MarketingFeeds » ExperienceCurve

I think this simple story of how a customer at PF Changs got an appetizer and desert bought for her after tweeting about her food is a great example of how small things can make a big difference. I love that this example demonstrates the value of connecting employees and customers through social media enabling a more human connection.

Many companies should ask themselves ‘could something like this happen at my company’ and if the answer is no start removing the reasons why.

Thanks to Andy Sernovitz for the video

This is a wonderful diagram from Bud Caddel who writes WhatConsumesMe.com. I’ts a concept I believe in and one that I wished I had really understood a long time ago. Finding something that you really love to do is for some people is itself a lifetimes work. I think sometimes it takes a lot of courage to do what you love because often people don’t have the same vision as you. Jump and the net will catch you is the term I often think of. In many ways I am in that place right now as I’ve found my offices will be shut down in a couple of months and if I want to stay in San Francisco i will have to do something new, and some of my ideas so far, i love, but also scare me

I know now is a time of transition for many people and I hope everyone has the possibility to at least contemplate work that they will love.

Sometimes we stare so long at a door that is closing that we see too late the one that is open – Alexander Graham Bell

I just got this email from the EFF (Electronic Frontier Foundation) which I decided to republish in it’s entirety because it made me so angry. Essentially a thinly veiled corporate mouthpiece and lobby is distributing books and curriculum to schools saying “think first copy later”. This to me is a disturbing indication of how corporations are infiltrating schools, which IMHO should be institutes of learning and broadening the mind as opposed to teaching corporate propaganda. Some corporations are stealing our ability to be creative by trying to OWN everything, and this is not just about music. Consider natural seeds and genes that Monsanto and other corporations are actually patenting. If you can copywrite the program of life itself we are heading for a dystopian future. Please support the EFF as they are one important vanguard in protecting our rights and freedoms in the information age.

Last week, the Copyright Alliance Education Foundation — a nonprofit mouthpiece for the entertainment and software industries — unveiled plans to spread its protectionist ideas to the nation’s schools and libraries through the distribution of a curriculum titled “Think First, Copy Later.” “Think First, Copy Later” and other intimidating educational materials were produced by the MPAA, RIAA, Business Software Alliance, and other content holders to scare students into believing that making copies is wrong.

EFF knows that the creators and innovators of tomorrow don’t need more intimidation. What they need is solid, accurate information that will help them make smart choices about how to use new technologies. That’s why EFF is launching the free, Creative Commons-licensed “Teaching Copyright” curriculum and website to help educators explore copyright issues in their classrooms. These materials encourage students to discover their legal rights and responsibilities — including how to make full and fair use of technology that is revolutionizing learning and the exchange of information.

The debates over copyright and technology — whether they take place in classrooms, pressrooms or courtrooms — should be based on facts, not fear. Help EFF in our ongoing efforts to educate the public — including smart, creative and inquisitive young people — about the purpose and limits of copyright law.

Please donate to EFF today!

The best and most creative ideas are often based upon utter simplicity and beauty. All of us have seen elegant solutions and I know i’ve had experiences in companies where people have asked “why can’t we create a solution like that” pointing at a design led company. I think it’s because often people don’t trust their intuition, and they delve into our head to try and make it better, more accessible, dumbed down. What do we end up with? Something inelegant, homogeneous, serving everyone, and delighting no one.

Here’s another example, an oldie but a goodie: What would the iPod Packaging look like if Microsoft designed it.

Dr Martin Luther King, Jr. said:

“Power properly understood is nothing but the ability to achieve purpose. It is the strength required to bring about social, political, and economic change … And one of the great problems of history is that the concepts of love and power have usually been contrasted as opposites – polar opposites – so that love is identified with the resignation of power, and power with the denial of love. Now we’ve got to get this thing right. What [we need to realise is] that power without love is reckless and abusive, and love without power is sentimental and anaemic … It is precisely this collision of immoral power with powerless morality which constitutes the major crisis of our time.”

It recently struck me that there are two kinds of approaches to transform the behavior of organizations, one approach is to use empathy to understand human needs and motivation, and the other is power, the ability to force or coerce a particular behavior. I look at the empathic approach coming mostly from design disciplines and the more coercive/power based approach coming from strategy and the more militaristic aspects of business (which is of course about projecting power). It appears to me that the empathic approach and power based approach are often at odds in organizations or out of balance. Extreme examples would be an organization run on slavery, it’s all power and negative empathy, similar diagrams would be appropriate for Enron, Oil companies etc. Positive examples of a balance of empathy and power would be patagonia. Anyway, I put a presentation together to explore this concept and would appreciate any feedback or comments on this.

This idea came to me recently while watching a presentation called “The Medium of Design is Behavior” (it was targeting interaction designers but I think it’s pretty accurate to say all design uses the medium of behavior*). It then struck me that you could say the same thing about business “the medium of business is behavior” and be pretty accurate. What I realized as i thought about this though was that although design and business were both trying to influence behavior that they to approach the problem from two different sides, one from empathy and one from power.

Please leave any feedback in the comments, this is very early stage and I’d love to hear other people’s thoughts.

Please check out these sources of inspiration as well, I stand on the shoulders of others:

• Demystifying Interaction Design: The Medium of Design is Behavior
• Cory Doctorow on self determination and the future
• Is your company designed for Humans by Peter Merlholz

Idris Mootee on combining B school and D school thinking (that’s what I do
Interesting post from Shiv Sing – Global Social Media Lead at Razorfish on Technological Determinism

*A couple of people suggested that design was also about attitude and not behavior, but I would suggest that attitude will influence behavior.

Foursquare appears to be a wonderful evolution of Dodgeball, a much loved service that Google bought a couple of years ago but didn’t fund, and eventually shut down at the beginning of March. Dodgeball was a super simple SMS based service that you would send a text message to with the name of the venue you were at, and then dodgeball sent a richer text message to your friends letting them know the name and address of where you were at. Zeitgeist in San Francisco was the most “checked in” place and there was an unofficial Dodgeball closing party there on the night Dodgeball was finally closed. It was at this party that I started hearing rumors of a new service called Foursquare which was supposedly being worked on by the previous founders of dodgeball.

