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Content is Dead, Community is King? The Promises and Risks of Social Networking in the Information Industry

David Teten — Fri, 02 Nov 2007 14:51:45 GMT

My colleague Jesse Mandell took detailed notes on the recent SIIA panel on Brown Bag Lunch: Content is Dead, Community is King? The Promises and Risks of Social Networking in the Information Industry". You can view the web broadcast at no charge here.

Panelists:
Leslie Forde, VP of Strategic Alliances, Communispace
Leslie is a member of Communispace’s Management Team and is responsible for developing strategic partnerships with customer-focused organizations including marketing consultancies, advertising and public relations firms. She helps Communispace’s partner companies to effectively leverage customers by bringing them into the marketing conversation. Partners such as Ogilvy & Mather, Edelman and Digitas are using communities to deliver more value to their clients: to differentiate their brands, drive greater advocacy, foster loyalty, and overall, to improve marketing effectiveness. Leslie is a frequent speaker on hot topics such as: creating online customer communities, customer engagement, Web 2.0, social networking, and word of mouth. She sits on the Word of Mouth Marketing Association’s leadership committee. Leslie is no stranger to creating effective partner alliances. Prior to Communispace, she was the Corporate Sales Director for Cook’s Illustrated and managed channel sales and marketing efforts across all products including: retail book distribution, sponsorship for the public television show ‘ America ’s Test Kitchen’, and alternate circulation programs for multiple publications. Prior to Cook’s, Leslie was a Vice President at Northern Light Technology where she managed sales, marketing, and business development efforts in the US and abroad. She moved to London to launch the company’s International Division, where she lived for over two years and grew enterprise clients and alliances by over 300% within the first six months. Previously, she held marketing and brand management positions with Xerox, Bausch & Lomb, and Allstate Insurance.

Kim Kobza, President and CEO, Neighborhood America
Kim Patrick Kobza is a co-founder of Neighborhood America and has led the company through its growth and development since 1999. Mr. Kobza developed many of the original concepts on which the company is founded, helps drive its ongoing vision, and is responsible for revenue growth.
Mr. Kobza's diverse career is characterized by involvement in leadership practices and community building. His background includes education and practice in economics, business, and law. Kim Kobza is a visionary and frequently speaks on the importance of leadership and community building in both business and public disciplines.
Mr. Kobza participates in ongoing education and leadership opportunities with many national leadership organizations and is a graduate and frequent participant in the Harvard Executive Leadership series on Cross Boundary Collaboration. He holds a J.D. from Wayne State University ; B.S. degrees from Central Michigan University in the areas of Economics, Mathematics and Earth Sciences.

Scott Parry, General Manager, Reuters AdvicePoint
Scott Parry has over 15 years of experience in the financial industry. His experience includes building and marketing financial information products and leading the development of innovative online brokerage services. Currently Scott is the General Manager of AdvicePoint, Reuters' Web 2.0 online community that connects investors, financial advisers, and investment product companies.
Previous to Reuters, Scott was the VP of Institutional Sales at Invesmart Advisors. Scott helped found Ameritrade Institutional Services and managed Ameritrade Retirement Services and Ameritrade Corporate Services. Scott was responsible for the creation of numerous online brokerage/information services.
Previous to Ameritrade, Scott was the VP Sales & Strategy for Nelson Information, a division of Thomson Financial where he drove the rapid growth of Nelson Information from a print directory publisher to an online information provider.
Scott has a BS from Charter Oak State College with a concentration in organizational management and is working toward a MS in internet technology at Pace University . He holds Series 7, 24, 63, & 65 brokerage licenses.

