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February 26, 2009
Social media & the decentralization of freedom and control
Here's a great piece in Ad Age by Peter Blackshaw about how social media is transforming marketing, accelerating innovation, increasing leverage and helping to dramatically reduce costs -- for those that participate.
I met Peter in 1994/1995 when we at Red Herring -- then only a magazine with a single AOL email address -- connected with Peter and three of his peers at Harvard Business School to help us figure out our "online" strategy. We considered three options: build a community on AOL/CompuServe/Prodigy, build our own BBS, build this new thing called a "web site." It's funny to think that at first the decision was not obvious. It was relatively easy to rule out doing our own BBS, but to that point most online communities were built within the major ISPs and that seemed rational: that's where all the people were! People forget just how powerful AOL was at one time.
In one of my favorite issues of Red Herring (which sadly I cannot find an archive of on RedHerring.com or Internet Archive. Come on Herring folks, fix those 404s!) we had Steve Case face-off against Marc Andreessen about closed v. open communities. The decision wasn't easy. You didn't get as much control as you wanted with AOL, but they had the power, the audience, the tools to build your community, and the ability to help you monetize them. On the other hand, building web sites was expensive, they looked clunky, there weren't nearly as many people using web browsers (what's a web browser??) as used AOL accounts, and so much about the experience was new and untested.
Of course, we all know how this turned out. We and the HBS crew agreed that the control and freedom afforded to us by the web would far outweigh the audience, tool, and economic advantages of the big guys. We knew our own site would cost us more to build and it would be more of a challenge to get people there and to make money, but it would be ours. We could do with it what we liked and we could grow with it. The asset we were building would be our own, not someone else's.
This is why the web won and the closed communities lost. It gave people freedom and control over what they wanted to do and stimulated a diversity that drove an incredible amount innovation that one service could simply never provide. In the end, the tools got easier (witness blogging software, for example); traffic swung dramatically online, aided by search engines; and web revenues eclipsed closed community revenues.
Looking back, I think this history is extremely informative about the way forward. And history is repeating itself. The Internet necessarily gravitates towards open over closed, decentralization, and and freedom and control moves to the edges -- for individuals and organizations -- rather then the center, even when the closed systems have an advantage of audience and tools.
But the process isn't linear. It goes in waves. The wave started with AOL, and for a time centralized power won out over distributed power. But people chose their own control and freedom over the short term benefits of audience and tools, and the audience and tools then followed.
I think we are in a similar cycle now. The mainstream social networks, MySpace, Facebook, YouTube, and increasingly Twitter, feel a lot more open than AOL was, but in the end, those services have the ultimate control over their users. Their logo is on the top left of the page. They determine whether and how people can design their pages or make money. They set the terms of service. The can deliver audience, but it's THEIR audience. They have great tools to create things, but within strict limits. But in social media too, as always happens on the Internet, freedom and control will decentralize. The tools and services available to build your own social media sites, just like the tools of old to help you build your own web sites, are getting much better, easier, and less expensive. And a people, brands, companies, organizations build their own social media sites, the audience will follow.
It will be different than is was before in the sense that the centers and the edges will be much more connected and symbiotic than the binary choice of closed v. open sites of the early web, but the fundamental drivers will be the same. Companies and brands should certainly learn how to market via Facebook, YouTube, and Twitter, but ultimately it will be through their own sites and blogs where they will find their biggest returns.
Then there's innovation -- the engine of value creation and company growth. Social media is one massive feedback loop. It's chaotic on the surface, but unmistakably efficient if you consider the life cycle of vetting a good idea or absorbing the ideas of others. If you really peel the onion on what's happening across blogs, Twitter and other online communities, brands are setting up de facto listening labs that rewrite the rules of gathering and managing feedback. We're getting more ideas faster. The funnel is broadening. The filters are sharper, more immediate and grounded in deeper levels of intimacy with the product or proposition.
I met Peter in 1994/1995 when we at Red Herring -- then only a magazine with a single AOL email address -- connected with Peter and three of his peers at Harvard Business School to help us figure out our "online" strategy. We considered three options: build a community on AOL/CompuServe/Prodigy, build our own BBS, build this new thing called a "web site." It's funny to think that at first the decision was not obvious. It was relatively easy to rule out doing our own BBS, but to that point most online communities were built within the major ISPs and that seemed rational: that's where all the people were! People forget just how powerful AOL was at one time.
In one of my favorite issues of Red Herring (which sadly I cannot find an archive of on RedHerring.com or Internet Archive. Come on Herring folks, fix those 404s!) we had Steve Case face-off against Marc Andreessen about closed v. open communities. The decision wasn't easy. You didn't get as much control as you wanted with AOL, but they had the power, the audience, the tools to build your community, and the ability to help you monetize them. On the other hand, building web sites was expensive, they looked clunky, there weren't nearly as many people using web browsers (what's a web browser??) as used AOL accounts, and so much about the experience was new and untested.
Of course, we all know how this turned out. We and the HBS crew agreed that the control and freedom afforded to us by the web would far outweigh the audience, tool, and economic advantages of the big guys. We knew our own site would cost us more to build and it would be more of a challenge to get people there and to make money, but it would be ours. We could do with it what we liked and we could grow with it. The asset we were building would be our own, not someone else's.
This is why the web won and the closed communities lost. It gave people freedom and control over what they wanted to do and stimulated a diversity that drove an incredible amount innovation that one service could simply never provide. In the end, the tools got easier (witness blogging software, for example); traffic swung dramatically online, aided by search engines; and web revenues eclipsed closed community revenues.
Looking back, I think this history is extremely informative about the way forward. And history is repeating itself. The Internet necessarily gravitates towards open over closed, decentralization, and and freedom and control moves to the edges -- for individuals and organizations -- rather then the center, even when the closed systems have an advantage of audience and tools.
But the process isn't linear. It goes in waves. The wave started with AOL, and for a time centralized power won out over distributed power. But people chose their own control and freedom over the short term benefits of audience and tools, and the audience and tools then followed.
I think we are in a similar cycle now. The mainstream social networks, MySpace, Facebook, YouTube, and increasingly Twitter, feel a lot more open than AOL was, but in the end, those services have the ultimate control over their users. Their logo is on the top left of the page. They determine whether and how people can design their pages or make money. They set the terms of service. The can deliver audience, but it's THEIR audience. They have great tools to create things, but within strict limits. But in social media too, as always happens on the Internet, freedom and control will decentralize. The tools and services available to build your own social media sites, just like the tools of old to help you build your own web sites, are getting much better, easier, and less expensive. And a people, brands, companies, organizations build their own social media sites, the audience will follow.
It will be different than is was before in the sense that the centers and the edges will be much more connected and symbiotic than the binary choice of closed v. open sites of the early web, but the fundamental drivers will be the same. Companies and brands should certainly learn how to market via Facebook, YouTube, and Twitter, but ultimately it will be through their own sites and blogs where they will find their biggest returns.