On March 10th the New York Observer wrote an article about this new service and described it as “dodgeball on steroids”, like Dodgeball but with a fun ‘metagame’ associated with it.

You should be rewarded for going out more times than your friends, and hanging out with new people and going to new restaurants and going to new bars–just experiencing things that you wouldn’t normally do.” So, a game that rewards being adventurous and outgoing in, you know, real life?

Yes, it’s like WOW for your social life!

I won’t go into all the details but one feature that I love is that if you ‘check in’ the most at a particular location you are named ‘mayor’ of it, but you can’t rest on your laurels because people are competing to take that away

I’ve been talking about and thinking about game mechanics in social networks for a couple of years now ever since seeing the ShuffleBrain presentation at GDC, and this is the first social network that seems to have explicitly built this into their design making the social network a ‘big game’. Anyone who plays games like Xbox or WOW no how addictive small rewards can be and i’ll be fascinated to see how it plays out in real life.

Having had a preview I can say that I think that Foursquare may well take SXSW by storm just like Twitter did a couple of years ago, and speaking of twitter they have made some very creative use of the API like having the option to send ‘check ins’ via direct message etc. I recomend you look out for this, it will be out tomorrow as an iPhone application, but as was Dodgeball it is SMS that will become the primary interface for most people.

It was about 10 years ago that a very well respected friend of mine suggested I read a book called Understanding Comics by Scott McCloud, his description intrigued me. He called it “One of the best academic books on visual communication and the psychology of visual perception… oh and it’s in the form of a comic”. I’ve read the book several times and it has influenced my thinking in several important areas, namely visual branding, narrative, visual design and interaction design; it is an extraordinary book.

Anyway, because of my love of the book I was excited to see Scott was talking at the TED conference. One of the best bullet points i’ve seen in a while was this:

• Learn from everybody
• Follow No One
• Watch for patterns
• Work like hell

I found this great video from German Ad agency Scholz & Friends via twitter friend Gabriel Rossi. In the video they lay out a very accessible history of advertising with some lovely animation and music. What I do like at the end is the question they ask of their fictitious Brand X “Don’t you have something interesting to say”. It seems that after years of “crafting messages” to appeal to the faceless mass consumer market many brands have lost their ability to do or say anything interesting. Exceptions of course are companies that stand for things more meaningful than just promoting the consumption of their products. See my related post Is Advertising Worth Saving.

Scholz & Friends: “Dramatic shift in marketing reality” from Michael Reissinger on Vimeo.

On a related note I put a presentation together a year or so ago to present to some Industrial Design students on the topic of branding. I took a similar, historical approach calling it “A Brief History of Branding” which i’ve shared on SlideShare.

If you are interested in this kind of stuff you should follow me on Twitter where I share a lot of this sort of thing

I’ve been talking about Social Media for some time and believe it is going to have a huge impact on culture, society and business over the next 5 to 10 years. Anyway, I thought I’d dig up all my favorite posts about the topic and try to expose some of the chronology of what i’ve been learning. In many ways since I started this blog 6 years ago I’m documenting a long learning curve that I’ve gone through since starting my MBA program back then. Kind of interesting as Experience Curve is a term that actually relates to how organizations learn and become more efficient with new technology. Anyway, lots of these are old, written without the benefit of hindsight, but I found them very interesting to explore. If you have old articles on social media please link to them in the comments or write up your own post and send me a track back, i’ll gather other links in updates at the end of the post.

Supernova Conference Co-Creation TitBits
Jun 24, 2006 – From what I can tell this is the first time I mention social media as a descriptor, although I was still enamored with the term “co-creation” which was my particular focus in 2006. I even started a podcast called The Co-Creative Business Show (not supported, has probably been hacked, not responsible for content) and I put out 5 decent episodes but the production overhead was too much. Great experience though and talked to some great people about some seriously interesting topics.

The Audience Is Dead But The Show Must Go On
Jul 7, 2006 – I think this is one of my fav blog titles, bummer no one commented and I linked to some other bloggers

Die Web2.0 Die Die Die Fucking Die or the Social Media Manifesto
Jul 19, 2006 – I think this was a post that lost Scott Karp as a potential internet friend who write’s Publishing.20, sorry Scott, I did have a smiley face which I thought would cover a multitude of sins. Oooh, and I also take a jab at rocketboom, i’m sure they didn’t notice.

Why Social Media Kills The Competition – Yelp.com Case
Aug 1, 2006 – This is hands down one of my favorite case studies that I wrote from participating in a community, yelp is an extraordinary example of a social media business model. If they fail it will not be due to a lack of a powerful business model, it will be a lack of executing and scaling that business model.

3 Rules For Managing Viral Marketing – What Every CMO Needs To Know
Aug 11, 2006 – Another post I really like and I’ve got great feedback on, really looks at how to manage creative projects differently in a social media environment.

Beyond Viral Marketing – Engagement, Narrative, & Passion
Sep 12, 2006 – This is my first post about “big games” or “alternate reality games”, I have a great belief in these being powerful examples of motivated user generated experiences (I still can’t think of a term to sum this up, but the power of these games to inspire participation are extraordinary). Check out Area/Code, a company specializing in big games. It’s also something that Nokia has pioneered with it’s Nokia Games that it’s been doing since 1999

Book: Outside Innovation – How Customers Will Co-Design Your Company’s Future
Sep 28, 2006 – What this book is about is what social media is good for and enables. It enables you to engage customers in your innovation process. Amazingly to me, and a wonderful example of eating your own dog food, 3 years on the blog that Patricia started to talk about this book is still going strong.

What’s The Role Of Social Media In The Next Election?
Sep 29, 2006 – Wow, this is still 2006, another one with no comments, wow, I was relentless.

Putting the Fun In Functional – Game Mechanics and Social Media
Dec 18, 2006 – This is a critical presentation to look at if you need to do any work with social networks. Basically it lays out the game mechanics that are built into social networks that drive behavior, this is the heart of what makes social networks tickle the very reptilian area of the brain and can make them very addictive.

Social Media Is Dead – So Says Steve Rubel
Dec 28, 2006 – Well this one got some comments I actually tagged some people in the post that I wanted to respond to the post, I should do that more.

