97 posts categorized "Social Media"

The light goes off: social network business models could use some imagination

A huge problem for innovative social media companies has been that they turn out not to have been innovative at all, not where it matters.

Sure, they are (a) innovative technically, and they (b) know something about marketing (either that, or they recognize what is energizing users to grow the network, and they do smart things to nurture and enable those patterns of use).

400428874_e087aa720d_zTo date, however, all the big players have failed miserably when it comes to innovating a new business model.

As Jaron Lanier is quoted as saying in a Joe Nocera column in the NY Times this week, "If Google and Facebook were smart, they would want to enrich their own customers.”

So it's really satisfying, and inspiring, to see Fred Wilson's post today, and the comment thread, Mutual Companies.

I don't know if a mutual company form of organization and ownership is the right solution for the problem, but to float the idea at all is to break the automatic assumption that innovative social media startups should be shoehorned into tired, duplicitous and, for the digitial age, regressive business models of the 20th Century.

Here are some earlier posts that reflect my thinking on the topic, and the insights that my friend Mark Byrnes shared with us:

 Photo: grendelkhan / Flickr.

How long should it take Facebook to give users control over their personalities?

Reference is hereby made to the post here of Saturday last, Facebook's own healthcare.gov-like debacle.

The issue before us is, how long should it take Facebook to build a control that notifes a user that her name and/or likeness has been used to endorse a product or service, and to allow that user to kill the use of her personality rights in that ad?

8480754834_888d738c9b_zTo paraphrase the Facebook spokesperson quoted in the NYTimes article prompting Saturday's post, "these things take time."

I reached out to five coders I know and highly respect, got answers from four of them, and will attribute quotes to two of them, with permission:

Dan Carleton told me that building this feature is not as complicated as, say, fixing healthcare.gov:

"So what they are talking about is adding a system where you can be notified if you appear in one of these ads, and they’re adding a preference that you can opt out of appearing in these ads, right? So they already have a generalized system for sending different kinds of notifications to users, they already have a generalized system for tracking privacy settings and opt-in and opt-out, right? So those two major components are already there. So this is just a new type of notification they need to send people that appear in one of these ads, and a new bit they need to be able to flip per person as to whether or not they want to be in one of these ads, and then they just have to propagate the value of that bit down into the ad-serving platform. It just doesn’t seem that hard. It’s mostly a matter of priority. As a feature, in terms of surface area, in terms of how big a team you would need to accomplish it, in terms of just the integration issues you have to work through, it doesn’t seem like the team would have to be that large. Maybe four people working on it for a month and a half?"

Jason Thane told me that the problem is not really a technical one:

"A company like Facebook likely has many tiers of test and measurement for any new features that end up deployed as part of their product. So, though such a feature may be simple to build from a technical perspective, the challenge probably lies in crafting the messaging and positioning within the product such that the feature won't produce the kind of resentment several of their other privacy-related features have in recent memory. That's a taller order than any specific technical hurdle."

A third friend told me he couldn't comment, given something he is working on right now for a different company.

A fourth friend told me my knowledge of what actually happens, on the ground, on Facebook, is out of date:

"I took a look around Facebook and I can't find any examples of names or likenesses being used in onsite advertising anymore. I don't see it as an option in the advertising setup anymore either. I remember this summer when I was running . . . ads you would see social information about who was playing, liking the application but I'm not seeing it anymore."

Photo: zombieite / Flickr.

Technology & Marketing Law Blog now accepting comments

A favorite blog of mine is Eric Goldman and Venkat Balasubramani's Technology & Marketing Law Blog.

Capture132It's probably the best blog, month in, month out, on the law around social media - from copyright to privacy to the various indignities that social networks impose on (too often unsuspecting) users.

But I've long been frustrated at the inability to comment on Eric's or Venkat's posts.

Not anymore! Check it out, they have pulled in Disqus now!

Twitter's non-asymmetrical business model

I read the "Business" section of Twitter's S-1 last night. Three things struck me.

1. HAPPY TWEETER. I continue to have affection, regard and loyalty toward Twitter. Though I'm not sure about the company currently serving as the steward of the service, Twitter is the only engaging, useful social media tool for me these days. (I still use Foursquare, but not to socialize as much as track and plan my own movements; since that company abandoned the service's "Discover" feature, Foursquare has become more of a diary.)

