Friday, July 9, 2010

Social Exodus? Or Social aggregation? A prediction on Google’s alleged Facebook Killer

You and I can easily be forgiven for not attributing the invention of the electric bulb to Sir Humphry Davy. In fact, we would be two among millions who make the same factual error. While it was Sir Humphry who produced the first version of incandescent light – the first electric bulb – it is Thomas Edison who successfully commercialized it.

Edison was the first to switch to a low resistance and cheap carbonized bamboo filament which allowed consumers to use electricity as fuel rather than the time’s much more expensive kerosene. He launched his test pilot in Manhattan where one could find investors keen on cutting-edge technology, where employees worked late into the night and had much need for better lighting and where the state-government provided favourable permits which was key for Edison's fight against the National Lamp-Maker’s Union. Edison’s company also patented a system for electricity distribution later establishing the first investor-owned electric utility.

In short, Edison didn’t just create a better light bulb. He created a system for the consumption of electric lighting by putting in place technology and investment, by finding his advocates and early adopters and by gaining endorsement from the time’s very influential stakeholder –the government.

Facebook wasn’t the first enabler of social-media. It did, however, create a very effective ecosystem for using social-media. One of the key elements of this ecosystem was allowing developers to distribute their own applications via facebook spawning a whole array of entrepreneurs. Facebook is leading the pack in consumer-behaviour research of social-media. For example, Facebook is now prepping itself to be the alternative to email which has seen a steep decline among teenagers, the next generation work-force.  Facebook’s Social Graph aims at allowing consumers to bring their social profiles to any supporting website. In short, Facebook is trying to do for the 21st century what telephones did for the 20th.

So when people claim that Google’s rumoured new social-media enabler, Google Me, is a facebook killer, I can be forgiven for being sceptical. It is true that Google has many more services than Facebook does. It has Orkut, Buzz, Gmail, Calendars, Maps, a new appstore etc. But it is difficult to simply replicate a system, aggregate old services and pray for an exodus of users from facebook to Google Me.

But while I don’t think Google Me is simply Facebook with new pants or an aggregator of old Google services, I do think the company is the Edison of our time. If anyone can get ahead of the curve and redefine social-media – it’s them. I think the future of social-media will be defined in three layers. So here’s the structure I would like to see on Google Me:

Layer 1: Social Aggregation As a consumer, it is your prerogative as to what social-media enabler you prefer to use. In fact, you may have multiple – Facebook, Twitter, Last.FM and Linked In for example. Layer 1 will aggregate each of the social-media that you use into one aggregated data stream. One way this could be achieved is by creating an App structure, where each service is added as an app and plugs in data to an aggregation interface that runs on an HTML 5 enabled browser. A truly open social-media enabler, like I hope Google Me is, will allow users to choose from a variety of options or create their own interface for data aggregation.

While I do realize third-party applications that achieve the same end exist today, the power of the above described aggregation comes when combined with the next two layers.

Layer 2: User-defined, privacy-enabled Scrobbers Think of Scrobblers as little lemmings that hang around your social-media gathering data and carrying it to areas that you specify. An Example: Scrobblers are used effectively by the service Last.FM. Scrobblers for Last.FM carry data about the kind of music you listen to on your audio device. This allows Last.FM to understand your music tastes and recommend music that adheres to those tastes.

Scrobblers can be applied to almost anything. For example: a World Cup Scrobbler could hang around your twitter feed to figure out which team you support. You could lead this scrobbler to a wish-list service which tells your friends – Whatever you do, DO NOT buy me the Italian Jersey.

Another example is allowing scrobblers to hang around your online grocery list. You can also aggregate that scrobbler to scrobblers from your online work-out routine and your web-connected weighing machine. These scrobblers containing your work-out progress, your eating habits and your body weight fluctuation could be sent to your physician or dietician.

The key to enabling wide-spread use of scrobblers by consumers and for new-product innovation by manufacturers and developers is establishing easy-to-use privacy policies. The user, for example, should be allowed to open some scrobblers to public use (example: clubs could use your audio scrobblers to contact you when your favourite bands are playing) some for personal use and some for private groups (example: medical data).

Layer 3: Open Social App Development Open Social was released by Google in 2007 allowing programmers to develop social network applications that run across a number of participating social-media enablers like facebook, MySpace etc.