David Teten, Founder and Managing Director, Nitron Circle of Experts
David Teten is Founder and Managing Director of Nitron Circle of Experts, an Evalueserve company. Nitron is a research firm which provides institutional investors, corporations, and law firms with industry insights from a network of frontline industry experts. David was formerly CEO of Nitron, which he sold to Evalueserve. He was formerly CEO of Teten Recruiting, which he sold to Accolo, the 2006 fastest-growing private company in the San Francisco Bay Area. He was also formerly CEO of GoldNames, an investment bank focusing on serving the internet domain name asset class. David worked with Bear Stearns' technology/defense Investment Banking group, and was a strategy consultant with Mars & Co. He is an Advisory Board member of Accolo, Grouply, and the Word of Mouth Marketing Association. David is the lead author of The Virtual Handshake: Opening Doors and Closing Deals Online, the first book about how to sell, market, and close deals more effectively with online networks and other Web 2.0 technologies. He runs TheVirtualHandshake.com resource site and blog and co-writes a monthly column for FastCompany.com about Web 2.0 technology. David is a frequent keynote speaker to finance and technology conferences. David holds a Harvard MBA and a Yale BA and lives in New York with his family and two notebooks.

Moderator:
Karen Christensen, CEO, Berkshire Publishing Group
Karen Christensen is publisher, entrepreneur, and author specializing in global issues who began her career in London and founded Berkshire Publishing Group in 1998. She is editor/publisher of Berkshire's GuanxiOnline (http://www.guanxionline.com/), which helps professional people navigate today's China , and is a member of the National Committee on U.S.-China Relations (http://www.ncuscr.org/). Karen is co-editor of Global Perspectives on the United States and launched the community website http://www.loveushateus.com/ in 2006. Karen is an occasional journalist as well as the author of a number of popular books, including The Armchair Environmentalist, that have been translated into French, German, Japanese, Korean, Thai, and traditional and simplified Chinese. She blogs about publishing and social media at http://www.berkshirepublishing.com/blog and about China at http://www.guanxiblogs.com/karenchristensen.

NOTES ON PANEL

KC: Halloween is a good time to hold a panel. It is one of the few times where we gather with many different people we don’t really know to celebrate together. It is an interesting holiday because it is based entirely on trust---we send our kids to request candy from total strangers. A recent study found that 25% of Americans don’t have a person to turn to when they're in trouble. This is where online communities come in; they can fill the gaps for people and provide a sense of community where otherwise they would have none.

KC continues with background on the program:

Today we are going to ask tough questions asked about community building. Community is important to many people, including environmentalists, who are into buying locally sharing resources, etc. I looked at this community and decided that I didn’t want to live near them because they weren’t much fun (laughter). In short, communities are not all rosy; they have both positive and negative aspects. The exciting part of developing big community projects is the ability to build knowledge and business relationships. Today’s program came about because I wanted to learn about new social networking tool to build business and related communities. There are 57 definitions for community, and the ability to collaborate and make a community with different people is important for companies to develop.

KC then discussed the different cultural concepts of community and used the Chinese term that means community, guanxi. In each culture there are different concepts of community, and to be included in a community even for work, there are varying ways to do it.

KC then introduced the speakers and reviewed their experience. She also asked the speakers how they defined the term “community” and what communities they are members of.

DT: A community is two or more people with any relationship stronger than they would have with a stranger. For example, Americans meeting in another country are part of a community of expatriate Americans. They would not necessarily be friendly back home but because they share the same nationality they will associate when abroad. I am a member of many communities: my family, two synagogues, company (Evalueserve), our clients, school classmates (business school, college, high school).

LF: A community is any group of people who share a common interest and develop relationships with a sense of reciprocity. Now with the web, location and place falls away. I belong to many communities and at the moment I am very into Facebook.

KK: One of the main purposes in life is to use collective intelligence as a community to make better decisions. For example, communities have been formed around the future of the Statue of Liberty, and national causes such as what to do with healthcare. Community is fundamentally about having a common purpose. I am a part of communities where I will act, friends, family, church and leadership groups. However, most people aren't part of too many communities.

SP: To get a better understanding of how communities function, I looked at the interactions of financial advisors and what kind of online communities would appeal to them and if they would use them. They don’t like to interact with each other online and prefer to meet face to face. So we made our community more of a transactional place where investors could talk to advisors and fund companies, etc. I also looked at open and closed communities and the implications of each. Reuters has different initiatives going on to create communities among people using their products (e.g., Reuters Space) where they can share ideas for optimization, etc., so that Reuters could better meet the needs of not only their clients but of financial advisors as well. I personally belong to several communities including family and church. People look for communities when they need information and then become part of that community. For example, when we found out my middle daughter had special needs I became part of that community.

