Broadstuff Blog

Smartphone Market Shares Dec 2009

This is the script - Google's Android takes the place of the IBM PC/MS-DOS play (DOS, for the yoof, was the first Microsoft PC Operating System*, wot came before Windows) in the emerging Smartphone market, knocking out the others and pegging Apple back to its typical 15-20% of any computing market (of the highest margin gear, of course). Figures recently released show Android has doubled in share from 2.7% of the market to 5%, against iPhone's 25% and Blackberry's (read CP/M) 42% (see above)

Is this possible? Well, one person who I trust reviewed his experience of the AndroidoPhone on Twitter:

cluttered ui which punishes mistakes. forces you to learn new non- obvious interactions. screen doesn't work in daylight. no apps

Which he followed up with:

Not an android developer? get an iPhone

However, according to the article quoted above Android is the second most desired platform after the Apple now. So can it play the IBM/DOS role? PR spin or reality? Three things here:

- it seems the Android OS/UI is as user hostile as DOS ever was, so no barrier there . The difference was that compared to what came before you could do a lot more, on more powerful kit, with DOS. IBM's killer play was the PC with (gasp) 10Mb Hard disk at a decent price. Everyone had to have it!

- in the DOS/Apple wars, the DOS platform was open, Apple was closed so the developers flocked to DOS and unseated Apple, groovy Rip-Off-The-Wall Ads or not. This time round, Apple has learned the lesson so it has a massive community of developers building Apps already.

- Early DOS machines were sold by retailers with lots of support, which punters loved. Google has used more of a BOFO approach (Buy One and F*ck Off) which has not won friends and influenced enemies as much

- Microsoft were not The Borg at the time, they were seen - believe it or not - as quite groovy people. And everyone moaned about Big Blue but respected their ability to build good hardware. Who is the Groovy Guy in the Googlecamp?

In short, for Google to play IBM/MS-DOS and take centre stage this time round is going to be lot harder, as Apple has learned its lessons. If anything, Google seem to be behaving a bit like Apple did in the 1980s - Arrogant attitude, Average kit and no Apps.

*Well, technically DOS belonged to someone else, but MIcrosoft convinced IBM they had it - its a long story of intrigue and so on.....

US (Social) States of America

They say that if Facebook was a country, it would be 350m people and the same size as the USA. Interestingly though, it's social networks break down into a number of regional ones, as noted in the diagram by Pete Warden (see above). He defines 6 distinct regions:

Stayathomia

Stretching from New York to Minnesota, this belt's defining feature is how near most people are to their friends, implying they don't move far. In most cases outside the largest cities, the most common connections are with immediately neighboring cities, and even New York only has one really long-range link in its top 10. Apart from Los Angeles, all of its strong ties are comparatively local.


Dixie

Probably the least surprising of the groupings, the Old South is known for its strong and shared culture, and the pattern of ties I see backs that up. Like Stayathomia, Dixie towns tend to have links mostly to other nearby cities rather than spanning the country. Atlanta is definitely the hub of the network, showing up in the top 5 list of almost every town in the region. Southern Florida is an exception to the cluster, with a lot of connections to the East Coast, presumably sun-seeking refugees.

Greater Texas

Orbiting around Dallas, the ties of the Gulf Coast towns and Oklahoma and Arkansas make them look more Texan than Southern. Unlike Stayathomia, there's a definite central city to this cluster, otherwise most towns just connect to their immediate neighbors.

Mormonia

The only region that's completely surrounded by another cluster, Mormonia mostly consists of Utah towns that are highly connected to each other, with an offshoot in Eastern Idaho. It's worth separating from the rest of the West because of how interwoven the communities are, and how relatively unlikely they are to have friends outside the region.

Nomadic West

The defining feature of this area is how likely even small towns are to be strongly connected to distant cities, it looks like the inhabitants have done a lot of moving around the county. For example, Boise, ID, Bend, OR and Phoenix, AZ all have much wider connections than you'd expect for towns their size:

Socalistan

Sorry Bay Area folks, but LA is definitely the center of gravity for this cluster. Almost everywhere in California and Nevada has links to both LA and SF, but LA is usually first. Part of that may be due to the way the cities are split up, but in tribute to the 8 years I spent there, I christened it Socalistan. Californians outside the super-cities tend to be most connected to other Californians, making almost as tight a cluster as Greater Texas.

Pacifica

The most boring of the clusters, the area around Seattle is disappointingly average. Tightly connected to each other, it doesn't look like Washingtonians are big travelers compared to the rest of the West, even though a lot of them claim to need a vacation!

I guess Amishia doesn't make it as they don't have the Interenetz

Search Engine Usage by Adoption Type (Advertising Age)

Not only can one tell a lot about you by the searches you make, seems a lot can also be deduced from the search engine we use, as a WPP survey of 17,000 US internet users shows - Ad Age:

What does your search engine say about you? Well, if it's Bing, you're probably an early adopter, but you also visit, shop and ultimately make purchases from Walmart more than other search-engine users. Google searchers, on the other hand, are partial to Target and Amazon, and Yahoo searchers have a strong preference for wireless service from AT&T and Sprint.

Google users are more likely to book a flight online at JetBlue or make a reservation on Hotwire. They are also more likely to do research on a Lexus, while Bing users tend more toward Toyota. Aside from uncovering the research and purchasing habits of consumers, the study claims to have identified a host of demographic and psychographic information on search-engine users.

For instance, AOL customers feel less intellectual than their peers, are 55 and older, spend their money more responsibly, want to blend in to the crowd, feel like they've gotten a raw deal out of life, expect less from their future and, believe it or not, still use dial-up modems. Bing users are middle-aged, highly educated tech-savvy individuals who consider themselves to be average and spend more than 10 hours a week online.

Googlers tend to be the average internet Joe, according to the study. The search leader's loyalists are conventional people yet open to trying new things, believe in following rules and don't consider themselves any smarter or less intelligent than the person next to them. Yahoo users tend to be 55-plus, reserved and a less-independent group with little faith in imagination. They feel they have little control over their future and are skeptical and cautious of new or untried ideas.


Fascinating. I've used Dogpile for nigh on 10 years, it searches all the other engines and aggregates their result for you. I love the "parasite search engine" design (I wonder what that says about me ). Interesting that it hasn't really taken off though.

Update - realised there is a bigger story here. In an age where we see Google moving to mainstream advertising at the Superbowl (while Pepsi eschews it), clearly which search engine you use is becoming as much a branding battle as for any other commodity product - ie there is little inherent technical differentiation left. Increasingly search engines will try and identify demographics they want for Advertising purposes, and set out their brands to recruit them. Next step is diversofoed brands for different segments - Google Lite, Bing Premier etc - and celebrity sponsorship. Oh joy.....

