Category: Twitter

The Next Start-up Darling

I’ve long been amazed how us techies jump on the “hot company of the day” and create the next big thing in our minds; even if the mainstream hasn’t heard of them and no money is being made.

My quick list of the past few years is below with roughly the years when each company became a household name, or the darling of the start-up world, not years founded:

2005 – MySpace

2006 – YouTube

2007 – Digg

2008 – Facebook

2009 – Twitter

2010 – Foursquare

2011 – GroupOn

All of these companies became superstars in the start-up community well before the masses had even heard of them. We congratulate and admire them while the average joe wonders what they are. It’s a phenomenon that energizes founders to press on for mainstream adoption, gives fuel to VCs, and allows products to mature through feedback. It also however, generates inflated egos among founders, and ill-fated attempts by others looking to create a better mousetrap of the shiny new thing.

The biggest problem is that hype runs ahead of value and founders often miss the boat. We get into a cycle of “new thing-geek fame-inflated ego-no success-death”. When you look at the list above only Facebook survived the cycle and established a revenue model that delivers. Twitter? Sorry, not there yet. Foursquare? Unless you’re nuvo-tech you’re not using it, and GroupOn is printing money but advertiser value is a question mark while everyone from Facebook to my next door neighbor is replicating the model – long-term success is a toss-up.

Case in point #1: Digg

A few years ago Digg was the start-up darling, the place to go for the best news headlines. To get “dug” was huge, and being near the top of the list meant massive traffic. Jay Adelson and Kevin Rose built a winner complete with an advertising deal with Microsoft. What happened? Digg didn’t sell and a real revenue model never came. Today Digg is in shambles after a failed re-design, losing traffic, and there are better ways to find top news stories. Is it worth $200M today? Doubt it.

Case in point #2: Foursquare

That’s right, Foursquare, the start-up darling of the day. Well, badges or becoming a “mayor” don’t really make money so the play is now partnering with brands. I hope it works and Foursquare is successful. But in the same rewards space is Shopkick, who built around the rewards+location model from the outset and is in market; Best Buy has rolled Shopkick out to 257 stores.

Let’s take a look at Foursquare’s roller coaster year…

– Everyone in the start-up world is checking in, becoming a mayor, and having a blast. Average Joe has no idea what Foursquare is.

– A few months later, Gowalla, MyTown and Foursquare are growing and getting massive praise in the blogosphere. Average Joe still has no idea.

– In April, Techcrunch’s Mike Arrington urged Foursquare founders not to sell to Yahoo but to go for it. In September, Techcrunch sold to AOL for $30M.

– Facebook Places launches directly competing with Foursquare et al. and with massive reach in their pocket and likely not looking to give people badges.

– Recently, Foursquare founders were featured in a Gap ad. Only geeks noticed.

– Just last week, Techcrunch published an article questioning Foursquare (and Gowalla) and labeling them the past unless they do something. Average Joe still isn’t checking in.

My guess is that Foursquare will either sell to Google or someone else that will attempt to figure out a business model. I hope it doesn’t become Digg v2.

Don’t Miss the Boat

My point is simple, it comes down to what people will pay for. Don’t believe your hype and get screwed. Make money or sell.

a) You have a cool company without a business model, but early adoption is growing fast. You’re the darling of the start-up crowd, and others are starting to copy you.

You need to: figure out what your real value is and how you’ll make money while you have the time. If you can’t figure it out but you have a big fish interested then sell while you’re hot. Don’t kid yourself – early adopters move on to the next new thing, VCs lose interest, and you’re left holding the (empty) bag.

Examples: Facebook figured it out. YouTube and MySpace sold. Digg didn’t. Foursquare and Twitter are on the clock.

b) You figured out your revenue model early and built your company to realize it. People/companies are excited because what you provide makes sense and they will pay for it. Technology is simply the tool that’s solving a real problem. Your company might be getting less hype but it’s making money and you’re happy. Personally, these are the companies I love. You run a great business (Amazon) or get acquired at a price that recognizes your hard work and accomplishments (Zappos, PayPal).

Examples: ShopKick and OpenTable are making money. Zappos and PayPal made real money then got the big payout. Google, Amazon, Ebay, and lots of other great companies just keep growing and never sold.

The latest rumor is that Google is interested in GroupOn, offered to buy Twitter, and might be interested in Foursquare. Henry Blodget thinks they should buy all three. I’m not sure I agree that it’s a smart idea for Google just because they have the cash, but I will say that it makes sense for all of these companies to sell. GroupOn is making money but the space is getting crowded fast and could become a commodity. Twitter is still looking for revenue and I hope figures it out, and Foursquare…well, remains to be seen if brands really care.

Do something great that adds value. You’ll have a blast and make money and if a big fish comes knocking you’ll be in the driver’s seat to sell and do it again or keep doing your thing.