What is Social Media
Feb 19, 2007 – Well this seems like an ideal post to end this post on, as this is my first blog interaction with Stowe Boyd, who I have actually recently come to know as a friend, and who continues to blog at /message about social computing and at /ground on issues of localism and sustainability.

What is Web 2.0 Feb 20th, 2007

Ning.com – Roll Your Own Social Network – The Rise Of The Social Niche-Work Mar 2, 2007

Exec Summary: Yes, advertising is still a valuable discipline, but what it needs is a higher purpose. Advertising needs to inspire more than mass consumption, it needs to communicate ideas that inspire action, and participation. The good news is the internet is one of the best mediums ever for the propagation of remarkable ideas, and at their best ad agencies create great ideas that inspire above and beyond the act of passive consumption…

Advertising, as an industry is going to get hit very hard in 2009 as it’s caught in a perfect storm. A combination of the economic downturn combined the massive shift in how people, formerly known as consumers, interact with and experience media, is going to put enormous pressure on an industry already in trouble. Look at the industries that support traditional advertising, retail, auto industry, financial services, you see where I’m going with this. WPP is rumored to be cutting ’several thousand’ jobs and Omnicom is letting 3,500 people go.

Now the problem advertising has is very similar to the challenges of the record companies have had over the last few years, not so much that people are stealing their content, but the shift in culture is disrupting their business model. The music business thought it was in the distribution and promotion business, and a large part of it’s business model was built around that. Suddenly distribution and promotion was solved by peer to peer and the music business had to change how it ‘added value’ and it’s slowly figuring that out.

A large part of the advertising industry is IMHO in the awareness building business, and if you think about it the internet is very quickly solving the awareness problem much faster than advertisers can. Right now with my personal network I hear about products I might want even before they are built. Not only that, if it’s a really interesting product I might even get connected with the founders of the company and give them immediate feedback via twitter, facebook, or their blog. Now, as Renny Gleeson of W+K points out one of the problems ad agencies have is the investment they have in current ways of doing things:

“it irked me recently at the DLX Summit to hear interactive media agencies and publishers focused on teasing efficiencies out of their systems - “oh, we need a streamlined IO process”, “oh, we need a streamlined RFP process”, “oh, we need a GRP equivalent”.

Bullpuckey.

That’s navelgazing incrementalism.
…
But it’s hard for media and creative agencies to imagine a landscape that doesn’t look like the one they just spent all this time and money building. Frankly, they aren’t incented to. They’ve invested as heavily in the communication delivery systems and techniques as brands are in the pseudo-science of “brand management” perched precariously atop reams of best guesstimates about media effectiveness.”

So the question is if advertising needs to reinvent it’s business and business model, what is the business it should be in?

I think the answer to that question depends on where you think the future of business is going. IMHO I believe the future of all business will be based on what Lawrence Lessig calls a Hybrid Economy, where a business co-creates value with it’s customers, and the businesses that win in that case will be the ones that not only have a system to capture and share that value, but inspire their customers to create more and more valuable things and ideas. Sounds quite utopian I know, but look at Yelp, Threadless, Etsy, Amazon, Ikea, South West, Dell and TechCrunch; these are organizations that engage their customers in co-creating value, these are the pioneers of this hybrid economy. Now, I don’t just believe that’s the future of business because the internet is allowing it, I believe that people are ready to step up, ready to be led toward something more valuable and more meaningful. As Clay Shirky says there is a cognitive surplus ready to be used, in one weekend Americans watch enough commercials to build a complete wikipedia. So I believe that’s the future of business, so what is the role of advertising in that?

First of all I think advertising has a massive role in the future of business but, as the best agencies do, it needs to get back to the job of inspiring people, inspiring them to be part of something bigger, helping them understand how they can participate in increasingly valuable ways with companies and organizations. This also has nothing to do with the medium, they can use TV, the web, facebook, twitter, whatever, but the important thing is ‘what’ they are doing, as opposed to ‘how’ they are doing it. Now, one important dependency here is the businesses themselves, they have to shift their strategy from just shipping products, to stand for something bigger, something more important, something that customers can believe in. They should look at companies like Patagonia who get 36,000 resumes for every open position, that’s a company that is inspiring action above and beyond the act of consumption.

UPDATE:

Just found this great post from Garick Schmit at Razorfish’s Digital Design Blog that also calls for brands to stand up for more and do more.

Related to this post is a couple of others I put together recently so if you want some background:
The Future of Business and Social Media inspired by Lawrence Lessig interview on Charlie Rose

Advice about Social Media for CEO/CMO and other Senior Executives

My 2009 Prediction on Social Media and Beyond - The Flight from Growth to Value

Advertisement: Golf Ball Packaging Advertising Ideas Logo Golf Balls

One of the things that struck me recently as I was teaching a class in Blogging and Social Media at San Francisco’s Academy of Art University is that whatever technology I was teaching about might not be here next year. I tried to take an approach where I didn’t teach tools so much as much as tried to demonstrate what creative and amazing things people were doing with the tools. I was trying to teach these guys how to be curious, creative, and to think critically. When I saw this video today it just slammed that fact home.

Things are changing at such a rapid pace, and it’s not just technology. Technology and specifically the web has become a ‘culture accelerator’ or a ‘culture globalizer’. Just as Television accelerated change in culture across America, the internet is accelerating change in culture around the world. The developing countries are in many ways like America was in the 50’s. Lots of new technology, new concepts of free time, and disposable income.

I’ve heard people describe developed nations moving to a Post Consumerism society, and I think the hybrid economies talked about by Lawrence Lessig and the cogitative surplus described Clay Shirky are examples of a Post-Consumer thinking (I’ve written further about those concepts here). Now, it is unrealistic to imagine that developed nations have fully become post-consumerist society but it is happening. But my question is, how quickly will the developing nations move beyond the new consumer culture that is being foisted upon them and adopt a more meaningful model of creativity and consumption? I hope the culture accelerator does that otherwise our planet is in even more trouble than it already is.

Executive summary: I think people should pay a subscription fee based upon how many people they follow.

