Social Networks

Quite an interesting article in Harvard Business Review about some research from the University of warwick on "Open Learning" circles in the business world. (I read teh hard copy, there is a summary behind a partial paywall over here). It really struck a chord to juxtapose it with the "Social Media Reality Check" event at POLIS last night. Joanne Jacobs liveblogged that over here, wasn't there but my impression was that the thing checked in last night was social media reality - at the entrance door

Anyway, the researchers show start would be recognised by any Social media adherent:

United by a common professional passion, participants would huddle around conference tables and compare data, trade insights, and argue over which designs would work best with local water systems. And the community achieved results: Participants found ways to significantly cut the time and cost involved in system design by increasing the pool of experience that they could draw upon, tapping insights from different disciplines, and recycling design ideas from other projects.

"Let them run free" was the original thinking, but these networks started to hit limits:

Too much attention from management, went the thinking, would crush the group’s collaborative nature. But the very informality of this community eventually rendered it obsolete. What happened to it was typical: The members gained access to more sophisticated design tools and to vast amounts of data via the internet. Increased global connectivity drew more people into the community and into individual projects. Soon the engineers were spending more time at their desks, gathering and organizing data, sorting through multiple versions of designs, and managing remote contacts. The community started to feel less intimate, and its members, less obligated to their peers. Swamped, the engineers found it difficult to justify time for voluntary meetings. Today the community in effect has dissolved—along with the hopes that it would continue generating high-impact ideas.

Again, anyone familiar with Social Media over a number of cycles (ie the Kool Aid has been drunk, digested and d****ated) will recognise this. What works seems to be to give them some form of top down management structure!

Our research has shown that many other communities failed for similar reasons. Nevertheless, communities of practice aren’t dead. Many are thriving—you’ll find them developing global processes, resolving troubled implementation, and guiding operational efforts. But they differ from their forebears in some important respects. Today they’re an actively managed part of the organization, with specific goals, explicit accountability, and clear executive oversight. To get experts to dedicate time to them, companies have to make sure that communities contribute meaningfully to the organization and operate efficiently.

Heresy! I hear you cry. Nonetheless, thats the emerging evidence. Its also my experience - if you want a Social Net group to achieve something, someone actually has to take charge.

This is the sort of headline every service must dread*, and for the much battered Google Buzz it comes from a near unimpeachable source - Social Media doyenne Charlene Li of Altimeter who saw that what her 4th Grade daughter was chatting to friends about was public on Google Buzz:

But what was most disturbing was looking at her friends’ conversations and realizing that some of them were chatting with complete strangers, and in some cases, sharing personal information like emails. Absolutely terrifying as these are 4th graders who have no clue.

I quickly turned off Google Buzz, (but I didn’t totally disable it, more on that below), dashed off an email to the parents of the friends she had been chatting with inside of Buzz (again, all in public, with their real names), and then finally took a long hard look at the situation.

She found, for example, that “iorgyinbathrooms” was following her child. Also, that Google is less than careful with the age of GMail users:

... I discovered that buried in Google’s terms of service somewhere is that children under the age of 13 are not allowed to have Gmail accounts. But unlike Facebook, which requires that people enter their birthdates when setting up accounts, Google makes no such attempt to educate people signing up for Gmail that such a provision is in place. As a result, while Google is absolved of responsibility because of the TOS, it could and should do a better job of complying with the Child Online Privacy Protection Act (COPPA).

This follows hot on the heels of Buzz being accused of all sorts of adult privacy errors including re-installing abusive ex husbands as stalkers, but as an issue this one trumps everything to date - and not even the Silicon Valley A List Apologistas that have defended Buzz to date will dare bat this one away.

Yet again, as we wrote in our piece about Buzz being a slow motion train wreck, it has been the total inability of a young, male, (probably largely) childless techie elite to imagine what the average user's life and concerns look like, and Google's systemic inability to rein them in that has led to this unnecessary situation (you would have thought that the hoo-ha last weekend would have sent alarm bells ringing on this sort of issue).

*Strictly speaking it was "New Google Buzz Privacy Nightmare: Scumbags Can Follow Your Kids!" from SAI which then pointed to Charlene's article. I merely translated it for a UK Sun-reading audience

Interesting piece on Pingdom about the age demographics of who is on which Social Network (see diagram above). Some corollaries are:

- The average social network user is 37 years old.
- LinkedIn, with its business focus, has a predictably high average user age; 44.
- The average Twitter user is 39 years old.
- The average Facebook user is 38 years old.
- The average MySpace user is 31 years old.
- Bebo has by far the youngest users, as witnessed earlier, with an average age of 28.

