hillary Clinton would have to win almost 100% of the vote to pull ahead of Obama. That is not going to happen. Even if Clinton has a two digit lead (and polls do show her as ahead in that state) she is unlikely to close the gap by more than 50 delegates, leaving Obama with a comfortable 100 delegate lead of Clinton going into the convention.

No wonder the Clinton camp would like to bring Florida and Michigan back into the fold. And how stupid it was of the Democratic party to try and disenfranchise these voters! But any attempt to take the results of the February primaries and apply them to the current situation will be as severe a miscarriage of our representative democratic process as if the super delegates were allowed to chose the Democratic party nominee.

There are only two options now for the DNC -- award the nomination to Obama or rerun the primaries in those two states. How terrible for our nation that we will waste $30 million on this exercise. Michigan, by the way is 156 delegates and Florida is 210. So if you combine those two with the 188 in Pennsylvania, there are a total of 554 delegates at stake. Clinton would have to win 162 more than Obama. As close as each of these races has been, do YOU think you would win that many more? Is this worth $30 million that could be used for education in our public schools?

Video from Austin (SXSW)

2008-03-08T13:37:00.000-08:00

The team from The Conversation Group is on the ground here in Austin and filming all over the conference and all over town! Our goal is to bring you a taste of what it is like here at the SXSW interactive conference -- our partner Pure Digital provided us with the wonderful Flip video cameras and we have been putting them to good use on our new site, This is SXSW.

The lastest video, which I am just posting now, is a rundown on what happened this morning in the session on what teens want from their phones and from the Internet -- attendees couldn't get enough of these 16 and 17 year olds talking about how they are experiencing the world through all of this participatory technology. Check out Jim Hirshfield's summary --

http://blip.tv/file/727459/

NPR, Ken Stern, and the local stations

2008-03-07T17:34:00.000-08:00

I was going to write a short blog post about why I no longer contribute to KQED (the local bay area NPR station) and why Ken Stern is right and the board who threw him out was wrong... but then Jeff Jarvis does such a good job:

Well guess, what, local yokels, hate to tell you this but… You’re screwed! You bet the internet is going to hurt you.

So, not today. Maybe not this year. But really soon now people in the economic bracket that traditionally has supported local public radio will all have the ability to get exactly the programming they want, when they want it, where they want it. And it will be integrated into our cars along with the traffic that is already there on the GPS.

Sure, it will actually probably take 5 years until the "tipping point" -- but why should any of us be supporting radio tower infrastructure? I want to directly support the programming, not the distribution mechanism.

NPR wake up or you will just be replaced by the creative destruction of the Internet.

Best comment of the evening (supernova)

2008-03-06T18:39:00.001-08:00

Best comment on the evening during Jerry's discussion on Business in the Networked world for the Supernova mixer:

Advertising is transactional

commercial success is persistent

this creates a conflict

For me this offers a great insight into the potential hazard for marketing professionals -- excluding brand campaigns, a lot of advertising as a medium leads you to think about the transactional impact -- am I going to get more people to buy the product? But you can do so in a way that overlooks the long term -- persistent relationship -- aspect that ultimately determines commercial success.

I was just advising a client today on why NOT to do an email "blast" as part of his company's online marketing campaign. If you look at the activity from a purely transactional perspective you could conclude that if X number of people purchases from the email, the expense of the campaign is covered and the activity is justified.

But if you put the "blast" into the context of developing a persistent presence in a market and a set of relationships in that market, the negative long term effects of being perceived as spammer that sends unsolicited mail could have a much greater negative impact than the transactional value of those one time sales.

This certainly isn't an indictment of all transactional advertising -- but perhaps opens the door to an economic analysis that includes the persistent relationships that a company ultimately is dependent upon for its long term success.

Natural Cost (Supernova conversation)

2008-03-06T18:17:00.000-08:00

Jerry Michalski just made a great point about looking at "natural cost" -

"The fear that Craigslist should be putting in the hearts of classified and Yellow Pages execs worldwide is: what if the "natural cost" of delivering local ads and fostering local markets is incredibly low? If you don't have operators on duty to transcribe (and misspell) ads and if you don't print on paper and haul it all over the place, you can afford to charge only one kind of advertiser -- say, companies placing want ads -- and have that pay for the rest and spill money out the other end.

And that's just classifieds. In Ads and Google we theorized about how Google might just be able to fund major communication infrastructure as a by-product of its core business (which, notably, is also self-serve advertising). What's the natural cost of telecommunications? Customer service? Other sectors?"

http://www.yi-tan.com/wiki/yi-tan/whats_the_natural_cost

Supernova Wharton - Business in a Networked World

2008-03-06T17:37:00.001-08:00

Supernova Wharton - Business in a Networked World
Originally uploaded by Ted Shelton

Jerry Michalski speaking at the Supernova Wharton San Francisco Mixer. The conversation starts with -- are you optimistic or pessimistic about the future of these social technologies.

Good arguments on both sides -- interesting pattern of agreement that if we can't find information on people through social networks -- we worry. There is (for this techno-connected group) a red flag on people who do not have a healthy online presence.

Supernova Discussion at Wharton West

2008-03-06T17:14:00.000-08:00

The Supernova Wharton San Francisco Mixer gets started in a little while but the starting point is a choice between two great talks and I am finding it hard to chose between them -- Jeremiah Owyang leading a discussion on Social Graphs and Jerry Michalski on Business in a networked world... I guess I'll pick Jerry and try to catch Jeremiah during the cocktails afterwards.

