Weekly Links (Week of Jan.25, 2010)

This week's links are somewhat Internet-centric, but I've also tried to mix in some interesting ones on leadership, sustainability, quant/statistics and Internet marketing/measurement.

Role Models - (Fred Wilson, A VC Blog, Jan.2010) - I had a conversation with my wife (@GracelyGirl) the other day, as we're starting to see interests from our daughters in various topics. My point to her was if they are interested in things we don't have expertise in (science, art, etc.), we should find someone that can give them guidance and insight. Giving people a role model early in life is so important, especially someone in a nearby age-group, as it helps them understand that their passions and goals are obtainable.

Will the Internet F* with Wall Street? - (Chris Dixon Blog, Jan.2010) - I haven't written about this theme in a little while, so here goes. This article does a nice job of highlighting the difference between doing things differently with technology, and technology being the differentiator to truly disrupt an industry. The article highlights a company called Square (@square), created by the founder of Twitter, which is focused on creating a new way for SMBs and individuals to conduct monetary transactions. Square doesn't disrupt the previous financial industry, but it's thinking like this that could open the doors to new interaction models for the economy.

Will Amazon be the New Wal-Mart? - (GigaOm - Jan.2010) - while companies like WalMart and Best buy have been highlighted for their sustainability initiatives, maybe the company to begin focusing on is Amazon. With Amazon's revenues growing faster than their competitors, should they be driving the next stages of consumer/retail sustainability? Do they have any inherent advantage in this space because they are fundamentally virtual, as opposed to the huge physical footprints of Amazon and Best Buy?

How to Measure the Internet? - For anyone that is getting involved in a business that may drive revenue from online advertising, or will gain share because of online visibility, here are some interesting reads to get a deeper understanding about how the Internet is measure by external agencies. It also highlights how the measurement of the Internet has moved from a sampling-based model to a more direct measurement model.

• Comstore announces new measurement policies for website
  
• Problems with Comstore's measurement methodology
• The details behind the recent fight over Comstore's changes in measurement policies

How to Measure ROI - (Fred Wilson, A VC Blog, Jan.2010) - A quick Entrepreneurial refresher course for anyone starting a business and having to negotiate with investors (Angel, VC, etc.)

Re-examining the Value Chain - Apple Table (The Logical Idea - Jan.2010) - A nice look at how the recently announced Apple iPad show not be evaluated on it's technology, but on it's potential ability to change buying habits of readers of eBooks (or other reading-centric content). A strategic analysis of how it may help or hinder the publishing industry. (note: Some of my pre-announcement and post-announcement thoughts on the iPad)

A brief look behind the founding of Twitter

As I've discussed many times before, I'm a huge fan of Twitter and the new forms of communication that it opens to users around the world. I found this brief video showing Twitter creator/founder Jack Dorsey discussing how the company was founded and the ways it has been shaped over the past couple of years. Coinciding with our Entrepreneurship course, it's an interesting look at how to take simple concepts (immediacy, transparency, approachability) and align them with powerful forces to create something great. It also conveys the best idea for any entrepreneur, "start....just get started with something small and see what happens."

I'm looking forward to utilizing many of they valuable ideas in the two start-ups that I'm working on now.

Twitter Usage Recommendations

Over the weekend, our Entrepreneurship professor (Stan Mandel, @stanmandel) let us know that he was beginning to use Twitter to comment about some of his entrepreneurial ideas. Since he's just getting started, I sent him along these tips for better Twitter usage:

1) I've written about Twitter quite a bit over the past year, including some usage suggestions and feedback I've received:
http://bgracely-exft2009-wfumba.blogspot.com/search/label/twitter

2) Personalization
- People rarely take you seriously (ie. follow you) if you don't personalize your profile
- People almost always check out your info/background before following you back
- Add a picture. Something that will be easy to recognize amongst all their other tweets (face picture, company logo, etc.)
- Add a profile description; whatever will fit in 160 characters (ie. Babcock Demon Incubator; WFU Professor of Entrepreneurship; Angell Center for Entrepreneurship, etc.)
- Add an interesting background picture/images for your page

3) Lots of great ideas come from other people's tweets. You can look up keywords at http://search.twitter.com, and if you see anything interesting, consider following those people.

4) When you find interesting people to follow, check out who they follow. As you mentioned yesterday, smart & successful people tend to run in the same crowds.