As high as 28 for Bebo! Maybe it's bimodal - Teens and Dirty Old Men? )

The mean usage by age groups are fascinating - check out 18 - 24 year olds:

- 0-17 Years - 15%
- 18-24 Years - 9% (The theoretical Facebook Generation?)
- 25-34 Years - 18%
- 35-44 Years - 25%
- 45-54 Years - 19%
- 55-64 Years - 10%
- 65+ Years - 3%

What does this tell me? That Social Media users, far from being "The Youth" are actually more of "The Fogeys" - the key demographics are those in mid-breeding, i.e. those that are stuck at home the most . The pre-kids and post kids demographics are out partying!

When we wrote about the factors that made Buzz into a Slow Motion Train Wreck, one of our hypotheses was that they didn't test it with a representative sample of typical users. We wrote:

Google say Buzz product was user tested, but I suspect it was by the same demographic who built it rather than the people who may use it.

Turns out that they didn't even test it with the standard Google "friends and family" groups either! Its on the BBC.

Many of the firm's new services are tested by the so-called Google Trusted Tester program, a network of friends and family of Google employees who are given confidential access to products before they launch.

Buzz was not tested by this program.

The result has been one of the biggest f*ck-ups Google has ever made, and in an area as sensitive as Social Media Privacy - what with Social Media being an area where Google has been less than stellar to date and Privacy being something they are increasingly in the dock over, that is absolutely incredible.

Various theories have emerged as to the why Google did this, from pure inexperienced hubris to the view that they were racing to get something out before Facebook launched its alternative webmail service, to protect Ad revenues.

In the old days, Kremlin watchers used to look at the fate that befell various apparatchiks, so watching the fate of Buzz Project manager (Todd Jackson) may tell which of these hypotheses is the case.

Of course, one could always shoot an Intern

It is quite interesting watching this unfold. As far as I can see, with Buzz, Google made a number of fundamental errors:

- The team that developed Buzz are apparently all young, male, supergeeks - alpha early adopters - who have clearly supped deep of the Kool Aid that is Google approach to Privacy (ie its dead, get used to it), a la Eric Schmidt

- The Google Business Model wants to open up people's data as much as possible (hence the Schmidtian view on Privacy), and thus the service was built to grab and expose all data it sees as the default condition

- Google say Buzz product was user tested, but I suspect it was by the same demographic who built it rather than the people who may use it.

- Older, Wiser heads were clearly either not involved in the product review process, or overruled due to the above points' considerations.

So the stage is set for a service that is built to be massively abusive of user privacy. This is of course despite the mounting evidence out there that:

- Get it wrong and you are in for a blogstorm - see Facebook Beacon.

- There has been a clear hardening of attitudes towards privacy abuse from users overall, in the last 2 months especially

I suspect Google, having the level of self belief it already does, was unable to properly account for these emerging risks in any internal review processes.

And so Buzz launches, and Google, being the biggest gorilla on the block and no slouch at self-promotion, gets 9 million messages in as many minutes, or whatever, and crows this from the rafters - but on Twitter people are saying "Hey, I'm just testing it not a rabid user, and its filling my inbox with sh*t I don't wan and calling that a win" (I paraphrase) and are starting to grumble about the privacy implications.

And then the sh*t hits the fan as all those users start to realise that Buzz is exposing their Gmail addresses to all and sundry. What the Googlers also probably didn't grok is that the email social graph is totally different to the curated, friend based social media one, and that scared a lot of people as all sorts of people who are not safely screened friends start to appear for all their followers to see.

Google's initial approach - as per any extremely self-confident company - was to tell these users not to be silly, that this was the way, the truth and so on, and to get its PR flacks and proxies to blog about how this was no big deal etc etc.

Which was dumb, and again showed the misunderstanding of the difference between email and social networks - it was only a matter of time before something like this happened (they had been warned already by a number of bloggers):

F**k you, Google — I use my private Gmail account to email my boyfriend and my mother. — There's a BIG drop-off between them and my other “most frequent” contacts. — You know who my third most frequent contact is? — My abusive ex-husband. — Which is why it's SO EXCITING

At this point they had started to hit the train buffers, but the Google position was amazingly conceited still (I'm looking at the timeline on Techmeme for all this by the way) - making some basic changes but not addressing the central issue of privacy:

We designed Buzz to make it easy to connect with others and have conversations about things that interest you, and it's great to see millions of you doing this already. It's still early, and we have a long list of improvements on the way. We look forward to hearing more suggestions and will continue to improve the Buzz experience with user transparency and control top of mind.