Forrester is cutting back on the ability of its analysts to create Personal MicroBrands, says Sage Circle:

Forrester CEO George Colony is well aware that savvy analysts can build their personal brands via their positions as Forrester analysts amplified by social media (see the post on “Altimeter Envy”). As a consequence, a Forrester policy that tries to restrict analysts’ personally-branded research blogs works to reduce the possibility that the analysts will build a valuable personal brand leading to their departure. In addition, forcing analysts to only blog on Forrester-branded blogs concentrates intellectual property onto Forrester properties increasing the value of the Forrester brand.
Dennis Howlett notes (that's where I read this) that Forrester may not have their Econometer correctly tuned:

I won’t discuss the precise numbers here but let’s say that neither the people I mention [Jeremiah Owyang, Ray Wang] were benefiting more than 5% of the revenue they brought in, often with zero support from sales. In other words, Forrester had 90-95% margin on the back of personal blogs but against which it was not prepared to compensate two hard workers. The same was true for Charlene Li the year before. Given what Ray and Jeremiah were doing, that should have sent a loud red flag signal to Forrester exec. Apparently not.
Possibly, but the IP ownership issues go deep - expect more of this in future. I await the Forrester Report on the topic with Eager Anticipation

Update - not a Forrester Report, but a response of sorts on the Forrester blog Groundswell, which was started by one of those who have left (Charlene Li). Anyway, it says:

But for Forrester, it serves our clients better to be able to get to all our blogs from one place, and to know the opinions of analysts that they see are part of the other opinions they read in our reports, in press quotes, and in everywhere else we talk.

Forrester does not yet have individual analyst blogs on our site, but that's coming quite soon. This is why it's so ironic to read comments that "We don't let analysts have individual blogs" or "Forrester should read Groundswell." I cowrote Groundswell, and I believe our policy is the right one. Groundswell says that your employees will be blogging -- it doesn't say that content companies should have their content creators blog anywhere they want. If you're creating content for a content company, that company ought to host your blog.

So, byelines on the company blog then. Seems like the best solution over all, after all newspapers and magazines have used it for many, many years.

Location and Privacy

Amidst news that Foursquare is growing like Topsy, (I don't get it - clunky UI, minimal user benefits, but hey...) interesting thoughts re the tradeoff of User Experience vs Privacy.....Venture Blog's David Hornik:

Over the last few weeks I've started to suffer from Four Square fatigue. After all, Four Square is a lot of work. To get the benefits of Four Square, you need to proactively check in wherever you go. And, while each checkin requires a relatively small amount of work, in the aggregate, it takes real effort to make the most of the Four Square experience.

Which leads to this interesting thought:

Would it be better if Four Square just checked you in automatically any time you lingered at a location for more than 15 or 20 minutes? Or does that cross the privacy line for most of us?

The challenges of Four Square have gotten me thinking more broadly about privacy on the web. On the one hand, the less proactive input a service requires, the less friction there is in maintaining its usefulness. Automatic Four Square naturally will produce more data, on average, than does a Four Square that requires proactive behavior. And, for many, the Four Square experience would be greatly enhanced. On the other hand, when data is being passively collected by a service, there are natural privacy concerns that come with that data collection. How many of us want our every daily stop published to the Web? So perhaps automatic Four Square would turn away more users than it would attract.

This maps to some research we did last year on location privacy (see chart above). In a nutshell, the best interests of the user are not aligned to the best interests of teh service provider and thus we can predict an assault on user privacy - game based LBS services being one of the most effective ways (see our original discussion here). Now, the VentureBlog author isn't worried:

We have all seen that consumers are willing -- often times happy -- to trade privacy for utility. I know that I am. And, while Mark Zuckerburg's statement that privacy is a generational concern was controversial, I think he is absolutely right about that. The coming generations of consumers may not abandon the idea of privacy in its entirety, but they will certainly have very different views of the appropriate balance between privacy and utility. That balance has already clearly shifted in the direction of utility and I believe the trend will continue.

To some this will be viewed as a warning -- a cry of the coming privacy apocalypse. I don't see it that way. As technologies and standards evolve, doors open to new products and services. We are on the verge of an explosion of new ideas.
Automatic Four Square and its progeny are coming. And I, for one, am excited about that.
This Brave New Worldview is very naive, and possibly even irresponsible as worse still it plays into the hands of those who wish to control by monitoring or who wish to use these systems illegally/criminally. As Bruce Shneier has pointed out, the huge privacy defects in Social Media systems guarantee a requirement for strong privacy and anonymity.

We await the first cases of serious LBS privacy abuse in 2010, and the inevitable outcry will make the Phorm brouhaha look like a Phunfair

New Tory MPBots wont fiddle expenses

Aspirant Tory Politicians shall not say anything on Social Media Sites unless The Party has approved it first - Daily Mail:

David Cameron has ordered his party's candidates to submit their online utterances for vetting.

The strict edict issued to every Tory candidate across the country covers updates on social networking sites, such as Twitter and Facebook, as well as Internet blogs and websites.

The move aims to cut the number of gaffes in the run-up to the General Election when would-be MPs will face intense scrutiny.

No doubt the aim is to turn the individual MP's into online Politicobots, parroting the party line with absolute fidelity online. This is in effect what Labour did in 1997 via the technology of the day. One wonders why not just set up a Twitter and Facebook account in each MP's name and broadcast to it each day if this is the aim.

Problem is, it won't work as social media is, well, social - you converse. As Labour MP Kerry McCarthy ( named last year as 'Twitter Tsar'), said:

'The whole thing about new media is that you can't have this spin operation and control without destroying the spirit of it,' she said.

'You may put your foot in it from time to time but if you try to control it, it just becomes sterile.


This one looks like it's going to be fun to watch......

Gawker on a TechCrunch Teen Journoblogger who said he'd write about a startup in exchange for a MacBook Air:

Now, before we all castigate a 16-year-old, let's note that "asking for shit in exchange for publicity" is incredibly common on the internet. No less an internet legend than Julia Allison will tell you how far "asking for a MacBook Air" can take you. Most flacks know that bloggers are basically fine with bribery—you just have to be discreet about it! And Daniel, on at least one other occasion, apparently did get a computer in exchange for a post.

Quite - prizes for pimping is a well established rule in the Noo Meedja as in the Olde (just follow the hooha about Mommyblogger swag), and - one may suspect - it's not entirely rare among the big tech blogs. Or was he the Obligatory Bad Intern in the Barrel and made it up all on his own?

TechCrunch is shocked, shocked, I tell you.

Soon after Bo Peabody explained why Consumer Social Media will never make much money comes news that FrienfFinder Networks has pulled its IPO - TechCrunch:

With this short statement, FriendFinder Networks has canceled its IPO plans, following a widely reported delay in trading earlier this week.

Investors are analysts were wary of the company’s plans to go public (on the New York Stock Exchange, under the symbol “FFN.”) in order to repay debt – it was reportedly paying $75 million in interest on operating profit of $45 million last year and carries a massive debt load of $471 million.

The internet holding company reported net revenue of $244.4 million in the nine months ended 30 September 2009, compared with $243.9 million in the same period a year ago. Even with this small revenue increase, filings showed sales were flat.

