December 13, 2012

Latest trends powering the Innovation Economy


Tony Perkins, organizer and founder of the Venture Summit Silicon Valley.

Target audience: Startups, mature businesses, technology innovators, funders and venture capitalists, marketers.

JD LasicaI‘m just back from the Venture Summit Silicon Valley (“where Big Ideas meets Big Money”). And so here’s a short report from the frontlines of the key players — entrepreneurs, firms and investors — powering the Innovation Economy.

“There is no little kid hoping there’ll be a laptop with Windows 8 under the Christmas tree.”
— Jay Samit of ooVoo

Let’s start with this Flickr set of 51 photos — you’ll recognize some of the speakers, like TechCrunch founder Mike Arrington, AlwaysOn founder Tony Perkins (the conference’s impresario) and other notables from the tech world.

The 250 to 300 folks who turned out at the Ritz-Carlton in Half Moon Bay were a mix of business executives, VCs and startup founders. I was here to report some highlights for Socialmedia.biz as well as to soak in some wisdom around social data for the geolocation start-up I’ve begun working on, Placely. Continue reading

June 14, 2012

Brands: How to cut your exposure to Facebook business risk

Will Facebook stick to its core competency or be waylaid?

This is third of a three-part series on Facebook as an investment. Also see:
Facebook’s biggest barrier to enormous wealth? Trust
Facebook will remain king, but social pure plays will fade

Christopher RollysonMany brands are boosting their investments in social business platforms like Facebook, Twitter, YouTube and Pinterest with every passing quarter, but CMOs are too often focused on next quarter’s numbers. They fail to insulate themselves against platforms’ business risks. Facebook’s IPO will likely cause the company to change its behavior in surprising ways, and without warning, by changing its policies and features. Here, I’ll address how brand executives can insulate themselves from Facebook’s — or any platform’s — fortunes by moving to make their relationships and networks portable.

Seeing beyond the platform

Pure play firms like Facebook, LinkedIn and Twitter have defined language, behavior, features and the very concepts of digital “social networks,” but they are quite expendable when brands manage their investments appropriately. However, brand leaders need to follow the digital ecosystem closely and be ready to adjust quickly.

Here are some principles for avoiding surprises. Specific action steps follow.

Assume pure plays’ gradual obsolescence

Watch the ecosystem’s major players, and the interactions among them, but the trend will be specialist sites maximizing value from “social networking” and fading dominance of pure plays. The latter will continue to exist, but they will not maximize value because they are designed for “socializing” (which people can’t resist), not doing things. Moreover, I use “ecosystem” intentionally because it indicates a pervasive, real-time network that increasingly interoperates. Because it’s digital, it’s more dynamic than any human market we’ve ever experienced. Here are brief comments on some of the players:

Buying RIM won’t help Facebook enough to warrant the distraction — not even close.

Facebook is so entrenched globally that it may remain the dominant general social network for many years. However, there is a big caveat. Facebook’s management team looks like it’s losing focus due to the IPO and too much time with Wall Street bankers. It’s “using the money it raised” for M&A, purportedly considering entering the hardware market (buying RIM). If Facebook’s management team and core competencies included M&A (like, say, Cisco), I would be confident. But they don’t. If Facebook buys RIM, I would seriously question Facebook’s medium-term relevance and long-term survival. Making phones will not help Facebook sell more mobile advertising. Not even Apple’s best-in-class iPhones will likely display much advertising due to user backlash. The device wouldn’t help Facebook enough to warrant the distraction — not even close. Continue reading

June 13, 2012

Facebook will remain king, but social pure plays will fade


Facebook collage by Jennifer Daniel

Look for the rise of sites with deep social features

This is second of a three-part series on Facebook as an investment. Also see:
Facebook’s biggest barrier to enormous wealth? Trust
Brands: How to cut your exposure to Facebook business risk

Christopher RollysonFacebook will remain the dominant popular social network in many markets for many years, and it won’t have to worry about being “displaced” by another social network the way that it displaced MySpace. In the near term, this lack of competition will give the company some breathing room, but a more daunting threat awaits: the waning of social network pure plays’ influence by 2017. Nonetheless, the fate of pure plays should be top of mind for serious Facebook investors: to produce the fabulous returns that current investors expect, Facebook will have to move far beyond adverts.

In part one of this series, I argued that Facebook had a significant trust gap with users that would inhibit its ability to monetize its most unique and valuable assets, and that the trust gap was recently compounded by its “IPO irregularities.” Below I’ll take a different tack and analyze the investment prospects of Facebook the platform.