No worry, no hurry. Belatedly they scurry to start fixing Harriet's issues, but even so its lazy, casual:

We reached out to blogger in question this morning and addressed her concerns with Google Buzz and Google Reader. Some of the concerns were due to confusion the product experience created. Her report also helped us discover one bug and one product issue in Google Reader:

1) If you block people in Buzz, they still show up as following you in Reader. This is a bug, and we're working to fix it. Provided that your Google Reader shared items are protected, only the people you've explicitly allowed to see them can do so -- regardless of who appears to be following you in Reader.

2) Until now, there has not been functionality to block people from following you in Google Reader. We're adding this to the Reader interface.

We are making these two changes as fast as possible and we'll get them live in the next few days.

Next Few Days! Guys, you have got a few hours at most to sort this out - its the weekend, loads of people have now got the time to look at it (like this blog post) and loads of ordinary Gmail users are going to come home from work and discover this happening to them.

It is very clear what Google will have to do in the short term:

- Firstly, disconnect Buzz from GMail until they've sorted all this out. But they will resist it (update - are resisting this) as it destroys their instant market share massive

- Secondly, make the "expose privacy" functionality opt-in, not default. But they will resist this even more strongly as that is no doubt the core internal value proposition.

- Thirdly, Grovel. Admit they got it wrong. Blame an Intern for it all. Just do something to show they understand the errors of their ways.

It will be this grudging retreat to the obvious endgame position that will send tech blogger and user concerns into the stratosphere, and watching it take place is like watching a trainwreck happen in slow motion!.

(Update - first reluctant steps to change as we suggested seen over here - still not any formal heavy duty apology though, I think that's an error. I also don't know if this enough yet - especially given the legal interests that are apparently lining up)

They say that if Facebook was a country, it would be 350m people and the same size as the USA. Interestingly though, it's social networks break down into a number of regional ones, as noted in the diagram by Pete Warden (see above). He defines 6 distinct regions:

Stayathomia

Stretching from New York to Minnesota, this belt's defining feature is how near most people are to their friends, implying they don't move far. In most cases outside the largest cities, the most common connections are with immediately neighboring cities, and even New York only has one really long-range link in its top 10. Apart from Los Angeles, all of its strong ties are comparatively local.


Dixie

Probably the least surprising of the groupings, the Old South is known for its strong and shared culture, and the pattern of ties I see backs that up. Like Stayathomia, Dixie towns tend to have links mostly to other nearby cities rather than spanning the country. Atlanta is definitely the hub of the network, showing up in the top 5 list of almost every town in the region. Southern Florida is an exception to the cluster, with a lot of connections to the East Coast, presumably sun-seeking refugees.

Greater Texas

Orbiting around Dallas, the ties of the Gulf Coast towns and Oklahoma and Arkansas make them look more Texan than Southern. Unlike Stayathomia, there's a definite central city to this cluster, otherwise most towns just connect to their immediate neighbors.

Mormonia

The only region that's completely surrounded by another cluster, Mormonia mostly consists of Utah towns that are highly connected to each other, with an offshoot in Eastern Idaho. It's worth separating from the rest of the West because of how interwoven the communities are, and how relatively unlikely they are to have friends outside the region.

Nomadic West

The defining feature of this area is how likely even small towns are to be strongly connected to distant cities, it looks like the inhabitants have done a lot of moving around the county. For example, Boise, ID, Bend, OR and Phoenix, AZ all have much wider connections than you'd expect for towns their size:

Socalistan

Sorry Bay Area folks, but LA is definitely the center of gravity for this cluster. Almost everywhere in California and Nevada has links to both LA and SF, but LA is usually first. Part of that may be due to the way the cities are split up, but in tribute to the 8 years I spent there, I christened it Socalistan. Californians outside the super-cities tend to be most connected to other Californians, making almost as tight a cluster as Greater Texas.

Pacifica

The most boring of the clusters, the area around Seattle is disappointingly average. Tightly connected to each other, it doesn't look like Washingtonians are big travelers compared to the rest of the West, even though a lot of them claim to need a vacation!

I guess Amishia doesn't make it as they don't have the Interenetz

Aspirant Tory Politicians shall not say anything on Social Media Sites unless The Party has approved it first - Daily Mail:

David Cameron has ordered his party's candidates to submit their online utterances for vetting.

The strict edict issued to every Tory candidate across the country covers updates on social networking sites, such as Twitter and Facebook, as well as Internet blogs and websites.