KC: Why does community matter today?

DT: I divide community into two categories. (DT then spoke about user generated content and how Nitron acts as a community and connects people).

DT: There is clearly a movement for people to generate content and synthesize it into something other people can use. Also people use user generated content for feedback, e.g., the NYtimes website. They integrated community content on to the site even though it doesn’t fit the editorial norm.

LF: What has been happening with consumers is that people aren’t allowing brands and publishers to have such access into their conversations as they used to have. Highly authoritative content has lost a foothold. People go to friends instead of going to the traditional places for information. New content providers now have the same cachet as traditional content providers. Secondly, consumer generated content is its own animal. We need to learn how to harness consumer sentiment to understand it and how to make, and break businesses as well as what content is important in people’s lives.

KC: So LF, you create communities instead of waiting for them to form naturally? What does it take to build a community?

LF: Invitation only communities are different from ones that people create on their own. This is interesting for publishers. Publishers have many different kinds of communities that they create for their different customers. These go across age of customer base. It is surprising that when you get people into a virtual room how much they want to be part of the future and a brand's direction.

KK: The role of content is changing---- just look at http://ratemyspace.hgtv.com/ (Editor: the internet equivalent is ratemyspace.com, a completely different site.) People can make suggestions etc., about other people’s spaces. Users took trusted content and used it to create a conversation. This enabled a conversation amongst users, which generated hundreds of thousands of users and millions of hits per month. The peers are the audience and are not experts, this makes it relevant to individual people; the learning is within the audience.

SP: I have been in the information business for a while. I have found out that there are risks associated with the rise of user generated content. Wikipedia for example has a lot of information that is now free. Brittanica used to be worth $500m—now much less. What happens when user generated content becomes more valuable than proprietary content? We have to stay ahead of that curve.

KC: Let’s talk about the implications for deciding to build a community. Can communities really be created? Are online and offline communities different?

DT. Yes, they can be created and need to be created using a seed. (DT then gave the example of the stone soup story and how everyone contributed to the soup but that it started with only a stone.) My company, Nitron Circle of Experts, hosts dinners which bring together both clients and Nitron’s experts. The dinner is an artificial community and the seed is the expert.

LF: These are great questions, since 1999, I have felt strongly that there needs to be a high level social glue for people to participate and contribute. Social glue can be many different things. I spoke with a motor oil company and asked how are we going to get people to talk about oil? The fact of the matter is that you can’t, you have to get people into community about something else like NASCAR to get them to talk about motor oil. Not every brand needs to create a community; this might not be most effective way to reach the customer. Thinking about purpose and social media strategy is the right place to start, that will lead you to what kind of communities to go to.

KC: Feel free to ask question (to audience)

KK: Really big things are happening in the world right now and it is important to build communities right now out of a want to create as opposed to something mechanical that it might have been in the past. It is behavioral not a mechanical challenge that we face. It is important in the product development process to listen to consumers. Nine out of ten products fail, what if we can bring this to 8/10 because you listen to partners and consumers.

KC: Those are groups we need to use.

KK: There is a need to recognize the value of these communities in our business. Also not simply open or closed communities but there are hybrids that need to be considered as well. They are open and give feedback to closed community (the company) to create value.

Audience: Do you have an example of a community that has done this?

KC: We may be aspirational, this might not be working as well as we would like.

SP: We don’t want to rely solely on online communities. We also do conferences with financial advisors, so that they get the face to face feel they can interact best in. We need both bricks and clicks to make online communities work

LF: It is public knowledge that Charles Schwab is a client, and they started a new initiative to attract members of Generation X. Schwab wants to build products and relationships for this community. Schwab though up a high interest checking account that would come with free Schwab advisor account so that they could start the relationship early with these people for when they have money.