If Twitter was 100 People…It’s Still All About You

Twitter100Just saw this great visualization on Flickr created by David McCandless. It displays a microcosm of what microblogging activity would look like if Twitter had only 100 users. The data is collected from a study completed by social media monitoring company Sysomos, and commented on by marketing guru Rohit Bhargava.

Essentially, it tells us that lots of people have created an account on Twitter but just as Twitter’s own Evan Williams recently stated there’s a long way to go for the enthusiasm to match engagement.

Rohit’s write-up provides great commentary on the conclusions presented in the study and is definitely worth a read to anyone interested in understanding what’s really happening in Twitter world.

Quick highlights:

  1. 21% (One Fifth) of Twitter accounts are empty placeholders
  2. Nearly 94% of all Twitter accounts have less than 100 followers
  3. March and April of 2009 were the tipping point for Twitter
  4. A small minority creates most of the activity
  5. Half of all Twitter users are not “active”
  6. Tuesday is the most active Twitter day (followed by Wednesday then Friday)
  7. APIs have been the key to Twitter’s growth & utility
  8. English still dominates Twitter

The study presents companies and brands with something to think about. What’s the value of Twitter, or really social media in general? I’ve previously posted that it’s understanding, strategy, and related action that determines business success in social media, and not simply jumping on the bandwagon of being ‘present’. The Sysomos study suggests that if you’re looking to connect with and communicate with your audience and consumers then you need to do what good marketing has always done; provide something valuable that people that people will love, enjoy, and share with friends.

Secret Sauce?

So what’s the secret to success of Twitter? It’s not a secret at all. It’s what works in any marketing medium:

A) Give something great to the world

B) Put your customers first

C) Reach the loud mouths and let them speak (just do A and B so they love you first)!

When it comes to getting your message across, the difference between social media vs. traditional marketing methods is really that you’re not in control of what responses the world will see. Plus, you don’t have to be present on Twitter or Facebook to actually be on Twitter or Facebook. People will talk about you and share their ideas with or without you. The only thing you can really control is your value.

So, don’t fret about your social media status. Have a presence, understand your audience, and know what the chatter is about,  but don’t get caught up in mass following, tweeting at 3am, or having lots of friends.  Concentrate on doing something great that people will love and you’ll be a social media darling whether you like it or not! 🙂

Twitter and Your Business… :) or FAIL?

Much has been made this week of Twitter’s 101 Guide for Business. With all the excitement around Twitter these past few months I’m glad Evan, Biz and team are leveraging the limelight to reach out and educate the enterprise on what Twitter is and what a valuable tool it can be for business. But (very big but!), Twitter, like every other tech tool is only as valuable as the corporate strategy and execution behind.

Here’s what Twitter says it can do for business…

So what does Twitter do for businesses?

Twitter is a communications platform that helps businesses and their customers do a number of useful things. As a business, you can use it to quickly share information with people interested in your company, gather real-time market intelligence and feedback, and build relationships with customers, partners and other people who care about your company. As an individual user, you can use Twitter to tell a company (or anyone else) that you’ve had a great–or disappointing–experience with their business, offer product ideas, and learn about great offers.

Great! In a nutshell Twitter is a communications platform a business can use to connect to customers. It’s PR, Marketing, Customer Relationship Management, and Customer Care all in one! Of course not.

What Twitter (or really Social Media) Really Means for Business

Twitter is the latest and greatest method of technology to connect us. As such, it can be used for any and all of the above needs but can also be a huge waste of company time and resources, and lead to disastrous outcomes. Factor in a recent Harvard study suggesting only about 10% of users generate 90% of activity, and the audience mix, and it becomes very clear…as usual, it’s not about the tools, it’s strategy and action that matter!

Twitter for Marketing: is your audience on Twitter? Are they active? Are they receptive to brand messaging? How can you reach them and not sound like a pushy sales person?

Twitter for Customer Care: which tweets matter and which are rants of a negative attention seeker? Which messages require action? What action? Do you have a process to respond effectively?

Twitter for Customer Relationship Management: do you have the tools to find out what’s being said about your brand/company? Which metrics matter? Is there a strategy to follow up and act?

Wait! Before dumping your budget into the company saving Twitter plan, recognize this: a whole lot of pundits were saying the same thing about Facebook last year! It’s not your Twitter strategy that matters, it’s your Social Media strategy and execution that is the key. The Web gives us many ways to make customers happier and business more successful and all tools used effectively can have great outcomes.

So before you stake your business or budget on social media ask these questions:

1. Is your corporate culture ready for social media; a place where you don’t always control the message?

2. Do you have a good understanding of the tools to engage and measure?

3. Do you know if your audience is engaged and on which platforms?

4. Can you devote company time and resources to be successful?

5. Ready for a brave new world where people control the message not you?

6. Can existing company processes and systems be used to take advantage of these great new opportunities to reach, enagage, and learn from consumers?

7. If yes to all (or most) of the above…ready to get started?

Need help, we’d be glad to lend a hand at Sensidea!