My big aha for 2011

This past year for me was all about trying new services and technologies to solve core business problems for a changed consumer culture.

I downloaded scores of mobile apps. Participated in scads of betas for cool new products. Used web-based solutions for every possible thing I needed to know, do, purchase or share.

But the number one source for information, places to travel to, wines to drink, marketing tips or referrals wasn’t any of these new services, individual apps or even search.

It was my broad social networks and a few powerful vertical blog communities.

I have strong connections around my friends’ blogs and my own, but most of the information I get still comes from my social networks, especially the big three–Facebook, Twitter and Tumblr.

When I was in need of a new restaurant or wine bar in Paris, some consensus on whether social TV is a myth, data on vineyards in Friuli, Italy, the best source wasn’t Q & A services (there are many), or travel or wine apps, it came from my extended friend networks.

And if you are a business, you really have little choice but to look to these social networks as well to find customers.

Quite a surprise actually. Disappointing to discover that the deepest contextual connections are still within the broadest most horizontal platforms.

The irony is that a multitude of the smartest entrepreneurs are parsing the world of information, commerce and socialization to verticalize our life experiences with the intent of building more focused and efficient communities of interest.

The human experience has been dissected into atomic pieces and there are seemingly endless apps and community platforms targeting each one.

But few of them really worked for me.

I’ve got to wonder whether I’m the odd person out here. But I don’t think so.

Some of the verticals themselves aren’t a true standalone social behavior with community chops. Check in apps for movies and TV are for me a case in point. I’m a serious movie geek and share info often, but have not been able to use any of the many media community apps with any consistency.

Some are interesting but are missing the transactional piece as an offshoot of information. Wine communities (and there aren’t really any of import) have not solved the ‘how to buy’ piece and to hear about wine that you can’t find or buy is a non-starter. You end up with flash sales (Lot 18), media sites (Snooth) and a plethora of blogs with a lot of info but little sense of engagement.

Some are perpetually stuck in the chicken-and-egg state. They have no real value until they enough people and just can’t draw enough of a crowd to matter to the participants.

And many, as smart as they may be, are more product idea than market reality and are churning to find users without understanding their core promise or a sense of how community can inform their business model.

And some may be just too early to tell.

There are of course, a few that really work and set the bar high. But very few.

Look at Fred Wilson’s avc.com as an ideal. It’s a place with loose structure, deep context and strong leadership. It’s a magnet for the intellectually curious around the entrepreneurial endeavor. One of the real ‘places’ to hang out online. Arguably the most dynamic community on the web today. It truly adds to my life off and online, friendships and business both.

Small, still new, but with a more focused and smaller niche, for authors there are places like Wattpat. For knitters, Ravelry. For developers and programmers quite a few.

Music is a community vertical with deep success. Turntable.fm, exfm and Soundcloud are all remarkably exceptions, each in their own way. They really get who they are.

And on the marketplace side, Etsy and Polyvore stand out as communities driven around commerce.

What makes them all work, as different as they are from each other, is a sense of community.

Conversation and engagement are the key connectors. They may spawn commerce but they certainly forge a connection with real life. Friendships really do happen. As well as customers.

I’ve blogged on this theme of context as a filter and community as the core of commerce all year. It’s true and I’m convinced of its validity.

Yet it is just at its early beginning stages. There are remarkably few great examples. Maybe the time for them is just in front of us…like 2012.

Facebook and Twitter are powerhouses of connection, though not suited for conversation or engagement. Wildly heterogeneous and useful for certain of my vertical interests like marketing and wine, it’s just a matter of time before the communities relocate. This is a population without a base using Facebook as a proxy.

On Facebook connections do broaden but it is more exception than rule. You bump into interesting people then move the conversations elsewhere. You just can’t get to know someone there. It’s a nod of the hat, not a handshake.

Dynamic communities, many of them blogs are where life and business connections happen. There’s been a buzz that blogging is dead. Just plain wrong in my opinion.

The past week I’ve been reading all the year-end predictions. There are many. Endless lists of what will be hot and what not.

Mobile end points. Tablets. Cloud based portability of data. Personal empowerment. The driving force of individual passions. All very good and true as themes for the future.