6a01156e3d83cb970c019b00184970970c2. WHERE IS DON DRAPER WHEN YOU NEED HIM? The commercial tweets featured in the disclosure are banal. One is an ad for Oreo cookies. I like Oreo cookies, but I don't see anything clever about tweeting about Oreo cookies when the lights go out during the Super Bowl. Another is a commercial for Wheat Thins. No question, another familiar consumer brand, but so what? The placement of these ads in the Twitter S-1 must be there for the sake of advertisers and marketers.

3. FLAWED BUSINESS MODEL. The disclosure posits that Twitter isn't a social media service at all, but instead is the next, singular development in the evolution of the Internet. Again, pandering to advertisers. The people I engage with on Twitter use it as a social media service. And here's Twitter's fundamental business problem: by detaching users from the revenue model, Twitter runs the risk of undermining the very asymmetry and user control that makes the service appealing to the users who feed the service with the most original content.

The disclosure virtually apologizes for not generating revenue from users. The cure for that is to go ahead and let users opt in and pay for a version of the service that they may continue to control. Advertisers, too, would be well served by such a move; why should they pay to expose their brands to users who resent the intrusion?

Twitter's business model needs to become asymmetrical.

Weekend Read: WSJ Accelerators Post on Pitch Events and General Solicitation

This weekend please read an article I wrote for The Accelerators blog of the Wall Street Journal, The Trojan Horse of Accredited-Investor Verification.

6960882500_cc7fccd4d4_oThe piece gets into how some angel groups, pitch event promoters, and demo day organizers are dealing with new Rule 506(c). Basically, the days of a de facto industry practice of ignoring the Rule 506 prohibition on general solicitation and general advertising are over.

Now that it is okay to generally solicit, it's also time to come to terms with what came part-and-parcel with such over permission: the need to take reasonable steps to verify the accredited status of all purchasers.

It's going to take some time for the ecosystem to sort things out.

Check out this Pando Daily post that Doug Cornelius quoted from in his weekly roundup post. Do you think the newly conservative steps demo days promoters are taking, as recounted by the Pando Daily reporter, Erin Griffith, cut the mustard?

Please do read the piece for the WSJ Accelerators!

Photo: D Services / Flickr.

The importance of Twitter being unimportant

Speaking of Facebook, consider this sentence in an interesting New York Times article about Twitter's anticipated IPO:

"Messages flow in continuously, most recent on top, without regard to their importance."

It's describing how the Twitter service works.

The voice is, of course, objective journalistic indifference (or affectation of such), but how loaded is that final clause, "without regard to their importance."

6a01156e3d83cb970c019aff5d02f9970bThe implication is that each unique message must be evaluated and its order arranged (other than by time) to escape the gravitational shame of randomness.

Or, more insidiously, that user curation (both by sender and recipient, the latter having chosen which users may publish to the stream) does not compute.

An algorithm might rank messages with due regard to importance. The importance to an advertiser, say.

My fundamental problem with Facebook was that I had no idea whose agenda was cherry-picking the stream. I knew the agenda wasn't mine.

Yeah, Twitter has ads. I hate them. I report them as spam. I take modest measures to signal to the Twitter servers that I'm the kind of person they want to go easy on with the ads.

When the Gates Foundation buys Twitter, the company - and why not go public; it will facilitate such a move - the ads will be gone, and we will truly have a messaging service of no importance.

Mark Byrnes on Jaron Lanier's "Who Owns the Future?"

Note from Bill: this post is a Q&A between two college roommates, yours truly, and Professor Mark Byrnes, a historian who teaches at Wofford College in South Carolina and blogs at The Past Isn't Past. Mark visited me and my wife in Seattle this month, and while he was here, read my copy of Jaron Lanier's critique of the direction of the digital economy, Who Owns the Future. Mark's take on the book is more informed, politically and historically, than mine, so I asked him to entertain some questions.

Mark_1Lanier's argument, that the internet is being used to shrink the economy and destroy the middle class, you said in conversation that this was essentially a Marxist critique. Can you expound on that?