I’ve been thinking about an appropriate business model for twitter for a while now, it seems like a fun intellectual business problem to wrestle with. Almost all of my ideas had something to do with the amount of followers a person had, something that blended subscription, pro features and or advertising.

I realized last night that it might be better to have a model that charged people based upon the amount of people that they follow. I think a wonderful side effect of this would be to provide an economic incentive to only really follow people who you are interested in, as opposed to playing the twitter game of ‘you follow me and i’ll follow you back’ game.

Here’s the idea, keep twitter free and clear for some number of people that you follow, say 500 or a 1,000, but after the first thousand charge some sort of subscription fee.

The benefits of this are first you don’t penalize people who are very popular, and who actually attract people to use the service. Even better you discourage MLM spammers who seems to be invading this service and gaming the ‘you follow me and i’ll follow you back’ game.

What do you think? I get a huge amount of value out of twitter and am totally ready to pay, what do you think? How much would you pay per 1,000 people you follow on twitter?

So what does Bernie Madoff’s Ponzie Scheme, the financial services industry, the housing market, and Facebook have in common? They all look(ed) very attractive as they were/are growing, in other words rapid growth can obscure real value, as long as there is continued growth.

My prediction, is more an imperative and that is “The Flight from Growth to Value” and this is not just in social media, but also in business in general. 2008 demonstrated quite starkly that growth often obscures lack of ‘value’. This was demonstrated by the housing bubble, then the dramatic collapse of the financial services industry, then by the Bernie Madoff ‘ponzie’ scheme. All 3 of those dramatic collapses demonstrate how growth can obscure real value as long as there is continued growth. One of Wall Street’s greatest failures is it’s singular focus on measuring and rewarding growth, Wall Street IMHO is part of a systemic, management, and cultural problem that focuses our measures of business success on the wrong things. In fact the term ‘bubble’ is a fantastic term for describing this blind belief that somehow growth is the key, because as long as the bubble is growing all the participants feel like they are part of something valuable, this is of course the essence of a ponzie scheme and most multi level marketing businesses.

What has this got to do with Social Media? well I think there are several social media companies who are valued primarily due to their amazing growth, and it’s obscuring what the real value is that they create. The problem in social media is that it amplifies network effects so brilliantly that growth drives more growth, now this is great if you have a business model that creates and captures tremendous value, but if it doesn’t your burn rate goes up and revenue is always just round the corner… until you stop growing and then it collapses. In the end this is the definition of a bubble, everyone wants to join in as long as it’s growing.

It is when bubbles burst that winners emerge and they are generally not the ones you expect, the phrase from the first .com bubble was ‘Even chickens can fly in hurricanes’, and that’s the case with a lot of social media companies now. I think facebook is at great risk of collapsing if it doesn’t figure out what the real value is that it creates and figures out a way to capture it. Once myspace figured out it’s real value was in connecting bands, growth became less important than doing that better.

Two great examples of social media companies with business models that create value are Threadless.com and Yelp.com. Threadless was started in 2000 for $500 and by 2006 were doing 6 million in revenue with 11 employees (6 of them part time), this year they are on target to do 40 million+ in revenue.

Here’s my presentation that I gave at Inverge last year, it’s called “employing your customers for fun and profit” and it illustrates a lot of the ideas I think are important in social media business models, ie. it is the users/customers that create value, you just have to figure out how the help your users/customers do it better.

Lot’s of other people have put together some interesting predictions for what 2009 might hold for the Social Media space and Peter Kim has assembled a good many of them on his blog here. He has posted them to Slinkset where people can vote on them and you can even submit your own. Trendspotting also put together this excellent presentation that nicely illustrates some of these predictions. Some very interesting people contributed to this like Charlene Li, David Armano, Ann Handley, Rohit Bhargava, Read/Write Web, Ben McConnell, Jeremiah Owyang.

Now, some of the people on the internet that I believe are some of the most important thought leaders did not put any predictions about 2009 so I will urge you to go and listen to and read a couple of recent interviews with them. All of these interviews happened in December and if you dig into them and triangulate the ideas I think you have a pretty interesting framework to think about what’s going to happen online in the next 5 years, and to analyze existing businesses in the social media space.

1. Tim O’Reilly talks in depth about Social Media and value on NPR’s Science Friday
2. Clay Shirky’s recent interview on the Columbia Journalism Review
3. Lawrence Lessig on NPR’s fresh air talking about his new book : Remix: Making Art and Commerce Thrive in the Hybrid Economy

Tim O’Reilly is very active on twitter @timoreilly and I suggest following him, and even though not very active you should follow Lawrence @lessig and Clay @cshirky as well…. and you can follow my fractured though process there as well at twitter.com/karllong

Update:
I posted this to twitter and got some interesting questions, one in particular got me thinking from @warrenss

@warrenss @karllong Nice work and a great deck! It will be interesting to see what winners emerge.

And my response:
@warrenss two winners (i’ve expanded on the tweets considerably)
1. platform providers that enable people & companies to connect with, and enable niches to create value ie. twitter, ning*, etsy, google, yelp.com, myspace, Youtube, Wordpress, crowdfactory, Etsy, SocialText, 37signals, Digg, TechMeme, Wikipedia, Stubleupon, Craigslist, 4chan.org Flickr, Dare I say Match, OkCupid, linkedin, Xbox Live, Mrtweet maybe Facebook, Nokia, OpenSocial.

2. companies and people that connect with either niches or lots of niches using some subset of the above tools ie. Dell, Apple, Nikon, Nokia, Patagonia, threadless, BoingBoing, etsy, Netflix, and personal brands like Barack Obama, Arianna Huffington, Shaquille O’Neil Ffffound, Gary Veynerchuck, Chris Brogan, Scobleizer, Kevin Rose, Michael Arrington, Hugh McCloud, Jeremiah Owyang, Mashable, Charlene Li, Zefrank, 4chan, Read/Write Web, (you may not know all of those personalities/pseudonyms and nor should you, but they are examples of people who are using social media tools to build incredible influence in their particular niches/communities).

*Ning’s ridiculous business move in shutting down it’s ‘adult’ communities due to concerns about advertisers, they have obviously not seen how much of a market there is for advertising in the ‘adult’ market.