For me though, the business landscape for next year is not about tools or new markets or waiting for the market to catch up with your innovation. It’s more about bridging the self evident market gaps.

Gaps between a population that has shifted in its consuming habits and businesses that are seemingly clueless in how to connect with them. Huge gaps in the platforms for referrals that really work. Gaps in financial services, travel, wine and community access to local services.

Not all of these are new. Many just don’t work yet. And almost all of them have tried to exist on Facebook. They are invariably the right idea in the wrong place.

We are at a time where community and marketplaces are both possible and needed. For information. For friendships. For business. And for social change.

We are at this unique, and very cool place where culture is changing, online and offline are no longer distinct, access to markets democratized, and technology a vastly powerful, affordable tool available to everyone.

This is all upside and possibilities.

And the simple truth is still key, that the web is not about commerce or information or things. It is about people. And that commerce and community will follow if you discover the right connection in a viable context for the people themselves.

This is nothing but opportunity for businesses and benefits for the consumer. The problem is  not scrambling for ideas but focus on which ones to pick.

2012…bring it on. I’m ready!

 

Conversational rant

Conversations are what make the social web work.

For me personally. For communities. For businesses.

There are large gaps between the conversational dynamics of Disqus-powered and WordPress blogs, posts on Facebook, comments on G+, remarks on FourSquare, Tweets on Twitter.

Each of them is useful. Though on their own no one is enough.

I’m increasingly isolated in these conversational silos. I’m stymied by the need to manually connect conversations between communities. It’s counterproductive and usually the true value of the social data is lost.

Links may be the universal currency of the web but they are more like monopoly money, less like value to me. I care what you think about something you share as much as what gets shared. Most of what we share is without useful context cross networks.

The handful of communities that have dynamic conversations are still uniquely separated from each other. We all spend hours following links, book marking them and bouncing around from referral to referral.

I so want the process of discovery to be fun. I’m fine with working hard at it but it feels random and primitive and somewhat arbitrary.

A few years ago, I wrote a blog post on the community potential of Disqus. How it could change how we find and interact with information and people. I was (and still am) inspired by this grand idea although less patient than I was then.

Disqus held the keys to the conversational kingdom with the data for some 1M blogs, 10s of millions of power commenter’s and innumerable comments across the web.

Disqus put granularity and detail on a dream world where each URL is its own community connected by threads to others. Some known, some in the process of being discovered.

Underneath this ecosystem of Disqus data lies an implicit future where a universe of suggestions could be fed to me just by understanding my interest footprint.

The more I express myself, the more I find what I want without asking.

Disqus may or may not be working on this. I don’t know. But regardless, Disqus alone is not comprehensive enough on its own.

Each of us has networks on other commenting systems and a multiplicity of social nets. These communities aren’t merging any time soon. Centralization needs to happen between communities, not within any one of them.

I’m dreaming hard for a conversational-based reality online.

I want to parse my world by conversations by topic by trusted connections daily.

I want a dashboard that lets me search:

-By topics by blog communities ranked by dynamics and engagement.

If I start the day on avc.com, for example, in a sub-string on Apple Airplay, I want to find out where there are dynamic conversations happening across the web on Airplay and connected TV.

-By trusted friends who are subject matter experts.

Something breaks around certification of organic wineries in Europe and percent of sulfites allowed for exported wines. Where is ‘the Crazy French lady’ commenting? Where are my wine expert friends from London and Portugal commenting? Where can I see this at a glance?

Google is useless for this. So is Disqus. Facebook is actually the best.

-By implicit generated interest graphs.

Look at any of your last 100 comments and a pattern of interests will arise. For me it will be on community, marketing, wine, travel.

Where is my daily leader board of what’s interesting for me without explicitly searching for it? Where is my recommended interest report?

Where is my listing of dynamically generated wine tastings that I would like in NYC this week with friends already signed up to attend? Or in London or Paris when I’m traveling.

I probably get 60% of the above in a couple of hours work each day.

The data is there. It’s just disparate, not mashed together in a human consumable form that is palatable for me. Or anyone.

Many companies are trying to solve this.

