Building a digital “home” in the social landscape is much like building a physical home – on quicksand. If you don’t believe me – let’s look at some of the trends that have happened over the summer…
Facebook’s IPO Woes
Let’s face it – Facebook insiders played the market like a well-tuned guitar. All the insiders got in on the action pre-IPO, and the retail investors were buying their exits during the IPO (and as insider shares become “unlocked” like Peter Thiel’s). But more concerning is the underlying challenge to value a social media company.
Remember – and this is important – in the social media space, the “users” are not the “customers“. Unlike most companies in the public markets, the usage numbers reported by Facebook (things like 1-billion user counts) aren’t anywhere near the same as reporting massive growth in direct & advertising revenues. Imagine if Disney started reporting the number of people who looked at a Mickey Mouse image as its foundation for growth. So – Facebook stands at a crossroads. Buck the demands of a public market and just build stuff with no regard for revenue growth OR start changing towards revenue objectives. Let’s be honest – if Facebook can’t break estimates in another quarter or two there will be no place for the C-level to hide.
Twitter Throwing a Wrench at Developers
This one hit me personally – Twitter is announcing a shift away from distributed free-to-build development and jumping over to a more managed API with much stricter usage requirements and greater control over the developers themselves.
To the casual observer, this is akin to a franchisor simply creating new rules for franchisees. It makes sense to Twitter from a business perspective; but it also has serious implications to the nature of Twitter. There has always been something awesome about the platform and its “plant 1,000 flowers” approach to their open API. Their new API restrictions are basically this: You can build trinkets for Twitter – but we’re getting in the business of managing the customer experience for our users.
They have to do this. Twitter has provided a great deal of liberty to developers – and they’ve grown dramatically (and with great fanfare for casual & heavy users alike). They haven’t had nearly the issues that Facebook has had in terms of privacy concerns and overbearing policies. But they’re running out of time to not have a successful business.There is only so long you can build until even the nicest Venture investors desire an exit. There’s little liquidity in the Twitter investment marketplace – and without either (a) a buyout or (b) a public offering – those investors are going to want to see results. Soon.
What this means is that Twitter (over the next 6-12 months) is going to consolidate the best talent it can find at high-performing development shops. I would also expect to see:
- An analytics offering from Twitter: They’ve shifted linking over to t.co virtually across the board. I’d expect a “Google Analytics”-esque solution from the blue bird with a premium offering for corporate customers.
- Increased promoted Tweets: This is just a natural extension of the monetization demands of running a business like they are. Hopefully, they’ll improve the quality of promoted tweets so that they match the preferences of customers and increase the net ROI.
- A growing push towards “Hubs”: Twitter has shown several examples (NASCAR and Olympics) of building centralized hubs for shared content. It’s the inevitable progression of having so much damned data – filtering the most shared or the highest profile material to central sources that Twitter can control and monetize. I expect that shopping / ecommerce will make an appearance in the coming months as well. Twitter.com/Christmas anyone?
Courting Developers in App Net and authors in Medium
The last couple weeks has also shown some new potential players in the space. I’m not sure if App.Net is going in the right direction, but it has sparked some interest in a fresh alternative to Facebook or Twitter. The emphasis on the network is two-fold: the ability to feel greater in control of personalized data – and the ability for developers to build, build, build.
Unlike Diaspora – which didn’t ever quite get off the ground with enthusiasm – App.Net has garnered serious interest from high profile social media insiders. It has the ingredients: Influential Social Media jump-starters, promises of a “better” experience, and developer interest (right at the point where Twitter is shunning those same developers).
The only thing that seems missing is what I think the chefs on Food Network would call “Flavor Profile.” App.Net hasn’t really clearly defined why it’s fundamentally a better communication medium versus the entrenched players. It doesn’t have Twitter’s 140-character constraint – and it obviously can’t match Facebook’s powerful network effects. Social is a popularity game – the more people that are there, the more valuable it is. So it’ll be interesting to see if App.Net can conjure up a flavor that appeals to end-users while also providing an environment for developers to build & explore just like they’ve done with Twitter and Facebook (and cannot do with Google+; which I believe is WHY that network continues to languish and is a totally different topic for another day).
The other front that opened recently is the latest shot-off-the-bow from Obvious Corp (by the original founders of Twitter) in Medium. Here’s what it looks a lot like: What Twitter “hub” pages will evolve into. It’s Flipboard-redeux – but with more curation and less randomness. Consumers have shown in their interest in Pinterest that they want the ability to sort and organize the beautiful, thought-provoking, and emotionally-relevant parts of the web. Remember Rebel Mouse (that was hot for about 4 days), Storify, Twylah, and all the other curation platforms? There’s good money to be made in centralizing “shares” and “likes.” End-consumers want to see, touch, and FEEL the Internet. That’s going to matter in the coming months and years as personalization evolves.
What it All Means
In the end – the only constant of this new and growing web is the fact that it’s shifting today – just like it shifted yesterday and it’ll shift tomorrow.
From a management perspective, the fundamentals are still true: Create a focal-point for your organization that is measurable and results-oriented. Own it. Maintain it. Learn how to get the most from it. Use each of these 3rd-party Social Media channels as an opportunity funnel - not the be-all-end-all of your business operations. Create relationships with people not profiles. If you’re simply categorizing 3rd-party profiles, you’re just building their businesses – not your own.
Keeping an eye on these moving parts means there’s plenty of opportunity to throw time and money and upcoming networks. Its worse if your brand needs to connect with large volumes of people or needs to appear on the front-edge of the social-media cutting edge. But investing measurable amounts in numerous places will allow you to see which one of these emerging shifts will matter to your bottom line.
Thanks for reading! Let me know if you think I’m barking up the right trees – or if I’m missing the forest entirely.