UPDATE: Just read The Smart Growth Manifesto by Umair Haque on the HBR blogs and he articulates a brilliant concept of “smart growth” which focuses much more on the means of “value creation” that comes from growth. It’s a must read!

Recently Kmart hired some popular bloggers and twitter personalities to promote a competition they were running. Essentially the bloggers were all paid $500 to promote a $500 gift certificate to Kmart. Lots of questions about whether this ethical or breaking some kind of sacred blogger covenant to not sell out. In particular posts from Chris Brogan and Jeremiah Owyang on this topic are not only interesting, but have generated an enormous response in the comments. Technosaler has a different take on this and even takes Jeremiah to task for editorializing as an analyst.

This controversy is absolutely baffling to me and IMHO people are asking the wrong questions especially if they have any interest in business on the web.

First of all the competition was a brilliant and simple idea. How to make an idea spread on twitter with a very minor incentive, the ‘chance to win’ something. In this case the motivation to have a chance to win a Kmart gift certificate drove people to rebroadcast that message to their networks. So brilliant the idea, I copied it the same day and posted this to twitter:

“@karllong is giving away 10 x $25 gift certificates for [threadless.com] - just RT this to enter, will tweet the winners ”

Now I only had 1,800 followers at the time and the result was nothing short of extraordinary. That message got retweeted or rebroadcast over 500 times, that means well over 25% the size of my network took an action to rebroadcast my message to their networks. The very first person to RT was @Coryobrien and he had 1200 people following him so I almost doubled my ‘impressions’ on the first hop. I also added 250 people to my twitter network.

Why did this work so well? Probably because I write the number 1 t-shirt blog on the internet (according to google) so my personal brand is totally enmeshed with t-shirts, so it’s totally appropriate for me to promote T-shirts.

To be quite honest I think personal networks are the future of advertising, so forget the ‘controversy’ and focus on the revolution people.

Izea is actually on the right track with their business model which is essentially to empower people to profit from their ‘influence’ or networks. We are the media, and if we are put in charge of what we promote, on what terms, and for companies we believe in, there are few bloggers who will not participate. If patagonia sponsored me I would happily pimp their products for cash, I love what the company does. They have 30 open positions a year (non retail) and they get 30,000 resumes for those positions, people are inspired by what the company does and stand for. I would totally sell my influence to promote companies that I firmly believe in. Sell out, but do it selectively and on your terms.

if you think this idea has merit go and VOTE at Change.org. The top 10 ideas are going to be presented to the Obama Administration on Inauguration Day and will be supported by a national lobbying campaign run by Change.org, MySpace, more than a dozen leading nonprofits after the Inauguration. So each idea has a real chance at becoming policy.

Oil at its 22 month low and America is heading to $1.25 a gallon gasoline, yet as recently as May, Chrysler was offering to let consumers “lock in” $2.99 gasoline for 3 years. Such is the foresight of our car companies, and an interesting indicator of what consumers were not only willing to pay for, but was actually an incentive. There is also indication that more Americans have continued to adopt public transportation at a record rate. Oil imports rose by a record amount during October assuring continued pressure driving gas prices further down.

I informally polled a group that we should tax gasoline to stabilize gas prices and generate revenue, and got some surprisingly positive responses, enough where I thought it was worth thinking about some more. I actually proposed it to be a flexible tax that essentially kept gas prices at a stable level that consumers were ok with.

I think the key to taxing gasoline use the proceeds to fund research into alternative technology/fuels and manufacturing technology that the American car industry (and maybe others if they pay) can share and use to build new American cars. We should use the money to fund the enormous effort it will take to retool and modernize the entire American car industry. Our car companies could win again but overhauling, rethinking, and rebuilding the American industry is going to be a Herculean effort.

Not only would taxing gasoline drive revenue to fund this effort but it would also serve to help us as a nation conserve. Surely conserving such valuable and strategic non-renewable resource is a patriotic act, especially if it went to fund growing a technological and innovation base right here.

I believe we need a management change and we need to hire visionary leaders, change agents, that can help lead an industry. We need the equivalent of Tom Peters or Steve Jobs to help change the industry. We need someone to help us create insanely great cars.

The car industry is so critical to the future industrial competitiveness of our country we need to involve leading thinkers and innovators. Michael Porter, Gary Hamel, Mark Cuban, and C.K. Prahalad could advise and facilitate the development of long term strategy for the industry ecosystem. Hire Guy Kawasaki as the evangelist. Involve Steve Jobs and Johnathan Ives in rethinking design. Involve Clay Shirky, Tim O’Reilly, and Lawrence Lessig work on how technology, open source, and creative commons can be applied in an industry. Put the guys from top gear as head of product testing You get the picture hire superstar business people and innovators to turn this around not bureaucrats, sycophants and lobbyists.

As a tax payer I would invest in car companies to tide them over until you institute a gas tax if I had confidence they were going to hire leaders and not managers to turn these companies around.

I’ve added this idea to Change.org so please go there and comment, criticize, and vote. We don’t deserve failed leadership in such a critical industry as transportation, it is part of our competitive advantage as a nation. It’s very patriotic to conserve Oil.

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I was inspired to write this after seeing the amazing case study from the team that worked on the Obama identity, which could well become one of the most iconic identities in our time. What struck me was the approach was less like the classic ‘brand as a monolith’ strategy, and much more ‘brand as a canvas’. Deliberate or not, the brand gained it’s own life in social media as people took it and mashed it up.

In a prior life I worked on several brand identity projects, and I learned a lot about the value of creating a true identity, as opposed to a Logo. I also learned a lot about the ideas behind branding, where it came from, and how it eveolved into the discipline it has, I was even inspired to put this presentation together called A Brief History of Branding (download the pdf ) to try and put into context where branding as a discipline came from (hint industrial revolution, broadcast media, mass production and mass markets. Needless to say with the changes that the internet and social media has wrought branding as a discipline might need to re-evaluate it’s methods and gospel.