The launch of my friend William Mougayar (@wmougayar) Engagio alpha this morning is a great example. They are very early but they get the discovery/aggregation piece well. The code to get in the alpha of Engagio is engagearnold.

I want broad access to a human web interlaced by conversations connected by implicit suggestions.

So do many others I believe. Understanding social data is the Lingua Franca of the future. It needs to be understood between networks, not within any one of them.

The large social networks need to open their data to developers to build this in a multiplicity of shapes. For each of our needs. The networks don’t own the people but they do own the data. They need to learn to share more through their APIs.

Social data sharing will be better for me, better for everyone and equally, better for the networks themselves.

When I’m the center of the world, not the networks, I’m glad to participate in the ones that matter. I’m centered and flexible and easy.

When the networks are the center of the world and I’m a club member, I’m always looking for another club that will do what five of the others are trying to. I’m a migratory social animal always on the move and ready to jump. No allegiance at all.

Ok. Fun rant. Feeling better already.

 

Think large. Focus small: The myth of the niche market

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Remember when niche used to mean a market too small to matter?

Not any longer.

The flatter the connected world gets, the more relevant and attractive small and focused seems over broad and general.

A niche market approach is not only a valid business strategy, but a potential antidote for business ADD.

A redefining of the term ‘niche’ where too small to matter may very well mean focused enough to win.

A great post by Om Malik, “Dawn of the micropubs”, brought some granularity to this idea of a niche being a business model of choice rather than a market too small to care about.

Om’s point of reference is viable publishing micromarkets defined by passionate founders around focused content categories. Aggregated free communities supported by affiliate and advertising revenue. It’s a quality traffic play.

His data point that almost 50% of niche micromarket traffic sources are keyword searches is a reminder to all of us about the dynamics of search. The more specific the content, the more valid and useful the search results. This is an old SEO and SEM truth that plays well here. And for the business model, the more contextual and relevant the community that gathers around those interests, the more valuable lead gen and advertising eyeballs become.

Om’s thesis around micropubs, and one I’ve been applying to my accounts for awhile, is that a highly verticalised, independent model is not only workable, but often the best response to a broadly horizontal and unsegmented social world. Or simply, the social graph, Facebook defined, is really challenging to build a business or brand on. And it’s a mistake to make the center of your business anywhere but your own URL.

The sharp focus of a niche approach to business both deepens and broadens your market. A finer net captures more of the higher quality users rather than a larger sieve, which is forever churning for meaningful connections.

As Seth Godin said in his post today, “Products and services succeed one person at a time”. The more specific that connection, the more clarity you have on how to make that interaction successful.

I’m a big proponent that you get farther faster by focusing narrowly with intent as a starting point. This may seem obvious but whether you have an early product for which you haven’t discovered the customer connection, or at a later stage noodling over how to expand faster, singular, passion-point focus on single-need, customer connections just works.

Connecting broadly isn’t the challenge on the web.

Quality connections around relevant and personalized information and products is. A niche approach to market development focuses on this above all else. Boiling the ocean doesn’t work. Spamming your networks is not only ineffective but somehow rude.

I’ve blogged on the power of the niche community as a filter. Om’s post made me think about that this more broadly, as a model in its own right. A focus in market terms and a different perspective on vertical segmentation.

We’ve all done the vertical segmentation whiteboard planning drill.

You line up product specs and benefits, market size and customer acquisition costs, and create a tangled web of how you get from a product capability to a customer base. The narrower the customer focus, the crisper the message and the easier it is to target that market. The broader the target, the mushier the value prop becomes while the abstract value of the market increases. The balance between market size and acquisition cost and viability are the rules of that game.

Honestly, I worry little about projected market size and more about tangible customer connections.

Size matters surely–it just matters a lot less. It’s an abstraction not a goal.

This niche approach focuses on core market questions without interference or ambiguity:

Who are you and what do you have to offer?

The value chain is crisp and clear as there are fewer moving pieces.

You need to create the environment to discover what the core behavior is that binds your product value to customer desire.

How will you get found?

This is a natural search, keyword and category-centric based approach.