5) It's often useful to add a "hashtag" to your posts, especially if they are about the same concepts. It's a tag that other people can easily search for. Makes it easier for people to find (ie. #entrepreneurship, or #babcockdemon or #wfumba). Just add it to the end of your posts (if you have enough space).

6) Download a Twitter client for your phone (assuming it supports applications), or use the SMS/Text function. This makes it much easier to post, as you don't have to wait to be back at your PC to communicate an idea or ask a question.

• http://crackberry.com/twitter-roundup (Blackberry Clients)
• http://mashable.com/2009/05/02/twitter-iphone-apps/ (iPhone clients)
  
• http://getsatisfaction.com/twitter/topics/how_do_you_update_twitter_by_sms (updating twitter via SMS/Text)

7) One method of gaining followers (which is very valuable, because they spread your ideas or answer your questions) is to give them background on your ideas. Send out tweets that talk about your goals (ie. find new ideas), your methods (Angell, Babcock Demon), and what you find interesting (URLs)

8) Re-tweet interesting things you find from other people. This is done using a string like this "RT @bgracely ". Many times, you'll find that people you re-tweet will follow you back.

I know that's a lot of stuff, but considering how many people are moving much of their online communication and information finding to Twitter, it's useful to be using some tips/tricks that have been proven to help get you actively involved in the community.

A Lesson in Permission Marketing

As an avid fan of Seth Godin and his mantra of Permission Marketing, I learned a valuable lesson this weekend about the cost of attention in the digital economy.

I've mentioned before that I'm somewhat of an information junkie, constantly looking for ways to connect the dots between different concepts and different types of businesses. In my mind, there is a certain level of satisfaction in finding those disconnected snippets and sewing them together. Mistakenly, I also believed that the connected snippets might be of interest to my classmates as we try and apply our learnings to our working environments.

After a Q&A session in class this weekend, a classmate cut one of their questions short and instead tossed out a, "I'm sure Brian will send out something on that.." comment. He was partially joking, but 100% accurate that I had now violated any previous permission that he may have allowing me (regarding the sharing of information) in the past.

Where I made my mistake was ignoring four critical factors:

• While the sending of bits (ie. email) is essentially free, the cost of interruption for the receiving party is nowhere near free. And unlike Twitter, where people actively choose to receive your information, email does not easily permit the receiver to filter/ignore your noise.
• Managing information is a completely asynchronous process, with each person doing it in their own way. Not everyone deals with information overload in quite the same way, and very rarely do overload or excessive noise result in positive interactions.
• Permission is not a one-time event. It's a constantly re-evaluated model, where the the allowance of permission can be a binary decision based on the last interaction or the last level of value (real or perceived) provided to the user.
• Permission is not a supply-led function, it's completely demand-based. What's useful (or perceived useful) for me in no way implies that it is useful to anyone else. And this holds true on an interaction-by-interaction basis.

Lesson learned. While their cost of transmission may be the same, not all digital communications mediums are created equal. The same goes for communicating new ideas, or influencing others. It's not always a "lowest-cost provider wins" game.

Once again, it's good to make mistakes in the classroom rather than out in the real world.

It's Difficult to Focus on Multiple Things at the Same Time

As the Germans learned in WWII, after bombing Pearl Harbor, it is very difficult to fight a competitive battle on multiple fronts. Valuable resources get spread too thin. The best people aren't all aligned to a common strategy. Communications becomes more difficult.

The recent Google Chrome OS announcement is going to create an interesting battle for a number of reasons:

• Technology innovation (Desktop OS vs. an Internet OS)
• Freemium vs. Premium Pricing Models
• How many battles can either company sustain and still be successful in their core businesses?
• How much is Google willing to put into their non-search businesses in order to keep Microsoft from gaining traction in search?
• How much is Microsoft willing to put into Core OS (Windows) or the Internet version (lower margins) to maintain those cash flows?

And of course the most important question for MBA students - do each of these projects create a positive NPV? (ok, being sarcastic)

It must be fun to sit in the war rooms of either Google or Microsoft and plot how to block or take the other guys market (on a huge scale). Of course we do need to continually ask ourselves, are any of these actions add real value to their customers, or are they potentially opening themselves up to new competition?

Understanding (and misunderstanding) how to use Digital Media

One of the more interesting aspects of the latter stages of an MBA program is that you spend less time focused on the classroom details and more time discussing and applying them to elements of your life. You find yourself looking at even the smallest interaction as an opportunity to analyze and seek improvement. Here's an example from a recent interaction with my roommate from the China trip, Gregg Lewis.