Here’s the teams blog post

I just got back from reading another brilliant post from Seth Godin, he always writes such great stuff, but i’ve never seen such a stark lesson in all my life of what NOT TO DO

Here’s a quote from his article titled Lesson learned from my biggest business mistake

My biggest mistake (at least in terms of income avoided) was not believing in the world wide web in 1994.

It’s not like I didn’t know about it. I had written a book called “Best of the Net”. I’d even written the cover story for some now-defunct magazine on how to surf the internet. But in those days, the Net referred to Archie and Veronica and the online services… there was no real browser, no search engines to speak of, just a bunch of conferences and some guys in the Valley.

Not only did I ignore it, I actively ignored it. I didn’t register hundreds of domain names or build out the website for Yoyodyne beyond much of a placeholder. Instead of expanding my online game show/promotions company into the web, we focused on Microsoft’s Chicago service and Apple’s eWorld. Sigh.

Instead of building a search engine, I wrote a book called The Smiley Dictionary. Earnings to date: $10,000 or so.

I’m going into all this painful detail to let you know what an idiot I was. How many clues were just sitting there, how much access I had, how deliberate I was in ignoring them.

Great point right? Well here’s the lesson, Seth is also ignoring Twitter, my advice is, get on whatever Seth is ignoring

Now Seth’s got a great business, is a sought after speaker, and sells a shit tonne of books so who am I to give him advice.

For me twitter is the ability to connect with some of the leading thinkers and business people who are changing the web. If you want to learn something start following:

[twitter.com]
[twitter.com]
[twitter.com]
[twitter.com]
[twitter.com]
[twitter.com]
[twitter.com]
(is not exhaustive, but that’s a good primer)

for other inspiration follow:
[twitter.com]
[twitter.com]
[twitter.com]

oh and try and follow Seth, maybe he’ll get the hint
[twitter.com]

it’s an interesting experiment right now, but there is tremendously powerful business models that can be built on Twitter, check out this great post from O’Reilly Radar

UPDATE: I had originally written this specifically about MLM spammers, but in the end it’s spam that puts twitter at risk. Twitter is a small company 20+ people with some great funding but no real revenue model yet. As we see spammers and hackers have an incentive to use twitter for very destructive exploits and if they have even a minor ROI they will continue to try to exploit this. Twitter on the other hand is going have to invest money in fighting these exploits when IMHO money could be better spent on creating a sustainable business model. I had proposed in a later post that some kind of business model where people were charged based on the number of people who you follow, but another option could also be to charge people to send DM’s. Even a charge of $10 per year to send some number of DM’s would kill spam dead, it only works if there is no incremental cost for sending messages.

more animals

This post is the culmination of a long experiment with twitter and I have bad news for twitter, MLMs (multi level marketers) will kill it and so will anyone else with a business model that can extract value from exponentially growing network… so any blogger.

So I’ve built up quite a following on twitter, mainly due to my popular T-Shirt blog Tcritic.com and as of two days ago I had 1,800 followers on twitter. Now that’s a pretty respectable number but of course pales into comparison with people like Scoble who has 45,000 followers, and Garyvee with 25,000 followers, or Kevin Rose, founder of Digg with 77,000 followers. And forget about it when Twitter gets mainstream which it will as soon as kids realize Brittney is on there with 10,000 followers and sports fans realize Shaq is there with 18,000 followers . Anyway, the point is i’ve got a pretty small network compared to these guys.

So a couple of days ago I saw a tweet about a competition to win a gift certificate for KMART, all you needed to do to enter the contest is RT (retweet or rebroadcast) that message to your network of followers. Simple idea, so I tried it using $25 Threadless gift certificates (I get $3 to spend at threadless every time I send them business and I don’t need more T-shirts) and posted this (note that I included my name in the message so people would rebroadcast that:

@karllong is giving away 10 x $25 gift certificates for [threadless.com] - just RT this to enter, will tweet the winners

I then had another window open at search.twitter.com searching on my name and watched as people rebroadcast the message, again and again and again. In the end the message was rebroadcast by 500+ people to their networks. The first person to RT this message was CoryObrien who has 1,200 followers so I almost doubled my reach with the first step. From an impressions or click through standpoint I have no idea the actual conversion rate, I had included a link to threadless.com in my original tweet and chose to leave the url long so people could see what the link was.

Luckily I do usually shorten my url’s that I post to twitter using cli.gs because I get ongoing metrics on my links I share and my click through rate is well over 2% for just general FYI links I put out there.

Another interesting aspect of this is that through what was essentially spamming my network with an “offer” I added about 250 new followers, so I increased my network and influence by well over 10%. Those are some pretty good numbers, so I got 250 new followers for $250, and they are also people who like TSHIRTS so will be open to more offers in the future (don’t be scared i’ve grown my network with integrity and substance so i’m not planning on strip-mining my network, I want to create more value

So on to the MLM, well apparently my recent 10% growth in network attracted a deluge of new followers who were not human beings but actually spam bots all promoting a video of Mike Dillard who was going to sell me some “marketing secrets”. And guess what, that spammer is also on twitter and he’s got twice as many followers as me, even his spam bots are getting connected and following each other and gaining perceived influence. Seriously, he doesn’t have any marketing secrets except how to make money from an exponentially growing network. Twitter defeats regular spam accounts with ease, but it’s going to have a much harder time defeating ‘profitable networks’ of people that move in. I imagine with the economy the way it is MLM is looking like a viable option for a lot of Americans.

The problem with spam is that it only needs an incredibly low conversion rate, and some UC Berkley students found out when they hacked the storm botnet it does have a conversion rate.

So what should the Twitter business model be? well IMHO it should be a mechanism to help people value their network, give them a personal rate card essentially so companies can see how valuable and connected some of these people are and let them work with companies they love and believe in. Surely Patagonia should be sponsoring Richard Branson on his latest voyage where he’s live twittering from his boat (who BTW rewarded his 2,000th follower to spend the day with him). Anyway, you get the picture, you could add pro-accounts, real metrics on conversion rates, reach and influence, and who you influence.