With HTML 5 and the layer 1 defined app structure, Open Social could be extended to work with any kind of application with the ability to gather data from any social-media enabler (layer 1) gathering insights from any kind of Scrobbler (layer 2) – with a user-defined privacy setting. 

These apps can open up a world of innovation for hyper-connected services. Here are three examples:

  1. A messaging service that aggregates your email account, your facebook wall and private message board, your direct messages via twitter, your LinkedIn messaging board, your mobile SMS’s and your preferred chat messenger. This messaging service would function like your email, with wider contact options.
  2. An organizer that aggregates all your meetings, events across multiple social-media and events across the city highlighting the ones that you would prefer based on scrobbler data and your location around the city.
  3. A service that allows you to form ad-hoc social groups in a social locations such as a mall so that like-minded shoppers (found based on scrobbler data and location services) can comment about promotions and review products.
When it comes to Google, I am an optimist. While the structure I have defined above is a crude one conjured up at Starbucks on recycled napkins, Google Me combines some of the greatest product engineers of our time, working for months on the problem of how we use social-media. Furthermore, they are developing on an already strong, open ecosystem put in place by Google itself. A new Facebook? No! We are looking at a new, potentially revolutionary way of being connected.

Tuesday, June 15, 2010

Upcoming Book Preview - MacroWikinomics by Don Tapscott & Anthony Williams

It is astonishing how many historical/religious accounts relate to a stone tower. Not just any tower - but a tower built because of a collaboration of men and women. According to biblical accounts, this tower was built after Noah's crew of land-sick folk finally docked and well after the after-party. They built a tower so tall, it could almost tickle the toes of heaven! What happened next, is sort of unclear - like all parables are. But the tower was destroyed and all men and women were given different languages. The logic was simple - if you can't understand each other, you can't collaborate! If you can't collaborate - you can't really build very big parable-ic towers. Apparently, when the tower was destroyed, no one had yet dreamt up Google Translate!

This is as good a juncture as any to consider the European venture Plastic Logic which has developed a high-end e-reader meant for businesses to replace paper. While the company is based out of Cambridge, the marketing is done in Silicon Valley, the software is developed in India and the manufacturing is done out of Dresden and China (Refer this week's Economist for a great article on the state of European tech start-ups). This structure very simply allows the company to tap into the best specialties around the world and drastically reduce costs (accounting for inflation, the Egyptians almost definitely spent more money and time developing papyrus).

Mr. Tapscott and Mr. Williams talk about the rising importance of collaboration in their 2006 best-seller Wikinomics. On June 11th, I had the pleasure of attending Mr. Tapscott's presentation at the Toronto Mars Discovery Center about the September 2010 sequel MacroWikinomics.

The upcoming book seems to pick up perfectly where Wikinomics ends. Businesses have been amongst the first to embrace collaboration on a massive scale because it increases efficiency and reduces costs i.e. it creates massive and quantifiable value. That's how Plastic Logic is able to tap into a huge base of early-adopters in Silicon Valley, the technology expertise in India and the manufacturing efficiency and craftsmanship of Dresden and China.

MacroWikinomics argues that structures that govern our everyday lives will now need to embrace collaboration to create such value and the authors give great examples of how and where these trends are beginning to shape up.

Health-care, for example, is going to be a massive data set of information about you. You are going to change your role as a passive recipient of health-care and instead take an active role in creating your life and health package with your personal physician. If you were to, god forbid, contract an impossible disease, the best medicinal minds in the world can collaborate on finding you a cure. This is a world where types of diseases and medicinal expertise is dispersed by geography, high-costs and diagnostic-time - 3 dimensions that are set to considerably shorten.

Governments will begin to distribute more power to the people driving up accountability and down political agendas. Democracy is set to take a huge leap forward by engaging the previously disengaged youth from many nations (The Obama campaign being an excellent example of the change). This doesn't mean that the loudest voice wins - rather that minority voice also counts!

Structures will be re-written! To whet your appetite - here are the structures whose re-engineering the book chronicles : (1) Industrial Age Corporations (2) The Financial System (3) Newspaper (4) Government (5) Democracy (6) The state of global problem solving (7) Work (8) Media & Entertainment (9) The Energy Platform (10) Science (11) Health-care (12) Military (13) The Cities (14) Transportation (15) Food & Water

The internet and the evolving nature of collaboration provide a strong foundation for reaching new heights in all the aspects that are important today and in the future. But, the structures that we create must be able to hold weight. From the presentation, I get the impression that the MacroWikinomics provides an important framework for those towers to be built.