Gregg and his wife work regionally out of Roanoke, VA. He has won national awards for his architectural work, and been recognized internationally for his efforts to push the Cradle to Cradle concept of environmentally sustainable design. Gregg's passion for combining great architecture with eco-friendly sustainability are the foundation for his long term goals to raise awareness of the challenges ahead, and drive the overall building industry to be more responsible.

Over the weekend, I received an email from Gregg saying, "hey - wrote this opinion piece for the Roanoke Times - it'll be published this week." The piece ran on Monday. Overall it was well written and provides some good connectedness between the ideas being fostered by several well known individuals. My comments back to him had little to do with the content and almost everything to do with how he planned to amplify this message.

1. Is the Roanoke Times offering you a regular column to discuss aspects of environmental issues?
2. How else do you plan to get this message out to more people?

We had some follow-up discussions about basic things like Blogging, Twitter and other ways to use low-cost digital media outlets to amplify his message and generate some new conversations with people from around the world with similar interests. For now, those are on hold and we'll see if he's willing to put in some time to cultivate those communities.

This afternoon, I finally got around to looking at the piece on the Roanoke Times website. My first search for "Gregg Lewis" turned up this counter-point piece. Opinions aside, it highlights all the reasons the newspaper industry is going out-of-business and clearly doesn't understand the new world we live in. I'll just highlight a few points:

• This is a digital piece of information. It is a counter-point piece. But yet it has no URL linkage to the original piece. It forces the reader to search for it, with marginal chance for finding it.
• It provides no URL linkage to the associated articles. One again, the reader has no easy way to add breadth to the piece they are consuming.
• It provides no mechanism for the reader to comment on the articles. How does the Roanoke Times plan to gather feedback from their customers on whether or not this content is interesting to them? Wouldn't this be helpful to them to better target advertisers? Might their readers enjoy the ability to be part of the discussion?
• It doesn't allow the readers to communicate back to the author (email address, Twitter account??), essentially making this a one-way conversation in a world where two-way or asynchronous conversations rule the day.
• It hides easy linkage (see "Share it" button at top, instead of icons) to share the piece with other users or services (Twitter, Digg, Facebook, Reddit, etc..). Are they only interested in readers that manually navigate to this page? Do they have no interest in free distribution and possibly national or international readers?

So here we have a global message, one that needs discussions and ideas from many sides to make progress, and the institution publishing the message doesn't seem to understand the fundamentals of facilitating the conversation. They are stuck in a world of local readers, local writers, and paperboys with papers slung over their shoulders in a canvas bag for early morning delivery. They have never been in the conversation business, so it's not surprising that they don't understand even cocktail-party basics.

I hope that my friend's message and future work is able to better take advantage of the digital economy that could allow it to grow and expand. I'm more than willing to help share my experiences.

Crowdsourcing a New Project

I've written about the power of crowdsourcing before, but other than a children's book that I'm trying to get created via Facebook friends, I've never really put this into practice. We do quite a bit of pseudo-crowdsourcing at work for minor ideas and feedback, but nothing that truly goes outside the walls of the existing organization.

One of the projects we have this semester involves some research into an aspect of international business that we could apply back into our existing business, or possibly use for a future business. My project involves potentially two real businesses, neither or which I am directly involved with, but at least one has several elements that would be core to something that I am very interested in starting in the near future.

The challenge of this project is that there are elements where I believe I can bring quite a bit of value and expertise, but other elements where I am really not confident that my instincts are on the right track. My gut tells me that I'm letting some (subconscious) preconceived expectations restrict my ability to see a bigger picture. So instead of making a mistake from lack of exposure, I thought I'd open this up to the Internet and see what comes back. I have no idea what sort of response I'll get back, but maybe 300-500 followers on Twitter, LinkedIn and Facebook can share a few ideas that will point me in directions I had never imagined before. Let's hope so.

The one caveat I have is that I'm under NDA for this project, so I'm going to need to be somewhat vague about certain specifics. I don't think this should be a problem, as most of my questions are broad and could apply to several markets or products. I'm hoping that this doesn't become too restrictive to creative ideas.

All ideas are welcome....

How Media will Impact your International Interactions

Clay Sharky discusses how Cell Phones, Twitter and Facebook can make History

A lot of this we discussed in StratMktg last semester, but some interesting examples of how some of the usages and shifts are happening from "the simple or disadvantaged" as opposed to from the powerful nations. This doesn't discuss the election in Iran, but it's use of social media and the internet might end up making the Obama campaign's usage look like child's play.