Search, direct and referrals are the funnel. This is not a revelation certainly but if these pieces are out of whack, the formula is broken somewhere.

Stripping everything away, putting aside gaming search and focusing on the ‘why’ will open the discussion of ‘how’.

What’s your true expertise and value?

Information is everywhere. Finding context to attach your needs to useful information in language you can understand is the kicker.

From healthcare. Legal questions. Travel. Diet. Exercise. Love even.

You personally don’t need to be the expert. Expertise may simply exist at the community level. Ask yourself what it is that your customers get from being at your site, in your community?

This is your customers bullshit filter. Authentic passion is the product of the niche marketplace. Knowledge and relevance are the language you communicate in.

No niche is an island.

Who are your natural partners?

There is interconnect between niches. Sometimes they are extensions of your product. Think about niche sports manufacturers invariably partnering with clothing and nutrition companies. They often end up developing their own branded products.

This raises the partnership discussion. Who can you partner with? Who will become your channel? Where is the best marketplace for your traffic?

On the web, proximity is not an issue.

Connections that matter are. Referrals that broaden your network are key.

In building the market for your product, there are no formulas. No boilerplates for success. No definitive lists of to-dos. But there are useful ideas that surface interesting questions that provide guidelines that help figure this all out.

I’m drawn to this niche approach to market making as one of the best.

Think large. Focus small…is my way of thinking about this.

It’s a minimal viable product approach but for the barest, most essential touchpoint. User value, customer wonderment or sometimes just pure fun is that connection to capture.

Find that for one customer and you’ve got a great start and a direction to find the next one.

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If you have examples of niche communities that are doing something right or just something interesting, please share in the comments.

“Why care? Why share?”

I’m not a big believer in the easy one-liner.

They are often overly clever and skirt the details rather than encouraging us to dive in.

This one does ring true to me. It’s become a personal mantra as I reexamine my online presence this holiday season.

I’m prodded to think smarter about what authentic value I bring to my clients, blog readers and friends. To stretch beyond just being good at what I do. It questions not my worth but the value that others perceive in me.

When I push on this thought, I end up thinking about personal referrals as the true standard of trust, the currency of my business life. Figuring out how to crack shareability, it comes down to the value of what I do in my community’s eyes. A plunge of self-discovery from my network’s point of view.

Asking ‘why my customers care and why they share’ speaks to why I create content for my blogs, Facebook wall and Twitter streams. It’s the intersection of self-expression and market perception.

It focuses me personally in a positive way.

I’ve taken it to my accounts, looking at clients’ product and community designs as a metaphor to understand why people in a community engage. As an actionable understanding behind the traffic numbers and analytics that we pound on daily to grow our businesses.

It’s just not enough to be excellent. You need to discover a community that inspires as well appreciates.

Your customers demand trust and want to value your interactions with them. The true connection exists more between you and them, more in the comments and the process, than in what they receive and consume.

If your customers feel connected, they will become your channel and support you through good times and bad.

Look at the chatter around Gary Vaynerchuck’s winelibrary.com credit card security breach. It’s all over the net. A nightmare for everyone, especially us, the customers.

My wine networks and Facebook pages have been abuzz about this. Not abuzz with anger at GaryV. The opposite. The community, rather than balking, are collectively aghast and supportive, not collectively angry at winelibrary.  They feel that the attack is on them and they rallied together.

People seriously like winelibrary.com. The business will live through this just fine. Other businesses would have folded. They may even grow as a result.

This highlights the truism that if your customers are there just to buy, you don’t have a social problem, you have a significant business one. You won’t get found. Your networks will never be enough. Your customers will simply not tolerate mistakes or appreciate your foibles.

No one is selling anything that can’t be bought somewhere else. From wine to cars to cold-pressed green smoothies, it’s all a commodity. Your business and your brand exists in the community space, the dynamic connection between your customers and you as a person or a brand.

Certainly, I’m a realist. We don’t love Amazon, but they treat the consumer really well. They are easy and personal to deal with. We don’t love Netflix either and they treated the customer like a line item on a profitability spreadsheet and every customer will be unconcerned if they vanish. No one will care.