Net Change Week 2010 -The Provocation of Don Tapscott from MaRS Discovery District on Vimeo.

Thursday, June 3, 2010

How to use Social Media Monitoring (SMM) tools: Illustrated using a fake event involving really good coffee

Running a well-measured product-launch is a bit like the Coyote hunting the Road-runner. However, instead of blowing the Road-Runner up, the Coyote carves out new roads for the Road-Runner to run on. The Coyote then sets up to monetize on the Road-Runner’s obvious skill. Maybe he finds a way to convert the Road-Runner’s massive kinetic energy to electricity by constructing an elaborate acme treadmill under the runner. Or maybe the Coyote simply bets wallops of acme money on the Road-Runner’s odds of winning against prized race horses. And then finally, the Coyote retires to a beach in Florida watching the sunset while sipping margaritas.

The Road-Runner is akin to a brand and the Coyote is simply ensuring that the brand runs a course defined by consumer needs, macro trends in consumer behaviour and the tangible or intangible value that the brand may have to the Coyote!

And how do the Coyotes i.e. the corporations of the world monitor this data? There are a variety of methods. But over the last 18- 20 months, a new set of tools have emerged that have the potential to significantly add to the amount of data or reduce the cost of acquiring this data assuming a relatively small up-front investment – Social Media Monitoring (SMM) tools.

The problem is that there aren’t yet any standard best practices on using SMM tools. So many times, the need for SMM tools and their many potential benefits are downplayed as just being another thing no one really knows how to use.

As an advocate of SMM tools, I will try to illustrate how much can be gained through its effective use. To do this, I will make some assumptions about Starbucks’ new product – VIA. Please note that I have no idea how Starbucks actually measured the VIA product launch. I simply used it because I think they have done a great job of investing in web media.

So if you were Starbucks looking to make an entrance into the multi-billion dollar instant coffee market, you would be staring a conundrum in its face! Starbucks coffee is known for its great taste and quality coffee while instant coffee traditionally is not! Yet, instant coffee is too big a market to pass over and Starbucks desperately needs to widen its product portfolio in face of competition from the likes of McDonald’s.

So VIA is born. True, its instant Coffee, but it’s the best Instant Coffee there is. But, while it would have many of the benefits of the Starbucks brand, how much more would consumers be willing to pay for better instant coffee? How much would VIA cannibalize the sales of Starbucks’ regular coffee? And how will this product foray affect the Starbucks brand?

At this point it’s prudent to note that Starbucks has a vast investment in digital media. From a swanky myStarbucks website, where Starbucks co-creates products with its consumers to multiple smartphone apps. So social media is not the only source of data. Instead any data gathering strategy must include Starbucks’ entire media – from the store level at important geographical sites to its websites and apps to social media such as facebook and twitter. SMM tools only help with the last bit.

Once the strategy is laid out, Starbucks can aim at answering the most compelling questions it has. Let’s assume the four questions that Starbucks needs to immediately answer are below. We will use some metrics (Reference: Web Analytics Demystified) to garner insights from social media using SMM tools.
  1. How should VIA be positioned under the Starbucks product portfolio? How will the brand perception of Starbucks change for existing consumers? Should the primary goal of VIA be to get existing consumers to spend more money at Starbucks rather than on competing products or gain access to a bigger market? What is the point of no-return i.e. what consumer trends or opinions should precede a decision of discontinuing VIA?  
  2. How much should it be priced at? How much are consumers willing to pay for better instant coffee? Where does this price-point intersect cannibalisation over Starbucks’ existing coffee products?
  3. Innovation: How should the product be designed or what accessories can augment the product? 
  4. What are the locations where VIA can build advocacy? I.e. where will VIA be an instant success?
Starbucks might begin by doing a sentiment analysis on all their media. On social media, sentiment analysis generally uses studies in natural language processing, computational linguistics and text mining to gauge the ‘pulse’ of conversations. I.e. it rates a conversation on a degree of Positive, Negative or Neutral. The same methods can be used on web-media that aren’t social tools such as on the myStarbucks website user suggestions and comments. In-store data collection is a little more expensive, but not limiting. 