DT: It seems odd that they had to make an effort to figure out that high interest accounts would attract new business (laughs from audience).

LF: It is hard to get the practicalities into the business.

KC: Where should a company start listening to map opportunities?

SP: Just start talking to people.

KC: Who did it and for how long for you to get your community up?

SP: We hired experts and talked to our constituents.

KC: Do we know where our most important communities are? Where should we trust our gut?

SP: If you trust your gut, and add research you will get success.

KK: Start with your own employees and then turn to partners.

LF: I think it depends on what the high level goals are. If you are interested in driving loyalty then talk to customers first. How they view your value proposition versus how you do is something you need to get a handle on. Then you have to figure out how this impacts loyalty. If you are interested in new customer acquisition then you should talk to the growth market and find out what they need.

DT: I would talk to corporate entities and personal network of your employees. People within companies should enlarge their personal network thus enlarging corporate network.

KC: What is the optimal size of a community?

SP: I have no idea, we work with over a million financial advisors, how many do you really need? Probably thousands?

KC: Will they (the financial advisors) pay for a community?

SP: For the online community that we built there is a basic version and an advanced version. If they want, there is a basic version online but a better one you have to pay for.

KC: Can communities be too small?

SP: Yes, one that doesn't generate enough revenue to sustain it and get ad dollars is too small.

LF: Through trial and error we tried lots of things. We found that 300-400 people is the sweet spot. So that when new members log in to the community there is new content but at the same time there is familiarity. Members tell me when they are going on vacation for example, so there is a real sense of community with smaller networks. We all kind of know the members and they know others, there is intimacy b/c they see a relationship.

KK: Size is directly related to business purpose of the community. Communities based around mass market products will have lots of people. Communities based around a governance issue that affects lots of people will have lots of members. Every community has a life cycle. Some are a week some are much longer or until the business purpose has been achieved. The needs of a community change as well.

KC: How do we keep communities relevant and sustainable? There is initial buzz and then what happens?

KK: Social networks and communities are very different. Communities need to be credible and relevant over a long period of time. Community has to create value for users. There is also a need to create institutional memory for the community, the online Flight 93 community for example. A decision was made to include lots of people from designers and architects to the families of victims to create a new idea for the monument. Every PowerPoint and piece of documentation connected to a decision is stored. New people coming on can see how and why decisions were made. This underscores the need to create memories that are the working pieces of a community.

DT: I disagree with the rest of the panel, community size can be infinite---using my earlier definition of community. Facebook for example, I can send anyone a note and they will read it because they can see my profile and see my credibility. EHarmony is a community of people interested in romantic partnering.

DT then discusses online dating and manageability issues with mailing lists, and mentions Grouply as an initiative in this space. He then asserts that with the right amount of tech you can get around the issue of size.

KC: Should have an “island” in Second Life? Should existing technologies be used (Facebook, etc.) or should they be individual for each company?

Many comments from panelists some yes some no. it is based on the individual need of the company.

KK: It takes knowledge and technology to get it right. This is a unique creature. Technology enables communities but doesn’t build them. One needs to make sure that the technology works at all times. This is the largest segment of the technology industry today. This model is used in CRM world. They use data from customers to make their software better.

Audience Question: Facebook had to fire some staff when they were found to be picking up social contacts from the database. Guidelines from management need to be established. Humanity has always had communities. What is really new about this? What are the real dollar opportunities? Where is the payoff?

DT: (Responds to a previous question about safety questions online. ) There were bad people in the world well before the internet. The telephone had the same problem; people overreact to new technology. When we hyperventilate about alleged inappropriate behavior on MySpace, we're publicizing by anecdote instead of by data, and then we're establishing policy by anecdote instead of by data. According to the study Love Online, the rate of negative events among couples who meet is the same or higher for people who met face to face then people who met online.

LF: The downside or risk of community is that you have people who can say anything, and there is a need to create boundaries. In my past life with public communities I learned that communities can be hijacked, but in communities online this can be monitored.

KC: There are trust issues where personal or financial data can be taken advantage of.