The move aims to cut the number of gaffes in the run-up to the General Election when would-be MPs will face intense scrutiny.

No doubt the aim is to turn the individual MP's into online Politicobots, parroting the party line with absolute fidelity online. This is in effect what Labour did in 1997 via the technology of the day. One wonders why not just set up a Twitter and Facebook account in each MP's name and broadcast to it each day if this is the aim.

Problem is, it won't work as social media is, well, social - you converse. As Labour MP Kerry McCarthy ( named last year as 'Twitter Tsar'), said:

'The whole thing about new media is that you can't have this spin operation and control without destroying the spirit of it,' she said.

'You may put your foot in it from time to time but if you try to control it, it just becomes sterile.

This one looks like it's going to be fun to watch......

Soon after Bo Peabody explained why Consumer Social Media will never make much money comes news that FrienfFinder Networks has pulled its IPO - TechCrunch:

With this short statement, FriendFinder Networks has canceled its IPO plans, following a widely reported delay in trading earlier this week.

Investors are analysts were wary of the company’s plans to go public (on the New York Stock Exchange, under the symbol “FFN.”) in order to repay debt – it was reportedly paying $75 million in interest on operating profit of $45 million last year and carries a massive debt load of $471 million.

The internet holding company reported net revenue of $244.4 million in the nine months ended 30 September 2009, compared with $243.9 million in the same period a year ago. Even with this small revenue increase, filings showed sales were flat.

Its a sad day in the frothy world of Social Media when even the Adult end of it can't, er, raise anything, especially given that the FFN systems already use the Freemium model so beloved of Social Media Evangelists today. However, eyeballing the financials one can see why there may have been investor reluctance in the current climate, which is far from frothy.

FriendFinder has been going a long time, I recall looking at it in 2005 when were were analyzing designs of different Social network systems. We covered the IPO initially in 2008 over here) - one of the interesting facts from the IPO documents was that Freemium customers were c 75% of revenues and c 3% of all customers.

These are the slides from my presentation at the Social Media in Enterprises session. In brief, I looked at 3 key areas of Enterprise value Creation:

Innovation

All the work we have done implies that being able to create and sustain innovation in an enterprise is key to long term survival. When we look at social media's capability in the space, it seems it's main beneficial use is to leverage more brains than are within the enterprise. Looking at the ways these are being done now, there seems to be a 2x2 emerging on 2 axes:

- Active v Passive social engagement, ie listening vs engaging

- Light vs Heavy analysis - buzz monitoring vs datamining

Lightweight, Passive Systems - Buzz Monitoring and Zeitgeist measurement are typical uses, heavily utilised by PR/MR companies

Lightweight, Active System - Crowdsourcing of simple market research, product information etc to understand. Prediction markets are a typical emergent application

Heavyweight, Passive Systems - Datamining, mashing of many data sources to deduce much more detailed information

Heavyweight, Active Systems - automating the Delphi Technique (getting expert opinions) is much easier on modern systems. Complex prediction markets and auctions for answers from the global hivemind have been used for pharmaceutical, mining, financial and other industries.

Operational Excellence

There are 3 main areas of value creation in the operational areas:

Revenue Creation - this falls into 2 areas, ie increasing sales volumes and per unit value. So far, Social Media has mainly been used for indirect volume generation (buzz, viral marketing, prospecting) rather than direct (sales) and not a lot in influencing increasing price (though there is increasing evidence of it being useful in cross selling).

Operational Cost Reduction - There are two main categories - reducing churn and reducing operating costs. Social Media is heavily used in customer service, and shows promise in churn reduction - very valuable in high churn industries. Social Media in its eraly days was heavily touted as a tool to reduce operational costs - wikis etc being the tools of choice - but like all office automation promises, it is yet to live up to the promises made (and if you look at the discussion in the session, you can see why - this requires a lot of replumbing of the workflows to operate)

Capital Cost Reduction - there are two main areas - maximising exiting capacity utilisation, and reducing future capacity utilisation. So far there has been very little social media penetration in this area, though we have seen companies using things like webcams and IM for long distance analysis of equipment failure.

Rapid Reaction to Change

Being able to sense the movement in a market and react faster than the competition is a key facet of survival and sustainable ability to beat the competition. The OODA model (for observe, orient, decide, and act) is a typical feedback loop cycle - we like it as it was developed for the military, who have understood the benefits of faster reaction than the opposition. Other terms for this are things like Agile or Lean operations, Just-In-Time systems etc. What they all rely on is rapid delivery of clear information and the ability to parse it and act on it.