Still trying to figure out Audience Targeting

These are some pictures of user maps from this blog, (Top-Bottom) oldest-to-newest over the past 6 months. In terms of density or quantity of visitors, the site has made some progress. It gets anywhere from 5-25 visitors a day. This makes sense to me as I've learned a few tricks about cross-promoting it on Twitter or LinkedIn. But the slight demographic shift from Europe to Asia still has me somewhat confused. Obviously I get a little more traffic because I've been writing so much about our trip to China over the past month, but I'm not sure where all the European visitors came from previously. Other than "WFU MBA" or "bgracely", almost none of my topics or keywords would trend high enough to make the first couple pages on Google.

This is still in experimental mode. It's nice to be able to experiment and learn while doing something you love to do (writing), which is maybe the best lesson I should be learning from this. Find something you love to do, and then figure out if you can earn any money from it. I make nothing from this now, but hopefully I'll be able to translate some of the learnings from this digital identity experiment into something more sustaining over time.

Value creation through the dip

Following up on my post yesterday regarding the phases that hype, technology and value-creation go through, I thought it might be useful to dust off the questions I typically use to determine if a new innovation is a fad or if it has a chance to survive long-term. This seems to align to Fred Wilson's take on adoption of new innovations.

1. Can I explain the benefit of the technology (or vision) in 1-2 sentences, or do I need to ramble through some story?

2. If I can explain it in 1-2 sentences, do semi-technical or non-technical people understand it, or at least ask good questions to clarify?

3. If this technology was open-sourced, as opposed to being controlled by a single company (or a small number of companies), are there enough interesting aspects to get communities of developers to engage with it?

4. If it’s not happening already, what is going to be the “ah ha” moment when people will actually start valuing it enough to pay for it, or at least associating valid business models with it? If this is consumer-oriented, why would they include it in their life?

5. If it went away tomorrow, would anyone really miss it within 3-6 months?

We live in a world of Twitter-time value creation

If you haven't been paying attention, this little thing called Twitter has been generating quite a bit of buzz over the past 6 months. Regardless of if you're a Twitter fanboy, hater or just trying to understand it, it's been incredibly interesting to watch not only the growth of the service, but also the huge range of opinions about whether or not it creates any real value. One day it's a life-changing technology, the next day it's dead!

Twitter has obviously changed the game in terms of how we can now consume information. It's no longer measured in days or hours, but instead it was become instantaneous. But does this create new value? For the average user, it may create more distraction than the value the instant information could bring. But it is starting to bring value to new technologies that are leveraging Twitter APIs to take the feed of information and turn it into something new.

So I have to ask a few simple questions:

• Do we have any sense of what value is anymore?
• Does long-term value exist anymore?
• Is all value going forward going to be measured in Twitter time?
• Is technology moving so fast that we won't recognize that we need additional value, or new value, until the technology is upon us?

On our trip to China, our new friend Joost at Volvo mentioned that if we wanted to come do business there, that we'd better have a business model that expected products & services to be copied in 90 days. Maybe that's the new duration of value creation. It's been about 90 days since Oprah first joined Twitter, the user count soared, and now it's coming back down to earth.

Or maybe there will now be phases of value created, like rounds of venture funding. Maybe Twitter has now been through it's adolescence value-creation phase, and over the next 90 days (or maybe 6 months, or maybe 12 months), it will have to decide if it's able to move into it's 20'something value-creation phase, or it's adult-maturity value-creation phase.

We live in interesting times. Fast moving times. Sometimes it's very difficult to not only keep up with the pace, but determine if the thing in front of you is valuable or not. I don't know the answers to my questions, but I do expect that they will flip the business world on its head over the next couple of years. Are you creating long-term value, or Twitter-time value?

ObamaNation - Lessons from the Front Lines of Social Media

As promised, here is the presentation that Team 5 gave in our Strategic Marketing course on advances in marketing.

As I mentioned before, there was so much that could be covered. We felt like these 5 powerful concepts played a

major role in the success of the Obama campaign. We also believed that those items could be translated to most

businesses, which was the other key goal we had for the project.

After the presentation, as good set of questions and discussions ensued around how to apply this to other

businesses, where we think the next social media trends will emerge (start-ups emerging

from all the layoffs), would this work if it extended beyond 2yrs (most marketing campaigns don't go

that long), and how to create a spreadable message (keep it simple, inclusive and positive).