SP: There are ratings systems which are great. Like eBay, can talk about people's credibility. That aspect of community is wonderful.

KK: We have an expectation of interaction. This is a function of an economic equation as opposed to a behavioral equation. The opportunity cost for participation is almost zero now. What changed here is that the technology is disrupting the cost of participation. It is now easier to get involved and for companies to deliver and make sense of it.

Audience Question: What about civil society? To what extent does technology which brings lots of participation imply for the governing structures of our country?

KK: At one point I was President of neighborhood association and it surprised me to see lots of community members with lots of wisdom---who did not participate. However, at community meetings you always heard from the same loud people. The promise of technology is that it will create a more structured environment for participation. If technology is used to include people to draw on collective intelligence then it can be excellent and used for public hearings. There are rules for public comments.

KC: What is the one thing the audience should do to use community in their business?

LF: Take a look at your 2008 business plan and look at it to see if the planning for next year has any planning to do with community. Make sure that you are planning for how this technology will affect this business

DT: The community should look at the communities that already exist. Orkut, for example exists in India . It is heavily used by our employees, whether or not management approves of it.

KK: One should feel a sense of courage to change the conversation and create clear value propositions for communities within your organization and raise expectations.

Audience Question from a publisher: There are many communities to be discovered online. One area not connected how is to connect people with publishers. How can this be done?

DT: Look where people have affiliated themselves with the publication and leverage that.

KC: Final comments from the panel?

LF: Communities can provide a lot of business value. Insight about new response to products that can make 100 millions of dollars, just look at the 100 calorie pack at Kraft, that came from customer insight. These communities can build relationships with segment of population that could never have been reached before. There is real importance around organic word of mouth that created positive brand value.

DT: Nothing sufficiently pithy. (laughter)

KK: (pitched his company’s newsletter).

SP: We are hedging our bets and using lots of models to start an online community.

DT: Just one last comment, it is short sighted to think of this in monetary terms. The NYTimes missed opportunities by charging people for viewing the Times’ archived content. While they made money, the Times lost relevance. Charging for content can be more expensive than it appears.

David Teten — Sun, 21 Oct 2007 14:35:34 GMT

I’m happy to be participating at a Software and Information Industry Association lunch /webcast on October 31 in midtown New York, on "The Promises and Risks of Social Networking in the Information Industry".

The event is on “how your enterprise can profit from social networking: in promotion and marketing, in the development of new products and content creation, and even by making communities one of the services your business offers as an ancillary to content products.”

The other panelists are:

Leslie Forde, VP of Strategic Alliances, Communispace;

Kim Kobza, President and CEO, Neighborhood America;

Scott Parry, General Manager, Reuters Advicepoint

Karen Christensen, CEO, Berkshire Publishing Group will moderate.

Some of the questions that will be addressed include:

• How can we make our communities persistent and sustainable?

• What increases the value of a community to its participants?

• What social media are appropriate for my business?

• Does it really make sense to use existing free social networking communities like Facebook and Second Life?

• Can we develop our own unique social networking systems with open source technologies?

The event costs $50 for non-SIIA members. Alternatively, the event will be available via webcast. Register here.

More on Web 2.0 and Enterprise 2.0 in Capital Markets

David Teten — Wed, 10 Oct 2007 08:37:56 GMT

Christopher Rollyson took some very detailed notes on the recent New York conference on "Web 2.0 and Enterprise 2.0 in Capital Markets." They're worth reviewing.

Web 2.0 / Enterprise 2.0 in the Capital Markets Industry

David Teten — Tue, 25 Sep 2007 05:18:22 GMT

I have attached below some notes from last Monday's Financial Markets World conference on Web 2.0 / Enterprise 2.0 in the Capital Markets Industry , at Bayard's, New York.

My own talk was on "How to Source Deals with Web 2.0 Technologies". It was focused on how private equity funds, venture capital funds, and hedge funds can more efficiently find companies in which they can invest. Slides are here.