Its a sad day in the frothy world of Social Media when even the Adult end of it can't, er, raise anything, especially given that the FFN systems already use the Freemium model so beloved of Social Media Evangelists today. However, eyeballing the financials one can see why there may have been investor reluctance in the current climate, which is far from frothy.

FriendFinder has been going a long time, I recall looking at it in 2005 when were were analyzing designs of different Social network systems. We covered the IPO initially in 2008 over here) - one of the interesting facts from the IPO documents was that Freemium customers were c 75% of revenues and c 3% of all customers.

Interesting little snippet about Google's patents signalling what Google is up to:

Google updated a series of patent filings in January that could suggest the search giant plans to dig deeper into behavioral targeting, video content, and might also roll out dynamic advertising in its mapping applications.

The patents range from a method to deliver, target and measure advertising over networks to an overlay for advertisements in video content.

Advertising is king, then.....across all Googlemedia.

My Broadsight colleague Paul Lancefield designed a patent search engine a few years ago, and it's fascinating watching a company's patents group around areas. Its a very nice look ahead to their future technology strategy.

What is more saddening is watching the sheer volume of defensive patents the large technology corporates push out every year.

Very interesting discussion going on about a NYT article on Microsoft's inability to innovate vs Apple:

But the much more important question is why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future, whether it’s tablet computers like the iPad, e-books like Amazon’s Kindle, smartphones like the BlackBerry and iPhone, search engines like Google, digital music systems like iPod and iTunes or popular Web services like Facebook and Twitter.

The NYT offer up:

Good old silo sieges....

When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn’t like the concept. The tablet required a stylus, and he much preferred keyboards to pens and thought our efforts doomed. To guarantee they were, he refused to modify the popular Office applications to work properly with the tablet. So if you wanted to enter a number into a spreadsheet or correct a word in an e-mail message, you had to write it in a special pop-up box, which then transferred the information to Office. Annoying, clumsy and slow.

...but you get those in every company, thats a given. What you need is something in the knitting that stops the legacy business silos (which have the big budgets) from squashing the New Things.

Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.

But even then its not a Microsoft thing only, and its not enough just to squish the Barons - Apple was in the Doldrums after Jobs left, and perked up when he came back. Ballmer is no Jobs (nor a Gates, for that matter), he's an excellent Operator of What Is, but not a Visionary of What Is Not. Ozzie has not had enough impact (Vista, anyone?). Excellently executing the Status Quo makes not much issue over 2 years but makes a big difference over 10 years (to paraphrase Bill Gates), which is why share price has been falling for years. Take the endgame of that tablet story:

...even though our tablet had the enthusiastic support of top management and had cost hundreds of millions to develop, it was essentially allowed to be sabotaged. To this day, you still can’t use Office directly on a Tablet PC. And despite the certainty that an Apple tablet was coming this year, the tablet group at Microsoft was eliminated.

Thats not the fault of silos, thats an inability of top management to get the big battalion barons off the pot. That can only be solved by the absolutely resolute Top Management - ie the CEO.

I think this one is also a key point:

Part of the problem is a historic preference to develop (highly profitable) software without undertaking (highly risky) hardware. This made economic sense when the company was founded in 1975, but now makes it far more difficult to create tightly integrated, beautifully designed products like an iPhone or TiVo. And, yes, part of the problem has been an understandable caution in the wake of the antitrust settlement. Timing has also been poor — too soon on Web TV, too late on iPods.

The value chain is now far more integrated. Its not clear to me that Microsoft needs to own the hardware (like Gates, I agree its very risky) but what they do need to do is be able to do is build great software as a fast follower.

Why is it Android, not a Microsoft OS in the competing smartphones to the iPhone? Where are they in lightweight e-Readers and tablets? As Stowe Boyd points out, they should (and could) have done a lot better in the Social Media tools arena.

No, I think this is Microsoft's top management being too keen on keeping the fat profits of the existing products but forgetting to watch the disruptive stuff closely enough. The irony is that Microsoft (and Sun et al) profited from the last generation of IT companies falling into the same trap. IBM and the BUNCH (Burroughs, Univac, NCR, etc), DEC et al were so wedded to the margins of their existing mini and mainframes they just couldn't bring themselves to invest (and cannibalise) their own revenues with DOS and UNIX boxes and got nailed. IBM had a cathartic shift - a Creative Destruction Moment if ever there was one- and the rest went to the wall. Microsoft now faces that challenge, and doesn't have a Jobs it can recall. Who will play Gerstner for Microsoft then?

And before anyone praises Google too much, that's them in 10 years or so - we are already seeing their inability to make money and great products outside of their core competence of search Ads.

(Incidentally, re Disruption Management, I spent some time last year working with Adriana Lukas (one of the other contributors to the Social Media in Enterprises event this week) trying to piece together how companies might manage themselves through all this. More Later, as they say.

Social Media In The Enterprise SmwView more presentations from Broadsight.

These are the slides from my presentation at the Social Media in Enterprises session. In brief, I looked at 3 key areas of Enterprise value Creation:

Innovation

All the work we have done implies that being able to create and sustain innovation in an enterprise is key to long term survival. When we look at social media's capability in the space, it seems it's main beneficial use is to leverage more brains than are within the enterprise. Looking at the ways these are being done now, there seems to be a 2x2 emerging on 2 axes:

- Active v Passive social engagement, ie listening vs engaging

- Light vs Heavy analysis - buzz monitoring vs datamining
Lightweight, Passive Systems - Buzz Monitoring and Zeitgeist measurement are typical uses, heavily utilised by PR/MR companies

Lightweight, Active System - Crowdsourcing of simple market research, product information etc to understand. Prediction markets are a typical emergent application

Heavyweight, Passive Systems - Datamining, mashing of many data sources to deduce much more detailed information

Heavyweight, Active Systems - automating the Delphi Technique (getting expert opinions) is much easier on modern systems. Complex prediction markets and auctions for answers from the global hivemind have been used for pharmaceutical, mining, financial and other industries.

Operational Excellence

There are 3 main areas of value creation in the operational areas:

Revenue Creation - this falls into 2 areas, ie increasing sales volumes and per unit value. So far, Social Media has mainly been used for indirect volume generation (buzz, viral marketing, prospecting) rather than direct (sales) and not a lot in influencing increasing price (though there is increasing evidence of it being useful in cross selling).

Operational Cost Reduction - There are two main categories - reducing churn and reducing operating costs. Social Media is heavily used in customer service, and shows promise in churn reduction - very valuable in high churn industries. Social Media in its eraly days was heavily touted as a tool to reduce operational costs - wikis etc being the tools of choice - but like all office automation promises, it is yet to live up to the promises made (and if you look at the discussion in the session, you can see why - this requires a lot of replumbing of the workflows to operate)

Capital Cost Reduction - there are two main areas - maximising exiting capacity utilisation, and reducing future capacity utilisation. So far there has been very little social media penetration in this area, though we have seen companies using things like webcams and IM for long distance analysis of equipment failure.