NOTE: Several people asked this was done to push a specific political agenda. The answer is no. Our team

is made up of Republicans, Democrats and Independents. We chose the Obama campaign because of its

visibility. Since few of our classmates plan to run for political office, our ultimate goal was to help the class

learn concepts that they could apply to their businesses.

ObamaNation - Lessons from the Front Lines of Social Media

View more presentations from bgracely.

Freemium Marketing Strategy (and Business Model)

Our assignment for this week's StratMktg class was to define one of our favorite marketing strategies, which would then be aggregated by Dr.Narus and put into a single "book" for us to take away from class. I selected "Freemium", which is sort of a hybrid between a Business model and a Marketing strategy. Below is a copy of the paper I submitted.

I used Google's various free applications (Search, GMail, Maps, News, Reader) as an example of using "free" to drive other aspects of their business (AdWords). Perfectly valid example that people can easily understand. If I had this project 6-12 months from now, I probably would have used a Twitter example.

Freemium

Contributor: Brian Gracely

Source of Strategy: Chris Anderson, Free: The Future of a Radical Price, (Hyperion; July 2009). ISBN-10: 1401322905

Type of Strategy: Market Growth

Description of Strategy: With the growth of Internet devices and users, the demand for online services continues to rapidly expand. Due to the relatively low cost of entry into the marketplace, online services must growth their customer acquisition counts at tremendous rates to avoid users switching to another service. Initially offering the service free ensures that the user does not have to make an initial value decision before joining. Once a large population of users become active and perceives value, the opportunity to offer premium (paid) services becomes a possibility. In addition to user-paid revenues, additional partnership opportunities are available to online companies that provide a service that allow adjunct services (advertising) to be created around the user community.

When to Use This Strategy: Freemium is a marketing strategy that has been deployed by Internet-based companies since 2004, and is synonymous with the term “Web 2.0”. The primary concepts of Freemium are:

• Extremely low customer acquisition and transaction costs due to web-only assets. These low costs allow the strategy to address both mass markets and niche markets under the same cost structure.

• Basic services are provided free to customers.

• The company allows numerous opportunities for the services to be expanded by the users, allowing viral growth through user-centric marketing.

• The company allows numerous opportunities for the services to be interlinked with partners to create “mashed up” new services that can be co-branded and cross-promoted.

• Revenues can be generated through premium versions of the basic service, through online advertising, or through various types of partnership programs.

In most successful Freemium models, only 2-3% of the users need to engage in revenue services in order to break-even or become profitable.

Example(s): In 2009, Twitter has become the poster child for Freemium. Having grown it’s user count 1900% over the past year to 10M, with a staff of just 35 people, it is now beginning to introduce revenue models targeted at advertisers, business users and local media. A private company, Twitter has gotten buyout offers of $500M from Facebook and $1B from Google.

From 2006-2009, Google was the best example of a Freemium and Reverse-Freemium model. Google initially offered their search without ads (free to users, no revenues), but soon added AdWords to generate tremendous revenues. They then added free services (GMail, Maps, News, Reader) to generate more content that could be monetized through advertising revenues.

Measuring Twitter - Usage, Interactions, etc..

There is an old business concept, quoted by Peter Drucker, that says, "If you can't measure it, you can't manage it". Following up on previous posts about Twitter, I think it might be useful to look at ways to figure out it what it's doing. As before, this isn't a complete list, but might give people a starting point to determine if the results align with your goal for using Twitter (or any social media).

The first thing to consider is what your goals might be for using Twitter.

• Is it to figure out why there is so much buzz around Twitter?
• Is it to gain knowledge more rapidly?
• Is it to spread information about your company, product, service or interest?
• Is it to meet new people that share your interests?
• Is it to integrate some additional tools or services via the Twitter data feed (called an API) that would increase visibility to your business?
• Other goals....

The second thing to consider is if you're going to be a "farmer" or "gatherer". Other people use different terminology, but essentially this asks if you're trying to initiate conversations and trying to connect people ("farmer"), or if you're mostly looking to collect knowledge from others ("gatherer"). Either is fine, as long as it aligns with your goals. In most social media applications, the number of "farmers" typically does not exceed 10% (dominant voices). This may sound low, but if you think about a classroom or a dinner party, those numbers aren't out of line with traditional human interactions.

Let's look at some tools that might help you determine if you're using Twitter in a way to align with your goals.

