I recently participated in the Wharton Technology Conference, which is run by the students of the Wharton School of Business at the University of Pennsylvania. I moderated a Social Networking panel that included Sebastian Paquet from Social Text, a startup developing social software solutions for business; Jason Ford from Tocquigny Advertising, Interactive + Marketing; Emily Melton from Draper Fisher Jurveston, an early-stage venture capital firm; and Tom Cox from America Online.
The Internet has become an increasingly effective platform for collaborative applications that enable people to organize into online communities of all sorts, and as a result, social networks have emerged as a major force in the marketplace. Blogs, wikis and different kinds of social software are helping large numbers of people connect, collaborate and find each other online. Social networks are a major part of what many refer to as the second phase of the World Wide Web or Web 2.0. While some may argue that the term Web 2.0 is more marketing hype than actual substance, just about everyone will agree that the Web is becoming much more participatory and collaborative.
Over the last several months I have personally become more involved in social networking activities, driven by my interests in the evolution of the Internet, collaborative innovation, and in particular, my embrace of blogging in May 2005. I have participated in IBM’s social networking events, industry panels and blogging roundtables. In my blog, I have posted entries about the growing power of communities in a number of areas like open source software, improving the quality of patents, contributing knowledge to the Web and the use of Internet-enabled worldwide discussions to help make decisions on important subjects. There is something very appealing about the notion of empowering communities and tapping into their emergent wisdom.
Our panel at the Wharton conference focused on the relevance of social software applications and “group voices” for business. Initially, we discussed two major kinds of social networking applications – those implemented within and between organizations and their various business partners in order to significantly improve expertise and productivity; and those implemented between businesses and consumers and intended to better support them, learn from them and hopefully establish closer relationships between the business and its customers. In the first category, we are seeing both large companies like IBM and Microsoft and new ventures developing a variety of collaborative platforms and tools designed to help people interact and work more effectively with each other. Social software is a very active area for innovation given the importance and opportunities for improving the productivity of organizations in business and society.
Equally innovative are the efforts emerging around the use of social networks for marketing to consumers. Using the Internet for marketing is of course nothing new, but what is new is the participatory nature of the marketing. Whereas in the past the consumers were passive, they are now very active, communicating not only with the business, but among themselves, discussing, evaluating praising, and often critiquing a company’s products and services. Every business needs to understand how to leverage these new marketing opportunities to establish a closer relationship between their brands and the people who use them. At the very least, every business needs to monitor what people out there are saying to each other about the business and its products, so they can identify problems and quickly correct them before they turn into a crisis. Lots of new ideas and new ventures are emerging in this space.
Our panel included extensive interactions with the audience. For example, there were questions as to whether social networking kinds of marketing efforts applied to small businesses as well as large ones, and our panel gave a number of concrete examples involving small businesses, including in the music business where some bands are now linking directly to their fans. There will likely be a large variety of market segments and companies addressing the vastly different ways people respond to different kinds of products and services around the world and at different stages in their lives.
We observed that, with the empowerment of communities, businesses and other institutions might be “losing control” both of their brand and their workforce. A recent article quoted comments by David Sifry, founder and chief executive at Technorati regarding companies’ worries about the potential negative impact of blogs written by disgruntled customers: "In the world of the Internet, you don't own your brand. Your customers and your users own your brand. You're lucky if you get to shepherd it. That loss of control is very scary." That is why it is so important for a business and its employees to be out in the marketplace -- including the blogosphere and other new social network institutions -- actively learning how best to deal with these seemingly out-of-control forces. It is a major reason why IBM encourages its employees to participate in blogs, wikis, jams, and other community efforts, both within the company and out there in the marketplace.
Finally, we reflected on what drives people to come together as communities online without getting paid to do so. This is a subject that has received the attention of a number of academics in the last few years, and that undoubtedly will be investigated extensively in the future. I believe that, at the end of the day, the answer is very simple: we are, after all, social animals. We need to be part of communities, contribute to them and benefit from them. The urge to collaborate may very well be one of the most powerful and primal of human drives.
Heya, having all this wonderful web 2.0 (or whatever the brand name for this set of technology will be in the end) applications on the web, keep in mind the nature of so many ibmers: we are travelling - or is that mobile - salesmen, architects, specialists... with a need to work offline. Beside that: I love to see IBMs involvement in the social software sector.
Posted by: Christoph Görn | February 28, 2006 at 02:38 PM
As a Wharton alum, I have directly seen social networks and communities evolve, grow, and wither-away in an exceedingly short time window through the MBA program. An interesting point that businesses must understand is that social networks are a dynamic phenomenon, they gain power, change shape, oscillate around important issues and are otherwise difficult to get under control. Their dynamic nature is something that our existing toolset has yet to capture and is why new dynamic software (such as wiki’s) are growing at such a fast pace.
Businesses have to understand they have never really had control over their brands (see my comments on Charlene Li’s Forrester blog on social computing at http://blogs.forrester.com/charleneli/2006/02/forrsters_socia.html#comment-14309390) it is just now we have the tools to empirically understand where brand power truly comes from … the consumer.
It is the social computing aspect of today’s world that allows each and every consumer to leverage their brand-building or breaking opinion quickly to shape the corporate landscape. The companies that figure out how to understand (not control) the dynamic nature of the new social network will have the best chance of creating valuable brands.
Posted by: Steven Cardinale | March 06, 2006 at 12:05 PM