Rapid Reaction to Change

Being able to sense the movement in a market and react faster than the competition is a key facet of survival and sustainable ability to beat the competition. The OODA model (for observe, orient, decide, and act) is a typical feedback loop cycle - we like it as it was developed for the military, who have understood the benefits of faster reaction than the opposition. Other terms for this are things like Agile or Lean operations, Just-In-Time systems etc. What they all rely on is rapid delivery of clear information and the ability to parse it and act on it.

In theory, Social Media has an impact here due to its observed ability to spread data fast and marshall resources - we think this is potentially a major area of use, but - again, as noted in the sessions, the amount of re-plumbing designed to get the benefits.

Challenges for Social Media

We believe there are 5 main challenges for Social media adoption:

- Early Day “Chasm” Technology – The basic technologies are not yet fit for mainstream usage in enterprises, a lot of grunt work needs to occur.

- Hype Curve impact – a lot of snake oil salesmen queer the market, destroying credibility

- Security Concerns – Enterprises have many valid concerns about security that need to be addressed, consumer social media has very poor security capability today and little that Facebook et al are doing inspires confidence (as Bruce Schneier points out, they are probably going in the wrong direction)

- ROI not clear – nothing outside of early day pilots gets done in an enterprise without a business case, an ROI is a pre-requisite

- Organisation Re-design - social media, like previous new working approaches such as JIT, requires significant organisation redesign. This takes time.


How it rises to these challenges will define its success over the next few years.

(By the way, that was the 2000'th Broadstuff post)

Patchwork Elephants in the Enterprise Ecosystem

On Tuesday night David Terrar and I ran the first Social media in Enterprise session (#smie on Twitter), as part of London's Social media Week (and Benjamin Ellis took some pictures). We only thought of doing it a week before, in fact one of the lessons of Social media is that it was very easy to organise the event - though one of the social technologies used was email, which many "social" purists think of anathema . Its interesting to look at that in fact - Twitter DMs and email were the main "back end" tools used to organise and co-ordinate, Twitter and blogs were the main tools used to publicise, and a cloud based app - Eventbrite - was used to take tickets and Paypal used to collect payment. All this was set up in about 48 hours, part time (Kudos to Cass Business School for stepping up to the plate). You have to stop and think about how easy it would have been to do that even 5 years ago.

We used the Patchwork Elephant to symbolise how the area was still confused, we are like blind men feeling our way around the elephant and by looking at various viewpoints we may see it completely. But its also a patchwork, in that tere are many types of Enterprises - not for profit vs for profit, physical vs digital, manufacturing vs service etc etc.

Anyway, on to the show - the speakers ran in alphabetical order, but I'm going to re-organise it in sequence of big picture to detailed actions (David has a good summary of teh speakers and their organisations over here on his take of the evening).

Umair Haque talked about "Peak Organisations" - in a fascinating talk, he outlined his thesis that organisations designed on 18th century principles are just not fit for purpose today, and that hierarchies built to organise masses of people to perform the same menial tasks do not work when the key issue is to maximise knowledge work. He went through some of the new principles of organisation design that will maximise value.

Benjamin Ellis took this point to the next level of detail, looking at the differences between corporate hierarchy networks, the "real" networks that make things work. He then mapped this to how a social media network works and what the likely organisational impacts will be - and where the fault lines are. Now people have been writing about "hollowed out" organisations for years, and Social media gurus have long noted that its structure is more sympathetic to knowledge work - but Benjamin is one of the few I''ve seen pointing out that an in-enterprise social network is very different to a friendship one and has all sorts of "plumbing" issues to work through. (a point later picked up by Mat when he noted two different types of capital - social and financial - existed uncomfortable together. Render unto Caesar....! Adriana and Euan picked up on this in other ways too).

Mat Morrison then took this to another level of detail again, showing work he had done on the actual social networks in real organisations. One of teh fascinating lessons was that a social network left to grow "au naturel" in an organisation is patchy and has a few massive nodes, who cause mass failure if taken out. He showed that a certain amount of design is necessary, as well as "automatic implementation" onto desktops to ensure both that everyone was networked and the resilience was acceptable.

My talk was on the challenges Social Media faces to convince people of its overall Return on Investment, I looked at the potential role of Social Media in 3 key areas of value creation (slides are here):
- Innovation
- Operational Excellence - Sales, Operating costs, etc etc
- Agility - the ability to react quickly to changes in a marketplace, and deal with disruption.

In essence this was a discussion on the business economics of SM, and where the biggest levers may be found, It is dependent on the company - for example SM seems quite useful to handle churn, great if you are in a high churn industry, but if you are a low churn industry its not a great benefit.

Adriana Lukas looked at her experience of implementing social media in large corporates (see her slides here), and drew some conclusions about how to do it effectively. Her view reflected the theme that Benjamin and Umair had already floated about traditional hierarchies being orthogonal to social media structures. She pointed out that even the social media structure in an enterprise looks different. Her main hypothesis is that it is not going to be possible to re-engineer today's organisation to use social media - you have to build them this way from the ground up. to build stuff in businesses you have to have small pilots, below the radar, so you can prove it.

Euan Semple talked without notes (he came on towards the end of the event and I think talking powerpointless was very high impact at that time) about his 10 years of experience of working with social media tools in organisations. His basic point, like Adriana's, was that the way social media works is orthogonal to the way rigid heirarchies work. He then noted that Social Media does actually map quite closely to the way people like to work. He also showed that there is no inevitable move towards Social Media , looking at the Burtian Era in the BBC as an example (John Burt tried to impose a Tory style internal market plus industrial grade hierarchy to a creative public service)

What I took away from this and Adriana's talk is that it may be possible to re-engineer some businesses, similar to the way you had to re-engineer to use JIT techniques - but it is very hard, and JIT only took off in this way because some companies like Toyota had spent decades changing to operate that way, and were now whipping competitive asses.

Sue Black talked case study - how she utilised Social Media for a Not for profit Enterprise - Bletchley Park (where the German codes were broken in World War 2) has been left in a shabby state (the UK does not love its technology heroes much - poor old Frank Whittle, who invented the jet engine, was only remembered by an Industrial Estate named after him for decades). What she described was a masterful use of social media - at very low cost - to mobilise people to help. What really struck me was that Sue didn't pretend she had a perfect strategy, but in fact had to try many different things in the process, some worked, some didn't. A reminder that this is experimental stuff.

Dave Terrar then gave a number of case studies from companies doing things today - Swiss Re, Cisco amd Wachovia, noting that what is now needed is to aggregate an emerging body of knowledge about what works and what doesn't. His key point was that this may move like the ERP market in future:

Although a lot of my social media colleagues favour a bottom up, disruptive or even "skunk works" approach to implementation, which can all work… the old rules of project implementation still apply inside the culture of many, or even most, businesses. Swiss Re is a perfect example of how you get senior executive buy in and sponsorship to ensure success, and then spread the word to 11,500 employees. It was the way we used to get a successful ERP implementation going, and it can be done for the change management required for implementing these sorts of collaboration tools too. One of my key messages is that these tools need to work with, enhance and improve the existing business processes, not go around or subvert them.