1. If you're just looking for a starting point, Twitter Grader is a easy place to start. It give you a simple 1-100 score (100 is highest) that analyzes how active you are, how connected you are, and where you fall in the broader Twit-o-sphere.
2. If you're interested in who are the top Tweeters by city, Top Tweeters by City might be a good place to start. This may be really useful if you're trying to organize local events, or want to make local contacts.
3. If you want to get into some more granular details of how you're connected or creating connections and buzz, then tools like Twinfluence or Twitanalyzer can be helpful. Not only do they give you stats, but also suggestions on ways to improve your relevance and influencing ability.
4. If keeping up with all the activities on Twitter seem overwhelming, tools like Twitter Search, TweetDeck and Twirl are very useful to monitor multiple feeds, keywords or trends.

Since all of these tools also allow you to plug-in other people's TwitterID, you can create some baselines that align with your goals. Beyond that, you can create whatever types of correlations that are relevant to your goals (Tweets -> Website hits; Tweets -> Attendance at events; Rate of adding new Followers, etc, etc, etc.)

Hopefully some of this is helpful to find some places to begin measure how impactful your involvement with Twitter is on your business or personal goals.

Would you trust your customers to define your brand?

Traditionally, companies have spent $M of dollars on Brand Management, Positioning and other Strategic Marketing functions. All these activities are geared towards getting customers to understand how they want their products or brand to be seen.

But as we saw during the Twitter discussion this weekend, some brands are becoming more open to allowing their customers or communities to provide feedback. Brands like Skittles are actively using user-generated-content to define what their brand means. Other brands like Coca-Cola have no idea why so many people are attracted to their brand and want to help define it.

It creates an interesting set of questions.

• How comfortable are you in allowing your customers to help define your brand?
• Is this a good way to get feedback from your customers to help alter the product, or are customers too near-sighted to be helpful in strategic planning?
• Should your strategy include a combination of company-defined branding, and the creation of customer-forums to allow them to re-define or augment your brand?
• Is this potentially the beginning of a new way to look at Brand Marketing, Positioning and Strategic Marketing?

How does Twitter make money?

Following up on my previous post about Twitter basics, I thought I'd address another question from class that raised a number of concerns. "How does Twitter make money, and should I trust my information to someone that may not be here in XX months/years?"

Excellent question, and definitely something to be concerned about as you consider new business decisions. I wrote about several ways that Facebook could make money (in addition to advertising) several months ago, because I enjoy using the service and would like to see it continue. Or maybe I'm subconsciously auditioning to be a Product Manager at Facebook...who knows? Either way, it's interesting to look at how these Freemium companies can generate revenue and stay in business.

As of now, Twitter does not have a revenue model. In fact, this has been the center of much speculation amongst the technorati lately. So let's look at the basic ways that Twitter could make money, as well as some additional opportunities for companies to leverage Twitter to drive revenues for themselves.

1. Advertising - This is the simplest to understand. Just like Yahoo! or Google, Twitter could begin to monetize their traffic by placing targeted advertising along side the tweets. And considering the real-time nature of their traffic, this could create new advertising models for companies trying to reach certain demographics.
2. Additional Tweet Space - Tweets are currently confined to 140 characters, a throwback to the days when Tweets were mainly sent via SMS (Text) messaging. But some people and companies struggle to get their message out in this short format. Supporting larger character lengths may be a service that Twitter can monetize.
3. Auctions for "Suggested" listings - This came up recently, as new members often struggle with who to follow.
4. Integrated Services - An example might be something like this: Starbucks sets up a Twitter "watching" service that looks for people complaining about traffic-jams or any other delay. When they see this, they determine where the users are located. Then they send those people a Tweet offering a coupon to the local Starbucks. This is a very basic example, but there are thousands of possibilities for companies that want to come up with creative ways to reach their target audience. Twitter could offer a service for those companies that can't do this themselves (SMB's with limited IT knowledge), or companies that aren't sure of the right way to engage with social communities.
5. Broaden the Scope of the Platform - One of the key elements to any Social Media company or service is a willingness to broaden the usage of the platform. This means that not only could others create monetization opportunities, but you can leverage new opportunities because of the increased breadth. This could mean creating new partnerships to leverage the information in Twitter feeds, or allowing partners to insert themselves into the conversations in new ways.

That's just the tip of the iceberg of ways that Twitter could make money. I'm sure there are dozens more.

There is also the possibility that Twitter will get purchased by one of the major social networks, or by Google.