Kindle Comments (Amazon Kindle)

2008-03-03T15:13:00.001-08:00

Yes, I did. I bought a Kindle (Amazon's e-book reader) and I love it. The other day, in the "sleep" mode, the kindle had a message asking for feedback and providing an email address. I sent my comments but never heard back -- so I don't know if my comments failed to reach a human being, or if they have no mechanism (human or otherwise) for responding... Rather than lose the opportunity to have a conversation with the Kindle team, I decided to post my comments as an open letter -- I'd also love to hear what other people think of their Kindles...

Kindle team:

Thanks for a great experience overall - I am really enjoying my kindle.

I doubt I will say anything that you haven't heard, but here goes:

1) A number of navigation elements are non-intuitive -- in particular the idea of forward and back -- in my mind on a device this is firmly routed in web browsing -- so I expect to go "back" to what I was doing, not the linear "back" of a page turn. For example, if I leave a document to look up the definition of a word, I then want to go "back" to where I was just reading

2) The lack of page numbers is frustrating -- it would be nice if there was some corollary in your book formatting to page numbers so that if someone says "look at page X" then I can get there even though the electronic pagination is different from print pagination.

3) If images are removed, it would be nice to see it noted in the text that in the original book there was an image

4) I canceled my subscription to the NY Times because it is too frustrating to read. Part of that is the news is too old (I am a web junky so last nights news is stale) but part of it is formatting. I hate reading an article and then going back to the list of articles from the beginning to start scanning again for something I want to read. I figured out the trick of jumping to a 'location' but this is an unwieldy hack, forcing me to remember to jump to "78" the entire time I am reading

5) I'd pay to read email on this... of course then I'd want to reply as well :-)

6) I haven't stopped looking for the clock. Why do I have to look at a different device to see what time it is?

keep up the great work!

MSN Fakes It

2008-03-02T06:20:00.001-08:00

MSN Fakes It
Originally uploaded by Ted Shelton

Who is the terrible advertising person working for MSN? Or the stupid people approving the ads? In this billboard ad (seen on the Bay Bridge approach in San Francisco) MSN announces "There's no way you can know everything. But you can fake it." I'm sorry, what is it that MSN thinks is a good idea? Being a know-it-all? Faker? Or is this self-descriptive? Google may have the best web index, but MSN does a good job of faking it? What does MSN even stand for anymore? Is it an AOL style walled garden? Is it a jumble of content destinations? Is it a search engine? An ad network? Actually, maybe they are faking all of these things.

Doc Searls at There's a New Conversation

2008-02-26T07:30:00.000-08:00

The video of Doc Searls' presentation at our New York event on February 13th, 2008 is now live! Go to our site on blip TV to view -- The Conversation Group Videos. Doc talks about the origins of Cluetrain, how the ideas has developed over the past 10 years, what the next 10 years will bring, and about his current research work into what he calls "vendor relationship management" (VRM).

You can also listen to the audio which is available on our iTunes podcast

The Conversation Group Podcast

We will be working to get the other speaker's presentations up as video and audio soon!

Jake McKee, formerly of Lego

2008-02-25T11:16:00.001-08:00

Jake McKee, formerly of Lego
Originally uploaded by HowardGr

Jake McKee is a terrific speaker, and gave a wonderful presentation in New York at our "There's a New Conversation" workshop. The video of his talk will be up soon, but in the meantime we have posted an interview with him conducted by Blog Talk Radio's John Havens. Visit our website for the ongoing event series at:

Cluetrain at 10 -- http://www.cluetrainat10.com

Conversations on Social Media

2008-02-19T18:03:00.000-08:00

Its happened! I have done my first podcast. Check out the results -- Conversations on Social Media. It sort of happened by accident. I was talking to a bunch of people about whether or not companies should start their own social networks or join existing ones. Jeremiah Owyang suggested it would make a great panel discussion and suddenly we were recording... along with Chris Heuer and Brian Oberkirch!

Doc Searls at There's a New Conversation

2008-02-13T20:05:00.001-08:00

Doc Searls
Originally uploaded by HowardGr

Great conversation going on in NYC today at The Conversation Group's event "There's a New Conversation" -- celebrating 10 years since the origin of The Cluetrain Manifesto.

Watch our new site -- http://www.cluetrainat10.com

We'll be posting video soon of the event!

New York Slush

2008-02-12T18:52:00.001-08:00

New York Slush
Originally uploaded by Ted Shelton

Don't let the slush stop you from coming! Or if you can't come to "There's a New Conversation" tomorrow in NYC, don't worry as we will be recording Doc Searls and everyone else talking about the 10 years since the publication of The Cluetrain Manifesto and putting it on the web.

Not too late to register though if you aren't afraid of the slush:

http://conversation.eventsbot.com

There's a New Conversation

2008-01-26T12:58:00.000-08:00

Ten years ago, four authors came together to start a new conversation about marketing. The result was a book called The Cluetrain Manifesto and with it, Chris Locke, Rick Levine, Doc Searls, and David Weinberger nailed 95 Theses on the door of the Internet and challenged us all to wake up to a transformation underway in how companies and people engage in markets. Looking back over the past ten years we have learned a lot about what happens when mass markets adopt collaborative online communities and it is time to revisit this vital document that played an important role in starting a new conversation about what it means to be a marketer. What have we learned? What was right and wrong? What was left out that we should have been thinking about? What should we be thinking about for the next ten years?

Join us in New York City on February 13th for the first in a series of events this year which will reflect on the 10 years since the publication of the Cluetrain Manifesto.

Doc Searls, co-author of "The Cluetrain Manifesto" and fellow at Harvard's Berkman Institute
Ted Shelton, partner at The Conversation Group
Josh Bernoff, Senior Analyst, Forrester Research
Thor Muller, CEO of Get Satisfaction
Jake McKee, Principal at Ant's Eye View, and past Global Community Relations Specialist for the LEGO Company

Sign up here --> http://conversation.eventsbot.com/