I think what we are seeing here is two phases in the evolution of a system (Dave puts Enterprise 2.0 in The Chasm right now) - before ERP there was MRP, and in its early days it was skunkworked, then when it was shown to work it got taken up by a few go ahead companies, whose success drove others to emulate it.

Shefaly Yogendra and Will McInness couldn't make it unfortunately, but have put up thir contributions online here and here. Well worth the read, Shefaly dealing with highly regulated industries and Will taking up the theme of it being inevitable as it works as we do. (I will link to people's stuff as they paste it up)

In the Q&A and discussions afterwards there were quite a few interesting threads around what the endgame will look like - Ronald Coase's work on sizes of firms being driven by transaction costs, abiut Dunbar and the optimal size of hierarchies, about the industrial era organisation of current enterprises vs the organic structure of social media (a few old salts noted the smallest unit in a Just In Time organisation is a self reliant "cell" - a thread I want to push further in future). But one has to come back to a corollary of Umair's thesis - before we see major changes there needs to be a structural change in the way capital is accumulated (the rich get richer regardless) and distributed (small, nimble companies find it far harder to get money than large, sclerotic ones) whereas most of the innovation and value is being created outside of these existing systems.

To end - an observation by Patrick Hadfield:

To change the culture and behaviour in organisations, we need to look at all aspects of working – including the processes and the reward structure. If we don’t tackle these aspects of organisation life, we will have little success: people will work to the outcome they are rewarded for and by which they are managed.

The move to flatter, less hierarchical organisations – even, perhaps, the fabled “virtual” organisations where almost all aspects of business are outsourced – may be the most fertile ground for social media in enterprises: they can be nimble, and they rely on effective communication to function properly. Here, use of social media could provide a real business advantage – and maybe this is where the real value of social media in business will be found.

Afterthought - on reading this, I know a number of people will say "we've heard this before". To them I'd say, you are right - but you have also heard a lot of other stuff, a lot of which is total snake oil, that was NOT said. This is the considered view of a bunch of smart people who have been looking at this for a long time, long before there was a bandwagon to jump on. I'm not saying this is canonical, but i can see the glimmerings of an elephant taking shape. More later, as they say.

A Patchwork Elephant a bit better described, then. There does seem to a considerable feeling to do another one, and there were at least 8 people in the audience who could as easily have been speaking, so I think this may, like our elephant, have legs

Patchwork Elephants in the Enterprise Ecosystem

On Tuesday night Dave Terrar and I ran the first Social media in Enterprise session (#smie on Twitter), as part of London's Social media Week. (Benjamin Ellis took some pictures)We only thought of doing it a week before, in fact on of the lessons of Social media is that it was very easy to organise the event - of course, one of the social technologies used was email, which many "social" purists think of anathema . Its interesting to look at that in fact - Twitter DMs and email were the main tools used to organise and co-ordinate, Twitter and blogs were the main tools used to publicise, and a cloud based app - Eventbrite - was used to take tickets and Paypal used to collect payment. All this was set up in about 48 hours, part time. You have to stop and think about how easy it would have been to do that even 5 years ago.

We used the Patchwork Elephant to symbolise how the area was still confused, we are like blind men feeling our way around the elephant and by looking at various viewpoints we may see it completely. But its also a patchwork, in that tere are many types of Enterprises - not for profit vs for profit, physical vs digital, manufacturing vs service etc etc.

Anyway, on to the show - the speakers ran in alphabetical order, but I'm going to re-organise it in sequence of big picture to detailed actions.

Umair Haque talked about "Peak Organisations" - in a fascinating talk, he outlined his thesis that organisations designed on 18th century principles are just not fit for purpose today, and that hierarchies built to organise masses of people to perform the same menial tasks do not work when the key issue is to maximise knowledge work. He went through some of the new principles of organisation design that will maximise value.

Benjamin Ellis took this point to the next level of detail, looking at the differences between corporate hierarchy networks, the "real" networks that make things work. He then mapped this to how a social media network works and what the likely organisational impacts will be - and where the fault lines are.

Mat Morrison then took this to another level of detail again, showing work he had done on the actual social networks in real organisations. One of teh fascinating lessons was that a social network left to grow "au naturel" in an organisation is patchy and has a few massive nodes, who cause mass failure if taken out. He showed that a certain amount of design is necessary, as well as "automatic implementation" onto desktops to ensure both that everyone was networked and the resilience was acceptable.

My talk was on the challenges Social Media faces to convince people of its overall Return on Investment, I looked at the potential role of Social Media in 3 key areas of value creation:
- Innovation
- Operational Excellence - Sales, Operating costs, etc etc
- Agility - the ability to react quickly to changes in a marketplace, and deal with disruption.

In essence this was a discussion on the business economics of SM, and where the biggest levers may be found, It is dependent on the company - for example SM seems quiet useful to handle churn, great if you are in a high churn industry, but if you are a low churn industry its not a great benefit.

Adriana Lukas looked at her experience of implementing social media in large corporates, and drew some conclusions about how to do it effectively. Her view reflected the theme that Benjamin and Umair had already floated about traditional hierarchies being orthogonal to social media structures. She pointed out that even the social media structure in an enterprise looks different. Her main hypothesis is that it is not going to be possible to re-engineer todays organisation to use social media - you have to build them this way from the ground up. to build stuff in businesses you have to have small pilots, below the radar, so you can prove it.

Euan Semple talked without notes (he came on towards the end of the event and I think talking powerpointless was very high impact at that time) about his 10 years of experience of working with social media tools in organisations. His basic point, like Adriana's, was that the way social media works is orthogonal to the way rigid heirarchies work. He then noted that Social Media does actually map quite closely to the way people like to work. He also showed that there is no inevitable move towards Social Media , looking at the Burtian Era in the BBC as an example (Burt tried to impose a Tory style internal market plus industrial hierarchy to a craetive public service

What I took away from this and Adriana's talk is that it may be possible to re-engineer some businesses, similar to the way you have to re-engineer to use JIT techniques - but it is very hard, and JIT only took off in this way because some companies like Toyota ahd spent decades changing to operate that way, and were now whipping competitive asses.

Sue Black talked case study - how she utilised Social Media for a Not for profit Enterprise - Bletchley Park (where the German codes were broken in World War 2) has been left in a shabby state (the UK does not love its technology heroes much - poor old Frank Whittle, who invented the jet engine, was only remembered by an Industrial Estate named after him for decades). What she described was a masterful use of social media - at very low cost - to mobilise people to help. What really struck me was that Sue didn't pretend she had a perfect startegy, but in fact had to try many different things in the process, some worked, some didn't. A reminder that this is experimental stuff.