How to use Twitter - An Introduction

Brian Turner from Team 4 gave an excellent presentation on Twitter during our StratMktg class. Lots of questions about why someone might use Twitter, as well as plenty of questions about things like Security, Privacy, Following, so I thought I'd try and give some basics. This is by no means an exhaustive list, but rather some example and guidance from someone that has been using for business purposes for a while.

Business vs. Personal...or Mixed: This is probably the first decision that someone should make if they decide to start using Twitter (or any social media service). Do I want this to represent personal-me, business-me, or all aspects of me? This is very important, because while you may have great business tweets all week, the tweet about having too many beverages with friends at the Britney Spears concert might destroy any goodwill you created. For others, this diversity adds to the personality you're trying to convey about your company. Either way, it's a decision that should be consciously made up front.

Giving & Receiving: There are two basic concepts in social networking and social media that need to be understood before jumping in. For some people they are initially counter-intuituve, but they are critical if you hope to gain anything from the tools.

1. Social media/networking is about having conversations, two-way or multi-way. It's about connecting with other people that have a similar interest, or who wish to have discussions about a specific topic. It's not about publishing content that is speaking to someone else. That's what newspapers or TV news does.
2. As with personal conversations (face-to-face), you typically don't receive much if you aren't willing to give something to the conversation. Sure, you can sit at a dinner table and listen to great stories or conversation, but unless you say something, nobody is going to remember that you were there. So while it may seem concerning to share ideas, opinions, details with an online community, it's one of the critical hurdles needed to truly participate in this environment. NOTE: In a corporate setting, this doesn't mean you should break all corporate communications rules. In fact, many companies have policies in place to protect themselves online.

A last point to remember regarding Give / Take is that you may not always like what others say about you or your company. How you handle this is extremely important. For many, the initial reaction is to get defensive or fight back. But this may not always be the best course of action. It's important to realize that this is now a public forum, and it can be just as important to allow customers to vent frustrations ("product is poorly designed", "service was too slow") and learn from them, than to try and limit their ability to express an opinion.

Following and Followers: At a basic level, anyone can follow anyone on Twitter. Just like anyone can visit CNN.com or ESPN.com to gather information. What you put on Twitter is an information feed about yourself or your company. How much you share, when you share it, or how you share it should reflect the image you're trying to get across. That might be formal or casual, fun-loving or serious, personal or business. And if you present something interesting, you can expect to have others want to "follow" you. These might be friends, business partners or complete strangers. For those concerned with security or privacy, Twitter does allow granular controls over who follows you, how they are allowed to request a "follow", and if you'd eventually like to "block" them. But I'd suggest that in order to truly get value from #1 (above), the more open you are, the more connections you'll be able to make. And you never know where that next great connection is going to come from. The next great partner, the next great job offer, the next great customer order. But it definitely won't come if you always have your "blockers" up.

Announcing Information: A simple way to get started with Twitter is to use it to announce information about your company (or personal interest). Product announcements, new blog posts, breaking news, or coupons/specials are all great ways to keep customers updated about what's happening that could be valuable to them. While this isn't necessarily a two-way conversation, it is a simple way for customers that love your brand or products to follow your latest activities.

Enhancing Customer Support: I've written about this before. Twitter in no way replaces a friendly voice, but it can augment the overall experience. Especially for those situations where people want immediate updates. Companies like Zappos and Salesforce.com have embraced this community and are embedding it into their operations and products. And as more Gen-Y people join the workforce, they are going to be expecting the availability (and integration) of the tools that they use in their personal life, so getting ahead of this now is very important.

Solicit Feedback from Customers: What would you like to know about your customers, or products or service? Why not ask them? If you generate enough of a following (see #2 above), you'll start to get feedback. It may not all be positive, but that's OK. We learn more from problems than pats-on-the-back.

Create a New Image: Do you wish that people, customers, partners, media thought you were something different than they do today? This is an opportunity to help shape that new image, and get immediate feedback to the changes.

From a personal perspective, I use Twitter as a extension of my efforts to market our products and services, as well as connect with customers. We announce new products, events, and services. We have industry discussions. We listen to what our customers are saying about the company, as well as our competition. While I can't draw a complete correlation, we have found that the traffic to our content sources (website, blogs, online libraries) have been up 50-100% month over month since we began more actively using Twitter as a means of managing information. Obviously results will vary from company to company, but so far we've been happy with the return on a very small investment of resources and time.