Social networks’ disappointing investment results

Pure play social networks (Friendster, MySpace, Facebook, LinkedIn) have not lived up to investors’ ROI aspirations, despite the fact that people (‘users”) have loved the networks and lavished mind-boggling amounts of time on them. The Web 1.0 logic behind investor expectations held that the more time people spent on the sites, the more ads they would see and the more they would click. #fail

In retrospect, it is understandable that pure plays’ management and investors didn’t appreciate social networks’ social context. It turns out that very few people understand the intricacies of “sociality,” much less how to wire it into a value proposition or a business ROI. Continue reading

June 11, 2012

Facebook’s biggest barrier to enormous wealth? Trust


Image by RedKoala on BigStockPhoto

 

Why Facebook will find it hard to monetize the social graph

This is first of a three-part series on Facebook as an investment. Coming up:
Facebook will remain king, but social pure plays will fade
Brands: How to cut your exposure to Facebook business risk

Christopher RollysonIf Facebook’s stock price were based on the number of blog posts about its IPO, the company would be in great shape, but too few posts have addressed Facebook’s real barrier to monetizing its business, so we will rectify that here. 

Although Facebook is a fantastic social venue and platform, I did not buy into Facebook and do not plan to invest in its stock. (The stock price is down 30 percent from its debut on May 18.) Facebook‘s Achilles heel is a significant trust gap with its users, and now, its investors. Its trust gap will make it difficult for Facebook management to fully monetize its most unique asset, its users’ social graph data. Moreover, the management team has not shown the insight or willingness to address this barrier.

Why lack of trust is Facebook’s Achilles heel

That Facebook has a spotty trust profile with users is an understatement. Its management has a history of being cavalier with users’ data. Although many have argued this point, I’ve observed that Facebook’s policies have been mostly legal, but trust is independent of legality. Facebook’s management has gotten better about “considering” users during the past year or so, but such consideration has felt compliant and not entirely voluntary.

This matters. Although I have no inside information about Facebook’s technology or strategy, my knowledge of user social data and its value in developing relationships leads me to deduce that Facebook’s gold mine is its unique knowledge of users’ social graphs. Just play around with Facebook ads. Only Facebook knows what California physics undergrads prefer in music, movies and running shoes. Who their friends and hobbies are, and when they post their running updates. And what moms with 3.2 kids who went to Berkeley think about whales or global warming or Republican budget proposals.

When users discover how Facebook intends to use their personal information, they will see red. This is Facebook’s biggest risk.

The problem is, although I’m sure Facebook has employed some of the best attorneys for a long time, and user agreements give Facebook the “right” to use social data however they want, we have all witnessed that users themselves revolt when they perceive that they have been duped. And when they discover how Facebook intends to use their personal information (that they have willingly, if ignorantly, surrendered, by the way), they will undoubtedly see red. This is Facebook’s biggest risk. It’s not a legal issue, it’s a trust and relationship issue. Continue reading

April 29, 2009

Web 2.0 investment strategy

Outperform rivals by using Adoption Cycle

Christopher S. RollysonIn the Web 2.0 Adoption Curve, I asserted that executives had a career-defining opportunity to leapfrog competitors by using risk management to manage through the Web 2.0 adoption cycle. The cycle will also feature a backlash against—and investment gap in—Web 2.0 beginning next year.

Here I’ll discuss in more detail how to avoid the downdraft and outperform competitors over the next several years. Web 2.0 will transform organizations and society because it changes how people discover, build and maintain relationships. All organizations need to understand these dynamics, so they can become stronger and more relevant.

Continue reading

April 18, 2009

Web 2.0 Adoption Curve, 2009-2015

A blueprint for social networking investments

Christopher S. RollysonWeb 2.0 and social networks have gained perceptible mindshare during the first quarter of 2009, and conversations with clients, fellow speakers at conferences and online conversations are clearly showing the reappearance of a familiar adoption curve. Here I’ll discuss the Adoption Curve for Web 2.0 and Social Networks and provide rough milestones, so you can use it to gauge your investments in Web 2.0. You can avoid some of the extremes that the majority of the market will experience.

In addition, I will also show how Web 2.0 provides a rare opportunity to develop competitive advantage ahead of the market.

Having been on the front lines of PricewaterhouseCoopers Consulting’s E-Business Strategy practice during Web 1.0 (the Internet bubble), I am not surprised to see the familiar bubble pattern developing, so this is a rare opportunity to recognize it and produce tremendous value by avoiding some of the mistakes most companies make when adopting disruptive technology.

What I want to draw your attention to is not the disruptive technology itself, but rather the market’s perception of the technology. The Web 1.0 bubble was caused by distorted perceptions of the technology, what it could do, and when it could produce value. Companies’ perceptions of the value it could deliver were unrealistic. However, the Internet has produced fantastic value; it just took longer than most people thought. Therefore, a rare opportunity presents itself: What if executives could understand the Web 2.0 Adoption Curve and make more realistic investments?

Continue reading