“Why care? Why share?” is worth asking yourself. Especially in the face of what feels like an anti-social, back-to-basics business backlash lately.

In blog discussions and most conferences, there’s often someone with a rebel poise (usually young and successful) who reminds us with a smile that business is all about money.

True…but that’s not how you create value. Money is the offshoot of value, not the cause of it.

Customers and transactions are not the same thing. In almost every case, the customer is worth more than the sum of their transactions. This is true for almost every business, from yoga gear to running shoes to classic sports cars.

Every community will be different but the human touch is always its indelible fingerprint.

Before we earn our customer’s dollars, we need to earn their sense of belonging and astonishment, their satisfaction, and their finding value great enough to act as a leverage point to their networks.

We want them to care enough to share.

@dpinsen, a friend, entrepreneur in financial services, and brilliant pragmatist started a great comment string in my last post. At the core of the discussion is whether community and social loops are applicable across all verticals and types of products.

We are on opposite sides of this debate. He makes a strong argument that community is tied to passion and passion is not equal across all types of groups. He’s right to a degree, but I just don’t believe there is a business that can exist without the extended good will of its customers. And that good will is enough spark to build community on.

Community is an ideal with pragmatic hooks that are applicable to every business in every possible sector. Commerce isn’t about goods, it’s about people. It always has been, and the measure of value is somehow wrapped in customer’s intent to care enough to share.

Are the needs of my dentist, my vet, my doctor and my local wine shop all the same? No question.

Customer acquisition cost and churn is the largest expense and the biggest worry for all of these business. And these businesses couldn’t be more different.

Do I share a great wine on sale at my local shop 10X more than my satisfaction with the other services? Certainly. But social loops are core, without exception, to every branded service and product  I consume.

And even though the cost of services is completely different for every one, the value of a referral is paramount. To the vet where I bring my cat to the wine I’m having at the Thanksgiving table…referrals within a scale of relevance matter.

The “Why care?” “Why share?” phrase came from a presentation by Facebook’s Kay Madati at the socialtvsummit in New York last week. He was lecturing big media brands on how to effectively advertise to Facebook users. It was a salesperson’s ‘We are the platform’ version of ‘Think differently’.

He was selling an advertising platform. I heard a refrain on how to think about the culture of commerce in my world.

Understanding is iterative at its core. Ongoing and daily a new revelation. It’s been a great gift to have a question broad enough to frame the discussion each day in a new way.

It’s been really useful. I thought I’d share it forward.

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The social web is about people and culture, not technology and tools

I heard a speaker at the socialtvsummit talking about how we were moving from the invention to the application stage of the social web.

Oy!

Although well intentioned, the phrase is indicative of a big miss and a big misunderstanding of today’s market and what social media as a way of communications is all about.

Culture–not technology–is the magic and DNA of the social web.

We are not moving along a product continuum of market acceptance. Just the opposite.

Somehow this idea has cropped up that the social web is a science project for the technologist and a tool for marketers.

It’s as if product designers and web companies think that cultural and behavioral evolution is part of their product roadmap.

The big social nets today are prime examples of core cultural and human behaviors that found expression in a social platform. The potential of the tools are not ahead of the behaviors. They are not the drivers, but the recipients of a cultural shift.

The old adage of whether Facebook invented sharing or created a platform to capture the pent-up need of the mass market springs to mind.

There has been a market shift. Not yesterday, but over time and it’s now the norm. The powerful tools that we connect and navigate with are getting confused with the market itself.

Does this matter?

Yes, a lot. It is not just semantics.

With the exceptions of a few marketing thinkers, like Brian Solis in his new book, this very old post that he shared with me, and Gary Vaynerchuck’s core approach to markets, many in the business world appear to be looking through the wrong side of the lens.

There is an epidemic of tool and platform worship. A looking at the social web as a product and a unique gateway to a niche marketplace.

I think action and understanding gets diffused and misdirected if you consider the message within the media, Marshall McCluhen style. It’s simply not true at this stage of evolution.

Look at the big brands as an example. At first they needed to be convinced of the value of social media. That it was real. They balked and balked, then acquiesced. Then they ran scared and jumped hard on the need to engage.