Dave Terrar then gave a number of case studies from companies doing things today - Swiss Re, Cisco amd Wachovia, noting that what is now needed is to aggregate an emerging body of knowledge about what works and what doesn't. His key point was that this may move like teh ERP market in future:

Although a lot of my social media colleagues favour a bottom up, disruptive or even "skunk works" approach to implementation, which can all work… the old rules of project implementation still apply inside the culture of many, or even most, businesses. Swiss Re is a perfect example of how you get senior executive buy in and sponsorship to ensure success, and then spread the word to 11,500 employees. It was the way we used to get a successful ERP implementation going, and it can be done for the change management required for implementing these sorts of collaboration tools too. One of my key messages is that these tools need to work with, enhance and improve the existing business processes, not go around or subvert them.

I think what we are seeing here is two phases in the evolution of a system - before ERP there was MRP, and in its early days it was skunkworked, then when it was shown to work it got taken up by a few go ahead companies, whose success drove others to emulate it.

Shefay Ypogendra and Will McInness coudn't make it unfortunately, but have put up thir contributions online here and here. Well worth the read, Shefaly dealing with highly regulated industries and Will taking up the theme of it being inevitable as it works as we do. (I will link to people's stuff as they paste it up)

In the Q&A and discussions afterwards there were quite a few interesting threads around what the endgame will look like - Ronald Coase's work on sizes of firms being driven by transaction costs, abiut Dunbar and the optimal size of heirarchies, about the industrial era organisation of current enterprises vs the organic structure of social media (a few old salts noted the smallest unit in a Just In Time organisation is a self reliant "cell" - a thread I want to push further in future). But one has to come back to a corollary of Umair's thesis - before we see major changes there needs to be a structural change in the way capital is accumulated (the rich get richer regardless) and distributed (small, nimble companies find it far harder to get money than large, sclerotic ones) whereas most of the innovation and value is being created outside of these existing systems.

To end - an observation by Patrick Hadfield:

To change the culture and behaviour in organisations, we need to look at all aspects of working – including the processes and the reward structure. If we don’t tackle these aspects of organisation life, we will have little success: people will work to the outcome they are rewarded for and by which they are managed.

The move to flatter, less hierarchical organisations – even, perhaps, the fabled “virtual” organisations where almost all aspects of business are outsourced – may be the most fertile ground for social media in enterprises: they can be nimble, and they rely on effective communication to function properly. Here, use of social media could provide a real business advantage – and maybe this is where the real value of social media in business will be found.

A Patchwork Elephant a bit better described, then. There does seem to a considerable feeling to do another one, and there were at least 8 people in the audience who could as easily have been speaking, so I think this may, like our elephant, have legs

Bruce Schneier on the futility of universal identification:

Universal identification is portrayed by some as the holy grail of Internet security. Anonymity is bad, the argument goes; and if we abolish it, we can ensure only the proper people have access to their own information. We'll know who is sending us spam and who is trying to hack into corporate networks. And when there are massive denial-of-service attacks, such as those against Estonia or Georgia or South Korea, we'll know who was responsible and take action accordingly.

The problem is that it won't work. Any design of the Internet must allow for anonymity. Universal identification is impossible. Even attribution -- knowing who is responsible for particular Internet packets -- is impossible. Attempting to build such a system is futile, and will only give criminals and hackers new ways to hide.

The article essentially argues that the tools for foolproof universal ID don't exist and never can, and the sort of identity that is do-able is too easy to subvert. Thus anonymity has to exist for certain applications. This penultimate paragraph is also interesting:

The whole attribution problem is very similar to the copy-protection/digital-rights-management problem. Just as it's impossible to make specific bits not copyable, it's impossible to know where specific bits came from. Bits are bits. They don't naturally come with restrictions on their use attached to them, and they don't naturally come with author information attached to them. Any attempts to circumvent this limitation will fail, and will increasingly need to be backed up by the sort of real-world police-state measures that the entertainment industry is demanding in order to make copy-protection work. That's how China does it: police, informants, and fear.

Bits are Bits. Universal Open Identification is misguided and its a passport to Stasiland, it would seem. Possibly a bit strong, but the basic point is made. This is a pipe dream.

Last night we had rather a good session on Social Media in the Enterprise, where we did quite a bit of crystal ball and navel gazing, so its interesting to see Gartner's predictions today. Here they are with my takes:

By 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users.

“The rigid distinction between e-mail and social networks will erode. E-mail will take on many social attributes, such as contact brokering while social networks will develop richer e-mail capabilities,” said Matt Cain, research vice president at Gartner. “While e-mail is already almost fully penetrated in the corporate space, we expect to see steep growth rates for sales of premises- and cloud-based social networking services. “
My take - what is more likely to happen is they will all be integrated into unified comms systems that can receive and send a message in whatever format one wants. And why cloud based? Enterprise email hasn't needed a cloud based system so far?


By 2012, over 50 percent of enterprises will use activity streams that include microblogging, but stand-alone enterprise microblogging will have less than 5 percent penetration.


“However, it will be very difficult for microblogging as a stand-alone function to achieve widespread adoption within the enterprise. Twitter's scale is one of the reasons for its popularity,” said Jeffrey Mann, research vice president for Gartner. “When limited to a single enterprise, that same scale is unachievable, reducing the number of users who will find it valuable. Mainstream enterprises are unlikely to adopt standalone, single-purpose microblogging products.

My take - the reason enterprises are interested in Twitter and similar is not due to it being a social network, but because its a very flexible transport system. That transport system will find many uses, including M2M, M2P, P2M and P2P functions. It will be used for broad and narrowcasting and be part of the Unified Comms (UC) Architecture.


Through 2012, over 70 percent of IT-dominated social media initiatives will fail.

When it comes to collaboration, IT organizations are accustomed to providing a technology platform (such as, e-mail, IM, Web conferencing) rather than delivering a social solution that targets specific business value. Through 2013, IT organizations will struggle with shifting from providing a platform to delivering a solution. This will result in over a 70 percent failure rate in IT-driven social media initiatives. Fifty percent of business-led social media initiatives will succeed, versus 20 percent of IT-driven initiatives.

My Take - Indeed, but thats a "so what" - its a fairly standard failure rate with new technologies. Lessons will then be learned, best practice will emerge etc etc. The far, far bigger issue that emerged last night is that the way organisations are organised and the way social media works are orthogonal to each other, so it will require big shifts in workflow, processes, culture etc - companies will only do that if they can see a clear ROI based rationale. And because metrics are still new, failure will be as much about mis-measurement as mis-steps


Within five years, 70 percent of collaboration and communications applications designed on PCs will be modeled after user experience lessons from smartphone collaboration applications.

As we move toward three billion phones in the world serving the main purpose of providing communications and collaboration anytime anywhere, Gartner expects more end users to spend significant time experiencing the collaborative tools on these devices. For some of the world, these will be the first or the only applications they use. The experience with these tools for all who use them will enable the user to handle far more conversations within a given amount of time than their PCs simply because they are easier to use. Just as the iPhone impacted user interface design on the desktop, the lessons in the mobile phone collaboration space will dramatically affect PC applications, many of which are derivatives of decades-old platforms based on the PBX or other older collaboration paradigm.
My Take - this is Planet Mobile we are talking about, which is very susceptible to hype. Halve everything. Restated this is that " Within ten years, 35 percent of collaboration and communications applications designed on PCs will be modeled after user experience lessons from smartphone collaboration applications." Much more likely.