Lauren Buckalew from our Shanghai office took notes, below:

------------------------------

A pilot study on awareness and use of Web 2.0 by Canright Communications and Evalueserve found that of the executives surveyed, 44% were “extremely” interested in Web 2.0 for business, but only 17% felt “extremely” or “very” knowledgeable about the technology.

The survey results—which were distributed at the Financial Markets World Web 2.0 / Enterprise 2.0 in the Capital Markets Industry event today—mirrored the speakers’ sentiments: the business community in general imagines grand possibilities for Web 2.0 technologies in the workplace, but the barriers to adoption, such as lack of understanding at the executive level or compliance issues, are still great.

I came to the event excited to be educated. I knew a little about Web 2.0, but I was overwhelmed by the possibilities I saw in the news and just wanted authoritative instruction on how to filter through all of the noise.

The most informative sessions to get the overview were Matt Nelson of TowerGroup’s opening remarks, and the last talk I attended, Dion Hinchcliffe’s ‘Applying Enterprise 2.0 and Web 2.0 in Financial Services: Early Notes from the Field’. In fact, Dion’s absorbing speech would have been better placed early in the day, as it provided a good background, real-life examples of Enterprise 2.0 successes, and a straightforward summary of its shortcomings.

Other speeches and roundtables drilled down on specific topics, like Instant Messaging, Collaboration, Web 3.0, and David Teten’s talk on using Web 2.0 to source deals (I did not hear the last talk by Tom Steinthal of BSG Alliance). Since I was learning about these areas for the first time I was only able to understand on a superficial level, but was most impressed by Penny Herscher of FirstRain and her simple yet sharp insights.

Stephen Leung, a Senior Manager at BEA Systems, who was a panelist on both the ‘Web 2.0/Enterprise 2.0 in the Financial Services Industry’ and ‘Rich Internet Applications and the Client Portal: Using Web 2.0 to Improve the Client Experience’ panels, spoke on the infrastructure and applications side of Web 2.0, and probably received the most questions from the audience.

Although the roundtable topics had various titles, and nearly all of the discussions went overtime out of lively discussion, I didn’t come out of the event in control of Web 2.0 like I thought I would; I just learned how much more there was to it, especially more creative uses of Web 2.0 apps for businesses than I could have imagined.

In following the “Top 10” theme used by Xignite Chariman/CEO/Founder Stephane Dubois to kick-off the first roundtable, here’s my Top 10 Learnings from the event:

10) Web 2.0 technologies should fit into existing workflow and should be invisible to users.

9) The finance world’s secrecy and competitiveness inherently conflicts with Web 2.0’s nature of viral, self-correcting information sharing.

8) Longtail, mashups, fine-grained entitlement, folksonomies, meta data, geo-tagging and MetaWiki are good things… once you understand them.

7) Individuals can use Web 2.0 tools to leverage existing social networks to generate sales or make deals. One can do this outside of any business structures, based on one’s own diversity of contacts, character, competence, the relevance and strength of one’s contacts, and access to information.

6) Executive decision makers’ lack of information on and understanding of Web 2.0—“What’s the ROI?/I don’t have time for this!/Kids these days and their crazy technology…”—prevent companies from realizing adoption. Any new technology would face similar barriers.

5) Web 2.0 is not a technology or a step in development, but a social concept.

4) Legal/compliance teams haven’t yet figured out how to effectively regulate Web 2.0 tools without reducing them to meaninglessness. But giving employees unbridled Web 2.0 tools is also not recommended.

3) Internal company wikis—which act as a unified log for all project developments and conversations—are a successful example of Enterprise 2.0 in the real world. Key to success is to motivate employees to use it and control the structure themselves.

2) Each element of SLATES (Search, Links, Authoring, Tagging, Extension, and Signals) is required for a Web 2.0 tool to be effective.

1) There is no clear solution for how the capital markets industry should integrate Web 2.0 into business. The interest is there, but Web 2.0 is still effectively consumer-driven, not enterprise driven.

More discussion on Enterprise 2.0 is in order, but before then, more actual application of Enterprise 2.0 in the workplace would be more informative.