MB: It seems to me that Lanier's analysis echoes much of what Marx had to say about the dynamics of early industrial capitalism, in particular when Lanier focuses on the tendency for the market to produce "winner take all" results. Marx believed that market forces would eventually lead to greater and greater concentrations of wealth, leading to a very small ownership class, a virtually non-existent middle class, and a massive working class that would then rise up and overthrow the system.

Lanier applies that same insight to the modern information economy--in his formulation, the "means of production" have become the "Siren Servers."

Is Lanier a communist, then?

MB: No, not at all. He makes that very clear. His goal is not to overthrow capitalism, but to save it from itself--the position of most American progressive reformers since Theodore Roosevelt.

One of the few unfortunate consequences of the fall of the Soviet bloc and the collapse of communism as a governing philosophy is that it has, for most people, discredited *every* aspect of Marx's thought. I'd argue that Marx was (inadvertently) one of the best friends capitalism ever had. By diagnosing the self-destructive tendencies of capitalism, he alerted capitalists to them. The most enlightened capitalists recognized the validity of Marx's diagnosis and then worked to mitigate the worst aspects of the system. They thereby helped it survive, reforming the system in ways Marx never believed it could be. He scared capitalists into saving capitalism.

That's the role I see Lanier playing. He sees his fellow technologists pursuing what will eventually be a self-destructive path, and is warning them (and the rest of us) of the pitfalls that lie ahead, ones that are for the moment obscured by the hype, the messianic vision, and especially the short-term profits.

Marx was misled by his economic determinism. Lanier, by contrast, applies a humanistic belief in our agency as individuals and groups in society, and believes we can choose a different path. That puts him in the category of enlightened reformer.

What is a "levee," in political terms?

MB: I find this to be one of Lanier's more useful ideas. To doctrinaire free-market ideologues, these "levees" (such as labor unions) are unjustifiable and artificial impediments that distort the market and reduce its efficiency. Lanier understands that an apparent short-run inefficiency can in fact produce greater long-term efficiencies. That has been the underlying premise of the regulatory checks on capitalism that have emerged over the last 150 or so years.

You said during one of our conversations that Lanier's solutions are less important than his critique, his analysis of what is wrong. What do you think of his stated hope that some real smart, real powerful people can sit around a table and reverse the course that commerce is now on?

MB: My understanding of American political history tells me that it will never be that simple. Unfortunately, our political system seems to need periodic shocks to produce substantive change. It took the depression of the 1890s to give rise to the Progressive movement; it took the Great Depression to give rise to the New Deal. Ironically, the 2008 financial crisis may have been prevented from providing such a shock, because government intervention saved the economy from the worst potential consequences of the economic meltdown.

The current kerfuffle over the NSA surveillance has, I suspect, alerted many people for the first time to how pervasive big data is, but it is an open question whether the unease many of us feel over that will bleed over into concern for the big data collected by private concerns.

Does Lanier lend you any new arguments in your crusade against popular infatuation with MOOCs?

MB: It certainly gave me a new way of understanding the driving force behind the MOOC movement. I had previously viewed MOOCs primarily from my perspective as a professor and educator, and bemoaned what I saw as the inevitable decline in education quality if MOOCs were to become widely used and accepted for academic credit in higher education.

What Lanier helped me see is the way the MOOC model fits the larger paradigm of the information economy: a business gains attention with the promise of providing an ostensibly "free" product to the public, while trying to monetize the data collected by their servers from those who avail themselves of the "free" product.

Quite coincidentally, you introduced me to Lanier's book just as I received from a colleague a link to the contract between the University of Michigan and Coursera. One of the ways in which the company foresees monetizing its MOOCs is to sell information about student performance to prospective employers. It had not occurred to me that a MOOC would also serve as a way of accumulating data on students which could then be converted into profit.

As with the trade-offs Lanier describes in his discussion of Facebook, the initial appeal is obvious: the student is offered "free" help with job placement, but at the price of ceding privacy about course performance. Imagine if a college or university offered to sell a prospective employer the right to not only see a student's grade in a particular course, but all the tests and papers submitted!

Will you still use Facebook after reading this book?

MB: Probably, in part because of the power of its "too big to quit" status. But Lanier has certainly made me more conscious of the trade-offs involved in continuing to use it, and I suspect I will approach it with a somewhat different mindset in the future.

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