If as a part of their go-to-market strategy, Starbucks gives out free samples of VIA at their outlets to allow consumers to see how good instant coffee gets, it may be prudent to gauge sentiment both before and after they try out the sample. Measuring the degree of sentiment at these two time periods will provide a lot of information.
  • If Disparity is High and Pulse is Positive – This is a good sign for VIA, but higher the positive numbers, greater the chances of cannibalization from regular Starbucks coffee.  [After all, most of the people who will try the free samples would be regular Starbucks customers]
  • If Disparity is High and Pulse is Negative – This is not only a bad sign for VIA, but the Starbucks brand equity may also suffer. This may be a good time to think about plan B!
Once Starbucks gauges brand sentiment, it needs to know the characteristics of the consumer base that is taking part in conversations about VIA. Starbucks can:
  • Measure Share of Voice
    • [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (Starbucks + Competitors like Second Cup)] 
    • [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (VIA + Instant Coffee Competitors like Nestle)] 
This metric is measured as a percentage over a given time-period. A good baseline that can be used is the market share of the brand against competitors as determined by a source such as revenue.
  • Measure Audience Engagement: Audience engagement provides a snapshot of how many people are engaging in conversations about Starbucks and VIA. This metric needs to be continuously monitored through the lifetime of the campaign
    • [Total number of Comments + Shares + Trackbacks on various web media] / [Total number of conversation views]
Audience Engagement allows Starbucks to answer question 1 and also question 4 – since it ties specific events / conversations to specific locations (within reason). For example, if a musician’s event sponsored by Starbucks in Kingston, Ontario results in a spike in conversation about VIA, Starbucks knows that there’s something worth looking into over there. This also helps answer a part of question 3 by allowing to view the main participants in important conversations. 
  • Measure Conversation Reach: Conversation reach is the number of unique visitors who participate in a specific brand/issue/topic conversation across all the media being measured (this includes the myStarbucks website).
    • [Total People Participating]/[Total Audience Exposure]
Conversation Reach helps answer Question 4, but also, if gives snapshots of how conversation about VIA is growing as tied to a specific marcom event.

Equally important to understanding what people are saying about VIA is knowing who is saying things about VIA. For a new product launch, it helps to have strong advocates on your side. But choosing the right advocate is a little difficult. SMM tools may offer some reprieve.

Starbucks should, well before the VIA launch,
  1. Create an advocacy program where advocates are motivated / incentivized to truthfully advocate their position on the new Starbucks VIA (Note the adverb truthfully. While ethically important, these advocates may also become the consumer’s representatives, giving Starbucks massive potential to co-create innovative, new or complimentary products/ services)
  2. Measure influence of each advocate – on all media
  3. Measure the effects of the advocacy program – Some baseline is required to measure ROI
The metrics that will help measure advocacy are:
  • Measure Percent Active Advocates:
    • [Number of Active advocates in past x days]/[Total Advocates]
This metric measures the number of active advocates creating positive sentiments for VIA. This is important as it gives Starbucks information about how much they may need to step up their incentive programs during critical stages of product launch.
  • Measure Advocate Influence:
    • [Unique Advocate Influence]/[Total Advocate Influence]
This metric measures each advocate’s influence thereby helping Starbucks structure an incentive plan. This is a measure relative to the other advocates in the program which allows Starbucks to rate their advocates in order of importance.
  • Measure Advocacy Impact:
    • [Number of advocacy driven conversions]/[Total Volume of Advocacy traffic]
This metric, while difficult to measure, provides a strong case for all the marketing incentives and promotions the product launch team at Starbucks conjures up. Starbucks, as mentioned earlier, has very strong infrastructure in place already. And given that many retail outlets are now going ‘social’ i.e. allowing consumers to connect to their social networks on the likes of facebook from the retail stores or from their cellphones, web-based media is a great place to monitor for mentions of recommendations.

Of course, Starbucks needs to establish some further criteria to tell if advocacy is working. This could be by using focus groups or loyalty cards or the usage of location-based tools such as Foursquare to count the number of visits to starbucks per week. Such data could then be correlated to a breakdown of the products purchased or the amount of advocacy that a frequent visitor engages in on social media.