Through 2015, only 25 percent of enterprises will routinely utilize social network analysis to improve performance and productivity.

Social network analysis is a useful methodology for examining the interaction patterns and information flows that occur among the people and groups in an organization, as well as among business partners and customers. However, when surveys are used for data collection, users may be reluctant to provide accurate responses. When automated tools perform the analysis, users may resent knowing that software is analyzing their behavior. For these reasons, social network analysis will remain an untapped source of insight in most organizations.
My Take - Companies will try to spy now, staff won't like it, and some companies will go too far - expect regulation to emerge by 2015. Also, not all business functions and companies will have the same "bang for buck" from social media, so many will not really use it very much.

Bo Peabody, writing in SAI, makes a number of good arguments as to why Social Media makes for a lousy standalone consumer business. As he points out, its a case of mistaken metrics.

The venture capital community is enamored because social networks grow fast and growing fast is a very difficult thing to do. Venture capitalists have never liked content networks because of the costs associated with creating the content. Social networks present the perfect solution to that problem. The content on social networks is created for free by people who derive some other psychic or social benefit from creating it.

Here are the main points from his argument:

What all these businesses have in common is that they are based on people communicating with each other.

They are communications businesses. Communications businesses are very rarely, if ever, good places to advertise. However, they are really interesting and necessary products, and on the Web they may be the most interesting and necessary products.


What about other forms of revenue beyond advertising?

Indeed, most communications businesses charge users for their services. Telephone companies have made a lot of money for a long time charging consumers to express themselves and communicate with each other efficiently, privately and in multiple formats. Does charging users make sense for Tripod, Facebook and Twitter, the communications businesses of the Web? We tried this at Tripod back in the mid-nineties and many others have tried it since then. It doesn’t work. The barriers to entry for Web-based communications businesses are so low and the switching costs for consumers so minute that charging uses will never amount to much revenue.


What about direct to consumer revenue streams beyond subscriptions, like verified accounts, virtual goods, and commerce?

In the same way that the fundamental nature of social networks as communications products renders them subpar advertising venues, monetization schemes based on extracting money from the social networkers themselves faces yet another problem resident in the fabric of social networks: what I call the “ubiquity paradox”. The value of social networks is their ubiquity. What makes Facebook such an incredibly fun and useful experience is that virtually everyone is on it. Any monetization efforts are going to drive some users away and that will in turn erode value for the users that remain. Most of the moneymaking ideas contemplated by Facebook are good ones and I think many of them could work. But all of them require Facebook to get more commercial and more intrusive, and therefore less personal. This will result in a smaller Facebook.


What about selling data from the “social graph” as Twitter recently did to Google and Facebook?

I don’t know a lot about the business of selling data, but I do know that there is a lot of valuable data created on social networks. But my hunch is that once users know revenue is being generated by selling their personal data or data associated with their actions, they aren’t likely to rejoice. If social networks can sell data in a way that feels harmless to users perhaps they can make some money, but not a lot of money and certainly not enough to justify the values placed on them today.

Now Peabody makes one point which is useful to keep in mind:

Search engines are amazing businesses, much better than most media and communications businesses. However, they are an anomaly. Media companies and the venture capital community have been chasing the next “search engine” business model for over ten years; this elusive creature that creates highly valuable advertising inventory without the costs associated with actually creating content, and has the financial and cultural profile befitting a public company.

The fervent hope is that just because we are replacing Search with Social Media as a way of finding things, that the same transfer of spot Ads can happen. We don't believe it will, as the output is not the same and doesn't really support Ads.

We couldn't put it better ourselves, so we didnt - As readers of this blog will know, we agree - and have made these points for 3 years or so (and in some detail - just search for Freeconomcs on this blog). To us, Social media is like email - essential, but no one will pay for it directly. And we think the despreate attempts to sell off the social graph will rebound in spades, probably leading to regulation (as is happening with the banking industry already)

Incidentally, our view is that no one will pay for generic consumer Social Media - niche media with valuable content, or content that has value by being rare, and business social media are different things entirely

I don't know why, but for some reason perfectly sane people go to Davos and then write a curious type of article - not quite sure how to describe it but words like smug, supine, surface level and subservient all come to mind. Its like biting the hand that feeds, but without teeth, and giving the fingers a grateful little lick at the same time. These two articles are typical of the genre - I had them on the spike for shafting, as it were - as to my mind they show this particular issue off quite well.

First, Alan Rusbridger on "Google is another country":

Google is not unlike many other countries (Britain, say) which turn up at Davos with half the cabinet. Schimdt was flanked by his senior team – including David Drummond, Nikesh Arora, Marissa Mayer, and Chad Hurley. All presidents or vice-presidents, and worth a few billion between them. They are sitting on mountains of cash and no debt. So, not very much like most countries.

It goes on to outline a basic fireside chat Google had with the star-struck, with no real information. It must be the Davos effect, but surely the obvious points to be made in such an article were:

(i) If Google were a country, the interviewers would not be soft soap firesiders, but hard hitting types like the BBC Today and Newsnight hounds. (Its in times like these that you see the difference between independent and dependent media)

(ii) If Google were a country, its government would not be seen as a "free, democratic, do no evil" type but something just a shade off Feudal that spied on its citizens like no other state except East Germany. Hell, China would probably look more democratic in comparison.

And then there was Jeff Jarvis, on "The disrupted of Davos"

Last year when I arrived at Davos, I wondered whether we were among the problem or the solution. This year, I wondered whether we were among the future or the past. Well, actually, I don’t wonder.

We were among the disrupted. The only distinction among them is that some know it, some don’t. At Davos, I fear, most don’t.

........

At the end of the week, I sat in on a session trying to brainstorm under WEF’s theme of the three re’s. They said the point of the exercise was to get soundbites (as they used to be known; tweets as they are now known) and that’s what they got: PowerPoint (actually, Tumblr) platitudes. There were good points: We need to change what we measure, said one table, for now we get what we measure (true from media to economies). But there was also insipidness: “We are what we allow to happen.” And: “Ecology means caring. Equity means sharing.” Put that on your T-shirt and wash it.

Then a 17-year-old from Iraq scolded the entire room, telling them that these were just sayings. Where’s the action, he asked? Where are the specifics? That moment gave me hope: another disrupter, this one from the future.

I mean, FTW? Soundbites production is the main industry of Davos, we know that, but blogging allows one un petit snark, an opportunity to call it out there and then. And there is always the regulatory Angry Youth that the Old Farts can smile benignly on and say "ah, we were like that once" (though they never were, they know people on the barricades get shot - often by their own side) and believe they are handing on the baton. Jeff's article goes on to detail his herculaean labours at Davos, and ends with:

I see the value in Davos: smart people with the power to get things done (well, once upon a time) able to mix and meet and sometimes learn and even act. I see similar benefit for the people are indeed are rethinking, redesigning, and rebuilding by replacing.