In theory, Social Media has an impact here due to its observed ability to spread data fast and marshall resources - we think this is potentially a major area of use, but - again, as noted in the sessions, the amount of re-plumbing designed to get the benefits.

Challenges for Social Media

We believe there are 5 main challenges for Social media adoption:

- Early Day “Chasm” Technology – The basic technologies are not yet fit for mainstream usage in enterprises, a lot of grunt work needs to occur.

- Hype Curve impact – a lot of snake oil salesmen queer the market, destroying credibility

- Security Concerns – Enterprises have many valid concerns about security that need to be addressed, consumer social media has very poor security capability today and little that Facebook et al are doing inspires confidence (as Bruce Schneier points out, they are probably going in the wrong direction)

- ROI not clear – nothing outside of early day pilots gets done in an enterprise without a business case, an ROI is a pre-requisite

- Organisation Re-design - social media, like previous new working approaches such as JIT, requires significant organisation redesign. This takes time.

How it rises to these challenges will define its success over the next few years.

(By the way, that was the 2000'th Broadstuff post)

Hutch Carpenter has an interesting post on the evolution of social capital:

In a recent interview with EMC’s Stu Miniman about the future of the web, I predicted that in 20 years, we’ll all have online reputation scores. Little badges, numbers that communicate our level of authority, this sort of thing. And these reputations will have tangible impact.

He visualises these trends in the diagram above. In summary they are:

Rate performance of businesses

eBay, which went public back in 1998, played an important role in socializing the concept of people providing online ratings for online sellers. After we receive our purchase, we rate the seller. The collective wisdom identifies top sellers. Got your eye in that Donkey Kong game? Who are you most likely to trust…?


Migration of transparent work and information online

I found this recent Kaiser Family Foundation study fascinating. The amount of time kids spend online – smart phone, computer, television or other electronic device – is now at an all-time high. There’s no denying this: future workers are going to be more accustomed to online engagement and information-seeking than any generation before.


Rely on social media for information

An emerging trend is the transition of where we seek information. Remember libraries, magazines and microfiche? Then the 1.0 websites where we got information? Then the portals that aggregated information from major media sites? Then search augmented all this information consumption?


Putting this all together

It’s that last trend, still early in its cycle, that really points toward the development of formal, online reputations. When we started transacting online with complete strangers or small businesses we never knew, we needed a basis for understanding their credibility. It turns out, crowdsourced ratings are excellent indicators of quality. It also causes small businesses to be aware of the quality of their products and services.

In the years ahead, expect increased usage of social media for getting information and sourcing people, products and services.

I think this is very succinctly argued and broadly agree with it. The question of course is how is this reputation going to be mediated. Hutch quotes Google's Amit Singhal:

“You earn reputation, and then you give reputation. If lots of people follow you, and then you follow someone–then even though this [new person] does not have lots of followers,” his tweet is deemed valuable because his followers are themselves followed widely, Singhal says. It is “definitely, definitely” more than a popularity contest, he adds.

Now this is where I start to get worried - this is describing the Link Economy as it is today, but the way it works is that its a semi Feudal system where the rich get richer and the "new follower" 's best strategy is to suck up to the popular ones to get that all important link (you can see this behaviour on Twitter) - and woe betide someone who falls out of favour and the lynchmob get them.. Not only that, the Link Economy chooses for popularity not quality, for ephemera and not , for following the fashion rather than the facts. We see it with this blog - write a long high quality article and you get ourr normal traffic and a few intelligent people commenting - write a witty, snarky but lightweight post (aka linkbait) on the ephemera of the day, comments flood in and the traffic goes through the roof. Guess which one the Link Economy rewards?

Now to be fair, these systems are in their infancy and no doubt there will be a lot of development to build ways to mediate them. But when you consider it took Europe 700 years and many bloody wars to get rid of its Feudal systems, it gives you an indication of how vested interests like these are if they are allowed to take root. And you only have to read Animal Farm to see how any system gets perverted.

Now this may sound a bit far fetched, but the original novel on Digital Social Capital (Cory Doctorow's Down and Out in the Magic Kingdom) was Dystopian, not Utopian - yet ironically today much of the the writing on Whuffie (the social media currency in Doctorow's novel) is Utopian.

(Update - I didn't realise it, but there is a whole Social Media thingy - #davossocial on Twitter - going on at Davos World Economic Forum this week, Davos is that place where, as the BBC put it, "All the people who got the world into the sh*t its in go". Now, if I were a conspiracy theorist..... )