BTW not for nothing, but John Battelle with 4,500 followers (author of the book Search) the other day tweeted this:

I can say this: Google is very, very focused on indexing Twitter. VERY FOCUSED. [snurl.com] [www_google_com] 5:40 PM Dec 4th from web
johnbattelle

and I can concur if you do a search for karllong">[threadless.com+-+just+RT+this+to+enter,+will+tweet+the+winners&hl=en&safe=off&client=firefox-a&rls=org.mozilla:en-US:official&hs=Ai9&filter=0">karllong] is giving away 10 x $25 gift certificates for [threadless.com] - just RT this to enter, will tweet the winners

That was only two days ago!

In this fascinating interview on Charlie Rose, Lawrence Lessig provides some interesting comments about “hybrid economies” where companies co-create value with their customers. As he says some companies, mostly new and small, are already adopting this hybrid economic model, but bigger companies in the future will be transformed by this.

Most companies look at what consumers create, co-create, and share with the world as some kind of free resource to be exploited in what ever way they can, but the winners in the future will be the companies that can create ecosystems in which all the participants are valued, rewarded, promoted, and empowered. Companies are going to increasingly have to treat their customers as contributers and stakeholders in their business, and the concept of where a company begins and ends will blur.

Social Media is the engine behind this massive and slow moving change and for most companies change is not something that can be avoided. Anyone who thinks that social media is about influence, popularity, or an audience is sorely mistaken and business models built on that will be shaky at best. Social media provides the tools to empower and lead a legion of people who believe in your vision, be they customers, employees, partners or competitors, the opportunity right now for all companies is to be a change agent for your industry, are you up for the challenge.

BTW this was the topic of a recent talk/presentation I gave at Inverge and the Social Media Marketing summit, it was titled “Employing Your Customers For Fun and Profit”, I hope to have video of that soon. I’ve had some companies express an interest in having me come in and do the presentation for them and I’m happy to share it, time permitting.

Anyway, don’t just take mine and Lawrence Lessig’s word for it, check out these books if you are interested in this transformation of business.

The Future of Competition: Co-Creating Unique Value with Customers by Prahalad & Ramaswamy

“web-empowered consumers will usher in “a new industrial system” characterized by “co-creating value through personalized experiences unique to the individual consumer.” Under the new regime, headstrong consumers will “seek to exercise their influence in every part of the business system,” and companies will accommodate them by, for example, allowing them to design their own individualized cosmetics and houseboats (an innovation whose benefits include “emotional bonding with… the company” and “a greater degree of self-esteem”).”

Remix: Making Art and Commerce Thrive in the Hybrid Economy by Lawrence Lessig and it’s associated blog page here

Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky

Also watch this video of Clay at the web 2.0 expo where he puts into describes the massive cognitive surplus that enables huge projects like Wikipedia to be created, and how much of it is available

Related: Kaplak Blog has an excellent write up of the Rose/Lessig interview as well, worth reading.

Also follow Lawrence on twitter.com/lessig Clay Shirky at twitter.com/cshirky and me if you like at twitter.com/karllong.

There are a lot of interesting things happening on twitter, and amazing connections being made. I’m connecting with CEO’s, entrepreneurs, authors, producers and adventurers, when I started following Richard Branson he only had 400 followers and he followed me right back. The opportunity, as I see it, is to connect with people who inspire me, and to try and provide some kind of value back to the people that follow me. Anyway, I’ve been thinking for a while that some of my tweets (maybe of others as well) are worth capturing on my blog, nuggets that I would like to discuss further, seeds of ideas if you like. I was thinking I’ll just pick my fav 10 or so in a week and post them as a tweet digest. I’ve avoided the auto posting of tweets as most of them, to be quite honest are probably totally irrelevant.

The genius of google, it connected people with ads when they were searching, the genius of twitter is it connects people when they are ready

(BTW that is exactly 140 charicters with no extra spaces or punctuation)

#Advertising - TVB predicts National TV Spot ad spend declining by 11.5% to 15.5% in 2009 [cli.gs]

“RT: @don_draper [out of character]: Wanted to tell you all first - I’m officially done tweeting as Don will be handing the account to AMC.”

(RT is twitter short hand for ‘retweeting’ or quoting someone else’s post or tweet)

“The story behind the Mad Men twitter experiment [cli.gs] thanks @don_draper “

“if you watch poker or bbc america on TV in the US you will have access to some of the worst advertising ever experienced by a human being”

” @stoweboyd LOL just read the headline “Karl Long Batters The Economist” [cli.gs] “

“Ha ‘Despite a lack of expertise, more than 67% report they will increase their social media advertising budget in 2009′ [cli.gs] “

In the recent Marketing Vox report Marketers Still Face Steep Web 2.0 Learning Curve several quotes jumped out at me, indicating that companies are still very unclear about the value of social media. Quotes like:

“Despite a lack of expertise, more than 67% report they will increase their Social Media advertising budget in 09″

“More than 87% of respondents are not regularly measuring the ROI of their social media marketing efforts.”

“While many marketers are worried they’re missing the boat, in reality even the Fortune 500 companies don’t feel they’ve mastered social media just yet.”

All these quotes indicate to me that top management are generally not engaged with Social Media related activities and their people are out there trying to figure it out, with mixed results. I think one of the major problems is that Social Media is almost entirely grass roots and some of the most interesting and powerful stuff is hiding just bellow the surface. I believe that Social Media will have very limited impact in most companies until top leadership starts making it a priority. The biggest failure IMHO is the failure of social media consultants to quantify the value for leaders in fortune 500 companies above and beyond participation. If your talking to a CEO/CMO and your advice is “blog” “twitter” and “join the conversation” I think their eyes will roll back in their head, most of them are not interested in conversation, they are interested in leading a team of people to create value. Until you can connect social media directly to value creation you will not hold an executives interest.

Now on the other hand, if you tell a CEO that through social media he could inspire thousands or tens of thousands of people both inside and outside his company to add significant value to his company, you may have the beginnings of an argument for them to personally participatein blogs, twitter etc.

If you are a fortune 500 senior executive there are potentially thousands of people waiting to be led by you, you define what value you want to create, and you lead that massive virtual team to create that value. Now is the time, because in 5 years time you will be wondering how you got left behind.