But they–for the most part–are embracing the tools not the audiences.

Huge brands who are embedded in the very fabric of society are acting like nervous children who understand neither themselves nor their value nor their audience. Often the results are off target and mostly just boring. Push advertising in a social guise. Cause marketing as masquerade at times.

I’ve never bought into the myth that social tools are the new marketing. That new measurement system to understand social cues was a necessary component of business ROI. And least that the focus on tips and tricks and endless lists of must-do’s and how-to’s warranted focus.

Do a test.

Talk to any one camped out at their local Starbucks, working on their laptops or iPads. Facebook, Twitter, turntable.fm, Foursquare and a few vertical communities are their connecting threads to work and play online and off.

Now approach this as a company wanting to connect with them as customers. My bet is the first circle on your whiteboard at the office will be the network of connections channels you need to work in, not the why of what you are trying to do.

This is the epitome of the misunderstanding. The misguidance of many marketing and business plans today. Certainly you want to take the message to the place, the community. But the message? The meaning as distinct from just ‘sharing’?

The power of these new tools are immense. Distractingly so. But that is not the big change.

The market itself is. Culture in today’s connected world has shifted, even evolved, and our behaviors and the intricacies of our beliefs along with them.

This is not a lab where we are collecting data beyond our ability to interpret it.

Just the opposite. The world has already turned a corner and the majority of businesses are simply looking past the reality of the marketplace. They are focused on tools and tactics rather than the ‘why’ of this. The needs of their customers.

A few weeks ago on Fred Wilson’s avc.com, commenter @substrateundertow, in a conversation thread with me on education that ‘people & culture are the bedrock platform’. Well said and so true, now and always.

Marketers have just lost sight of this. Blinded by the wonders of the tools and the pure power of the platforms.

A while back I posted on my experiences with early communities with Atari and their BBS system. The value was in the community and culture, not in the connecting thread of the system itself. Tools have changed dramatically; core values of culture and behavior are still the basis for business success.

The connection gap, the knowledge chasm between brand and fan, lies somewhere in this realization.

Many, myself included,  have posted about the shift that occurred when the “C” in the traditional marketing planning bulls-eye changed from being ‘Company’ and became ‘Customer’. This is not rhetoric. It’s a reality that has shifted the core of commerce and communications. It’s not about technology, it’s germane and core to culture and behavior.

It feels somewhat trivial to rant on the obvious but the gap between companies and their customers looms large and a huge market frustration point. Most companies play on the social nets. But most are focused on the tool. On measurement systems to determine whether the tool is effective. This is  misfocused thinking from the  marketers point of view.

If you for a second forget about the Internet. The social web. And just think about the culture changes of the last decade.

A global consciousness across all age and economic groups. A necessity for transparency in all aspects of social and business life. An innate cultural disdain for lies and bigotry and inequality. Unlimited choice of where to buy most anything. The end of consumer goods scarcity as a value scale. The reality of the global local.

Huge changes.

Age, country, geography, culturally agnostic. The world has moved up an evolutionary notch.

If you are a company selling a product, stop and consider. Don’t think Twitter or Facebook. Think about this new customer in a new world social order. Figure that out. Tools will be easy to navigate. Messaging and value within these places and communities will become clear.

Asking questions is sometimes most of the way to the answer. Especially in a world where pivoting is akin to planning and iteration often the best strategy.

These three  are the ones I ask most clients and plan on examining in future posts:

-Why care? Why share?

If you can’t answer this about your customer, you are not ready to take any step towards your market place. [Please see my post “Why care? Why share?”. Be sure to check out the comments.]

-Is excellence enough?

Build a great product and the market will find you is not unquestionably true. Can you build your community and your channel into your product?

-Does your community want to talk about you, or to you? Or about something else?

Companies aren’t people. Your customers, if you are lucky, want to talk about the value of your product and it’s impact. To each other most likely. Are you self aware and self assured enough as a company to let this happen? To sponsor this? Figuring out the dynamics of your particular community is key and requires an open perspective.

Grab a whiteboard and map these out. Share what you discover and the new questions you come up. Let me know if they help.

 

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