Twitter for Sales, Customer Service &/or Market Research?

Following up on the growing usage of Twitter, here's a good example of how customers are going to start using Twitter for things that relate to business and revenue...and not just their social status.

A few questions for companies:

1. If you have any sort of online presence (sales, product information, customer service, etc.), can you afford not to have a presence on Twitter? It costs nothing more than some time of people to monitor the Twitosphere. Most of this could be automated.
2. Wouldn't it be great to be able to monitor the preferences and dislikes of your competitors and customers? In real-time?
3. Wouldn't it be easy to let your customers and potential customers know about projects that you're working on, or recently released products, or a sale or coupons or discounts?

While it's not the exact science that we study in MBA courses, it does provide an excellent, real-time view of the crowdsource opinions and marketplace. I suggest that if you don't have a presence today, that you make it an action item for Monday.

Twitter is Mainstream - Will this change the Freemium Model?

A classmate, Jim Schweitzer, posted this update to his Facebook page today "CNN likes twitter now too:http://www.cnn.com/2009/TECH/02/12/twitter.shorty.awards/index.html i don't know if it's cool anymore."

For those that haven't heard about Twitter, it's an online "micro-blogging" service that let's people and companies communicate in short, 140 character messages.   People use it for fun to send status messages to friends ("at work but want to meet up at bar for drinks at 7pm") and various companies are starting to use it as a way to communicate with customers or about their current projects.

Twitter is a free service, with over 1,000,000 users.  To run this service, Twitter obviously has to provide massive amounts of computing services (servers, bandwidth, software programming).  So how does it stay in business if it collects no revenue?  Welcome to the "freemium" business model, where the primary goal is to create as many users of your online service as possible, and then figure out how to eventually get at least a small percentage of them to pay for an enhanced version of the service. Or maybe nobody ever pays for the service, because it's subsidized by online ads. 

I bring this up for a couple of reasons:

1. People have become such big fans of Twitter that others are running contests to help Twitter come up with a business model.  Most of these models involve Twitter charging users for some aspect of the service.  
2. With the economy being where it is today, people have less to spend, VCs are funding fewer opportunities, and companies that aren't cash-flow-positive aren't going to survive very long.  This means asking for money will be difficult (from customers or VCs), but it's almost mandatory to survive.  Tough spot to be.
3. For one of my StratMktg Analysis projects, I'm going to explore the Freemium business model and how companies can evolve into hybrid-Freemium or full-paid serivces.  I suspect it's going to be interesting psychological research, since most customers prefer to see prices go down than up.  

The project isn't due until April, so I have a little bit of time, but I'm really looking forward to seeing what ideas may come out of this challenge.  It's not the same problem I recently mentioned with Facebook, but they have similar challenges.  I hope to explore both aspects.  I'll post the results when the paper is finished. 

[UPDATE:  Looks like Twitter just got a bunch more VC money, and hired their first BizDev person.]

The Power of Web Analytics

As everyone knows, a good chunk of MBA programs are teaching students how to collect, analyze and make decisions based on data.  "So sayeth the data!!",  "Show me the numbers".  "Follow the money...connect the dots."  And while companies spend millions on sophisticated systems to track their customers, product inventories, brand awareness, etc., one of the beautiful things about the digital economy is how simple it is to track and analyze data.  And all of this data collection and analysis can be done for extremely low costs (or free).

For example, here are some of the things I'm able to track on this website:

1. How many people visit the site?  How many times have they visited before (returning vs. newcomers)?  This gives me a sense of whether I'm creating loyalty or interest in the readers.
2. Which pages are the most popular?  How many times has each page been read?  What type of content is popular.  What types should I try more or less often.
3. How did people find the site (Search Engine, Twitter, LinkedIn, Facebook)?  Where are the best places to advertise the site.  How are associations with specific words, searches, people made.
4. Where are people visiting from?  If I was seeing certain geographic trends, I could alter my content to appeal to different demographics.
5. How long do they stay on the site?  How many pages / articles do they typically read?  This helps me determine how interesting the content is, and how well linkage between pages is working.
6. How are they accessing the site (domain; type of device; specific browser)?  This could eventually be used to make sure that add-on functionality is compatible with the most popular access methods.

There are several other things that can be tracked, trended and analyzed, but the important point is how simple this has become.  I can quickly understand my advertising, customer interests, customer loyalty and many other factors.  

So far this blog experiment has provided me with many valuable learnings, as well as some benefits that I never expected.