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We always knew that someone had to be clicking on penis enlargement emails and not only that, someone had to actually be buying that crap. It’s kind like late at night when you’re watching horrible infomercials that you think to yourself who the hell is buying this crap, well enough people to make it economically viable to make those repugnant commercials.

Well some CS students at Berkley have released the first empirical study of spam conversion rates called Spamalytics: An Empirical Analysis of Spam Marketing Conversion and the best part is they did it through hacking the Storm botnet itself and studied the results from 469 Million spam messages.

By infiltrating its command and control infrastructure parasitically, we convinced it to modify a subset of the spam it already sends, thereby directing any interested recipients to servers under our control, rather than those belonging to the spammer.

we have documented three spam campaigns comprising over 469 million e-mails. We identified how much of this spam is successfully delivered, how much is filtered by popular anti-spam solutions, and, most importantly, how many users “click-through” to the site being advertised (response rate) and how many of those progress to a “sale” or “infection”sion rate).

Genius, download the PDF here

Thanks Sweis on friendfeed

The Economist published an article called “Blogging: Oh, grow up” and they get it so wrong I’m almost lost for words. They focus on Jason Calacanis’s famous retirement from blogging (oh but 38K people follow him on twitter, some retirement) as some indication that blogging has lost it’s revolutionary zeal. Nothing could be further from the truth, the power of blogging is the ability to DOMINATE a global niche, just ask Gary Vaynerchuk who built a media empire around wine over the course of 17 MONTHS.

Here’s a quote from the article which you can read in full here:

Gone, in other words, is any sense that blogging as a technology is revolutionary, subversive or otherwise exalted, and this upsets some of its pioneers. Confirmed, however, is the idea that blogging is useful and versatile. In essence, it is a straightforward content-management system that posts updates in reverse-chronological order and allows comments and other social interactions. Viewed as such, blogging may “die” in much the same way that personal-digital assistants (PDAs) have died. A decade ago, PDAs were the preserve of digerati who liked using electronic address books and calendars. Now they are gone, but they are also ubiquitous, as features of almost every mobile phone.

And here’s the response I left on the Economist web site:

I’m afraid the problem with this article is it assumes the ‘blogsphere’ to be some kind of monolithic cloud and somehow that is being dominated by the mainstream media. What has happened is that mainstream topics like news, politics, and gossip are being dominated by blogs that act and look like mainstream media. But that as they say is the tip of the iceberg. The blogsphere is actually comprised of hundreds of thousands of topical blogospheres that are like communities of interests for their own particular topics. Lots of these are career type blogs, if you want to know about marketing, there is probably someone blogging about it.

I started blogging in 2003 and that has turned into a career blog which has become more important than my resume. It’s got me speaking engagements, was instrumental in me getting my current job and will likely be critical in getting my next job (if I decide to work for someone else).

I also, in my spare time, write the number 1 T-shirt blog on the internet at [tcritic.com] and have been writing it for two years. There are over 150 T-shirt blogs, and numerous T-shirt search engines. I get about 65,000 unique visitors a month, and monetize it through advertising and starting up my own line of T-shirts. This is never going to be visible at a mainstream media level, but there are thousands of blogs like this that are building small empires around niche topics.

Saying that the subversive and revolutionary aspects of blogging have somehow disappeared now the mainstream media is dominating the top stories is erroneous. The power of blogs and social media in general is the ability to dominate a niche and connect with people who can help you create value. Just ask Gary Vaynerchuk of Wine Library TV.

UPDATE: a couple of people have pointed out the similarity between the Economist article and Paul Boutin’s article in Wired magazine, which I agree there are similarities. Both Nick Carr and Jeffery Zeldman wrote responses to that piece. I guess i’m just used to that sort of hyperbole coming out of Wired, but not the Economist. I think I care more about The Economist.

Here’s a quote that I particularly like from Zeldman:

Paul, when do we stop talking about web content exclusively in terms of narrow platforms and shallow, self-interested goals? When do we stop saying x makes y irrelevant? When do we stop reducing the web to a vulgar and trivial competition between head boys, and start appreciating it as a maturing medium for real thought and expression?

Also Kevin Marks has written an article about this and brings up some great points about how the tools are changing, and I think he’s got a point. The tools like twitter, britekite, tumblr, friendfeed, google reader ’sharing’, even facebook etc. are under the radar of mainstream media, as are the networks and value they are creating.

First of all, what the hell is a business model anyway? As with many terms used in strategy and business it is often used in different ways and interpreted differently by different people. Lots of entrepreneurs and misguided bloggers will conflate advertising and business model, but this is a mistake. Advertising could be your “revenue model” but it is not your business model. Your business model is all the things your company does to create value, and how some of that value gets turned into revenue. I like to think of business models as systems, groups of interconnected, and reinforcing activities that your company enables. Anyway, I was inspired to rant a little bit about this as I was looking through Mary Meeker’s presentation at Web 2.0 and a couple of things lept out at me.

1. Companies with cogent business models that provide consumer value should survive/thrive
2. Advertising spend tends to track to GDP (that’s going down)

In some ways it’s a little redundent to say “business models that provide consumer value” because if it doesn’t then it’s a broken business model, but I digress. The point is that if your business model is dependent on advertising revenue you should be looking for other ways to A. create value and B. get people to pay for that value.

via Austin Hill who is also on twitter at twitter.com/austinhill

I have actually been getting and sharing a lot of ideas recently through using twitter, if you are not using it yet, do it, it is becoming incredibly useful and for me has become the ultimate social network, i’m at twitter.com/karllong. I have not posted here in a while but that’s mainly because apart from my full time job i’m working on a couple of startups and applying some of my theories and ideas, the good news is it’s working I was just featured in both the Huffington Post and Boing Boing for my T-Shirt blog and T-shirt shop (oh and both of those connections were formed through Twitter with twitter.com/KristinGorski who writes for Huff Po and of course twitter.com/xenijardin of Boing Boing fame, are you starting to see the value of twitter?).

More reading about business models check out the comprehensive but rather uncritical wikipedia

UPDATE: for other sources of thinking about business models, also check out the Business Model Design Blog and Victor Lombari’s Noise Between Stations and Smart Experience that does workshops on Business Model Design

The insanity of music DRM stolen from XKCD