I'd love to know who is actually rethinking et al, Jeff. I saw far more evidence of retrench, retain and refute. It would be interesting to look at the Davii over the last 10 years and ask what actually got done there of any value. One chap on BBC radio 4 opined that Davos was basically the collection of all the people who have f*cked up our world (I paraphrase). And as another wag pointed out, most people were there checking out what it would be like to live in Switzerland as its the only rich country that looks like leaving them untaxed.

In short, what - what, guys - changed? What evidence did you see that there is any understanding that the world is in an unsustainable place? Those that ruined it are still in power, ordinary people are still paying an extraordinary price for those at Davos. And what did you Tigers of the MediaSphere do to highlight this while over there? Where were the bloggers taking up the lance and tilting at the (massively subsidised) Windmills - I heard more useful critique from the BBC than from a roomful of blogmonkeys.

Do you guys remember the Halcyon days? When Social Media, the Internet, the Web was supposed to be a force for change, a force for Equality? When we could believe that Google tried hard to Do No Evil. When bloggers would tell The Truth, unlike the Olde (spit) Media? When YOU had the power, and soon the glory. Our kingdom was about to come, here, for everybody. The long tail was soon to crack the whip. What happened?

This year was more piquant than those to date, given the sh*t we are in - I couldn't help feel that this was the Animal Farm year for Big Blog Media.

Or as Umair Haque may say (I may be putting words in his mouth here), Davos is the Call of Ctulhu for Zombienomics

Normal technology Strategy Postings will now be resumed, just remember to set your BlogRadio Controls to Pirate from now on

Paul Carr on the unsubtle art of Tech Blog headline writing:

Next comes the important task of picking a title. Remember, a good title serves two important functions: 1) to attract comment trolls, and 2) to amuse Gabe Rivera from Techmeme. One tried and tested format is the “Why X will be the Y killer” construction, or the even more popular “Five tips for…” meme. The latter is especially recommended for authors who are working against a tight deadline: readers will tolerate any shit as long as it’s in a numbered list (the so-called ‘Mashable Rule’). Note: there is no need for the title to actually relate to the body of your Guest Post: the two are quite separate entities.
He's right of course.

I don't know how much SEO Goodness has leaked from this blog due to a near ban on the Mashable Rule here, and we never use the "killer" one. But its a sad indictment of Teh Internetz As They Is Today that a witty headline is deemed bad SEO and a Mashable Rule one is good.

Sadder still is his next point, which is once you have got your SEO friendly title, and the reader has clicked through, they are of little further value to you, hence his sanguine advice on the content:

Write any old crap
Is that the Mashable 2nd rule?

Update - useful comment from Mat Morrison that I've republished up here:

Saw an excellent presentation on how SEO had changed headline-writing at The Times by Tom Whitwell at Social Media Camp London a couple of years ago. Argues that witty headlines have been dropped in favour of clarity and impact - not just because of Google's content analysis engine, but also because of feed readers.

iPad Buzz Metrics


Nice story from RWW about the "buzz" over the iPad:

According to an email from Andres Burgos, the project lead for TweetFeel, the company collected almost a half a million tweets since Steve Jobs took the stage on Wednesday, "cleaned the hell out of them and scored about 40,000" and found an overall positive sentiment hovering at around 60%. But this isn't the fun part. Nobody wants to watch people gush, so let's take a look at how that other 40% breaks down.

I've shown their detailed breakdown in their picture above. We qualify in the "its a big iPod" and the "Silly name" camps, but this is where buzz metrics can run foul. If you read our blog post on the subject you can see that we also fall in the "yes, the fanbois will buy it anyway, but the market is bigger and this is more more disruptive than many critics think" camp.

As the article notes, most of the fanbois - the 60% - just say "want one" or "awesome", but the nuance is in the knockers - or what appear to be knockers at first glance.

eBook eConomics

eBooks should cost the same as paper books, says MacMillan CEO John Sargent - SAI:

John Sargent, CEO of publisher Macmillan, has taken out a full-page ad to explain why he is insisting that Amazon raise prices on its ebooks to $15 in some cases.

.....................................

First, to clarify what is happening here, you are already getting your money: You are selling ebooks to Amazon at whatever price you set ($10-$15), and Amazon is turning around and selling them at a loss, sometimes for $9.99. We're not against your charging what you want to for your books. We're against your telling Amazon what it has to charge for them.

Also, we don't want to pay $15 for ebooks, and we don't think we should have to. The marginal cost of an incremental ebook is pretty much zero. So why on earth should we pay $15 for it?

Its not quite so one sided as portrayed here - Amazon threatened at one stage to remove all MacMillan books, electronic and paper, from its listings. Amazon will now acquiesce, however - as the NYT notes. One wonders what it will do to the volumes sold?

Sigh - The Blodgett's views on economics always have to be handled with care (as many found out in dotcom days to their cost), but one does expect better of a physical media CEO who has observed this argument fail in music, journalism and now video. A little lesson in production microeconomics then. Consider the diagram above - a simplifies media value chain. There are 4 main cost buckets in producing a book:

(1) Content Creation - thats what it costs the creator (the author etc) to create he work
(2) Aggregation - the costs of agents, editors, advertising. legal fees etc etc
(3) Production - the cost of making the product, whether its digital or physical. However, physical production costs are significantly higher than
(4) Distribution - the costs of moving the product from producer to consumer - again, digits over the internet cost a fraction of the trucks, sheds and shops needed for books

Now, on to the cost of production.

(1) Cost of creation is the same, irrespective of the media
(2) Cost of aggregation is similar

So, assuming the market volume is the same. The costs are roughly the same, so the cost per unit will be similar. These are the costs in blue, above.

(3) Cost of Production - orders of magnitude lower
(4) Cost of Distribution - ditto

These are the red sections, and represent the difference in cost of production between a book and e-Book. I've drawn the 4 elements as roughly equal in size - in fact the cost of creation is fairly small, aggregation fairly large - but production and distribution are very material - at least 30% in nearly every case. That is a non trivial saving.

Now just to deal with Mr Blodgett quickly - the "marginal cost" is indeed near-zero once the full costs of the creation and aggregation have been met - but only when they have been met. That is true of both paper and e-books. Until then, they cost!

There is actually another cost, that of the consumer equipment required to read the media, but that comes after the cost to produce it and is not directly germane to the price. However, it is germane to the total cost of ownership. And shelling out several hundred dollars for an e-Reader is another factor arguing against equal pricing of book and e-book.

(Update - just reading some of the other articles, I think they are missing the fundamental point this shows - in other words there is a disruptive economic arbitrage between books and ebooks that will restructure the industry, whether it is wanted, fair, right etc etc is moot)

One thing does concern me though, and that is the potential lock in and DRM lock out that all these various proprietary eBook readers get.