Finally, metrics for innovation can be generated with the help of SMM tools. Sentiment Analysis to see what consumers think of a product / service , Topic Trends to see what consumers would like to see and outright suggestions for new products on services like myStarbucks would allow Starbucks to co-create value with the consumer thereby building up on its already strong consumer base.

Monday, March 1, 2010

Apple's strategy with the iPad

2001 changed the world in more than one way. The year saw Apple’s i-debut with the iPod. Apple revolutionized the way you listen to, buy and carry around music. It essentially created an ecosystem that led people in swarms to first buy a personal music player and then customize that player via iTunes making Apple the leading retailer of music.

Apple once again played out its magic in 2007 with the iPhone. By designing a smartphone around third-party apps, Apple created the infrastructure for a highly customizable mobile experience. Where the Nokias and the Blackberries of the world solved a specific problem (such as uninterrupted access to emails) and provided apps as an add-on, the iPhone became a general product with an unlimited availability of customization options via apps.

Apple’s adept at creating devices that are the center of your world. Its ingenuity comes from creating generalized products for a world obsessed with customization.

So what’s up with the iPad? An iPhone on steroids? No multi-tasking, no USB, $499 for 16 GB, no Adobe Flash support?? With its namesake, you can safely argue that the product name has absolutely no sex appeal. Has Apple failed to deliver a game-changer this time?

I don’t think so. Remember- measured by absolute sales, the iPhone wasn’t a game-changer until its third generation. With the iPad, I believe Apple’s doing what they have always done – they’re experimenting. 

The world is being overrun with a deluge of information and the most successful content providers will find a way to disseminate information for its target consumers. The NY Times, BusinessWeek etc. – these are the kings, queens and lords of information and the iPad tries to breathe life into these estates of old. 

Apple’s not trying to make a new kind of computer. If they were, they’d be shooting themselves in the foot. Nor is it creating a new communications device. It’s instead creating a generalist product that isn’t really targeted at any one segment of user. The product instead acts as infrastructure for disseminating information.

Interacting with a device like the iPad isn’t new to the user – thanks to the iPhone that successfully broke the user away from the limiting stylus. The iPad therefore doesn’t require the user to learn a new language – Apple’s made sure of that. 

The iPad is simply a bigger and better toy for the world of apps to play with.  To the consumer, it provides two major benefits:
  1. Entertainment: Games, Music, video and e-books- the iPad allows users to carry their content around with them while augmenting Apple’s online retail business.
  2. Disseminating Information: Allowing massive customization via apps, the iPad provides users with a better way to organize the information in their lives than a limited device such as a phone or as sophisticated a device as the computer
The lack of flash support and the limited memory space on the iPad are annoying traits – but Apple’s just trying to figure out what will work when innovative new apps hit the app store. It’s counting on the early adopters, the programmers and the businesses that work on its hardware to tell it what they want.

I believe that the iPad is a game changer and the corresponding increase in sales will occur with the next couple of generations. Here’s how I see it playing out:
  1. Initial iPad sales to early technology adopters, brand loyalists etc.
  2. Apple pushes the Apple bookstore with more partnerships and titles to gain enough supplier enthusiasm in the channel to spur innovative information dissemination techniques.
  3. Release of new, innovative apps that wouldn’t have worked on the iPhone platform – These apps will be targeted to specific user groups. A good example is a presentation app that allows speakers to organize their slides in real-time (i.e. during their presentation) as explained here.
  4. Further push on iPad based games, productivity applications etc. Apple will probably allow programmers to easily migrate their development projects between the iPhone and iPad developer SDKs.
  5. Apple uses this time to determine the features most important to suppliers and consumers – example: Is it Single or multi-tasking? Flash support or HTML 5 support? More storage space? Etc.
  6. Software upgrade or next generation of iPad hardware will be released.
Apple’s Vice President of Design, Jony Ive, probably puts it best. The iPad is just one large piece of glass. There’s no pointing device - you use only your hands to interact with it and you can use whatever orientation you want. There’s no up or down with the iPad - It’s designed to be customizable to its user’s preferences. 

But there may be a thorn in Apple’s plans. App releases on the iPad are strictly policed by Apple’s screeners. For an experimental platform, this may severely limit innovation. On the other hand, it allows Apple to govern the kind of projects that prevail on the iPad. What do you think?