As usual, Dave Pollard posts a well-thought-out, thorough piece on “Social Networking Tools & Knowledge Management: What You Can Do Now“. This was presented at the KMWorld and Intranets 2005 Conference. It includes an overview what was wrong with the traditional siloed social network model (Friendster, etc.), and what you can do within the context of a large corporation to take advantage of these technologies for better Knowledge Management.
A hotly debated topic in the blogosphere lately has been, what exactly is Web 2.0? Probably the most concise and comprehensible overview I’v seen is from Adaptive Path: Crucial DNA of Web 2.0
Another must-read piece if you’re interested in this subject is Clay Shirky’s “Ontology is Overrated: Categories, Links, and Tags“. I also recommend Social Bookmarking Tools: A General Review, by Tony Hammond, Timo Hannay, Ben Lund, and Joanna Scott.
Here’s the draft of an article we’re working on about how to raise capital with online networks. We’re particularly interested in more success stories about institutional investors who have used online networks to raise capital successfully.
We welcome feedback!
Raising Capital with Online Networks
Imagine Roger Nusbaum’s surprise when he returned to his Prescott, Arizona home to find several unsolicited messages from potential investors on his voice mail. Nusbaum, a portfolio manager at Your Source Financial in Arizona, received those phone calls because of a "blog", a journal published on the Internet.
Nusbaum is a frequent contributor to many online blogs. When Barron’s magazine recently profiled David Jackson’s network of finance blogs (including SeekingAlpha.com, ETFinvestor.com, and various industry specific blogs), they mentioned Nusbaum’s contributions about exchange-traded funds. That mention directly resulted in phone calls from some highly qualified investors, and Nusbaum has raised approximately $4m in assets directly from contacts received via his blog. “My blog really has evolved into a good source of leads, which is more than I expected when I first started,” Nusbaum commented in an e-mail to us.
Success stories like Nusbaum’s are becoming a common phenomenon as blogs and online networks are becoming a more and more important part of the business world. Using this technology, professional money managers are finding sources of capital from the far corners of the Web.
Of course, many investment vehicles are only open to accredited investors, and managers of these vehicles should not be perceived as advertising to unaccredited investors. However, there is nothing wrong with opining on market-related issues, and increasing your own visibility and investability in the process.
With new blogs appearing at the rate of 30,000 a day, and the increasing popularity of social network sites such as LinkedIn, more and more business relationships are being started and deals are being closed online. Even money managers, members of an industry known for its discretion, have been taking advantage of this new technology. LinkedIn reports numerous success stories from companies using the tool for due diligence.
Blogging (the activity of updating a blog) can significantly increase your professional profile. Greater Internet visibility results in you meeting more people, some of them potential investors. Another major advantage to blogging is that it provides a digital trail establishing your professional competence. Money managers who document their opinions of the capital markets and individual companies have made their opinions public knowledge. A potential investor is able to evaluate the ideas put forth and can determine his confidence in the money manager.
Consider the August 17th, 2005 edition of "Power Lunch" on CNBC. Jeff Matthews, a hedge fund manager at Ram Partners, and Patrick Byrne, the CEO of Overstock.com, faced off over Mr. Matthew’s criticism of Overstock.com’s strategy on his blog. Mr. Byrne has been in the media lately over his allegations that certain segments of the media, specifically the online community, are conspiring to devalue Overstock. This example shows the perceived (and actual) power of the Internet in the investment community. Mr. Matthews, by writing his opinions in a blog, is able to discuss business strategy, news and company behavior without needing one of the few scarce speaking platforms in the mainstream news media. Mr. Matthews said in an e-mail to us that, “I view my job as being to bring interesting facts to light, positive or negative, in order to generate intelligent discussion and feedback that might be useful to investors as they look for ways to make money.” Mr. Matthews plan is working, as his blog has become very popular in the online investment community.
“Social software” — the family of software that people use to analyze, leverage, and enable communication in their networks — isn’t limited to just blogs. Online network tools such as LinkedIn allow business professionals to increase the scope of their network by adding second and third degree connections they might not have known existed. Without these tools, you would not know that your friend’s friend works at a fund of funds. These social network sites allow you to search a database of people you have some connection with through your own contacts. This allows you to approach people with a warm introduction instead of a cold one.
Being more visible to the right type of people increases your chances of finding people who can be relevant to your goals. Also, making yourself easily accessible allows you to be approached by potential business partners with no marginal effort, once you create a strong online presence.
Albourne Village, run by hedge fund consultancy Albourne Partners, is an unusual example of an online community successfully serving a busy, time-sensitive group: hedge fund investors and others interested in the sector. About 25% of their members visit the site at least once a day, which is an extremely high usage rate versus other online communities. About 85% of their members visit the site at least once per month.
The Value Investors Club (“VIC”) is another example of an online community with extremely high quality content and an intensely engaged audience. Founded in 1999 by hedge-fund managers Joel Greenblatt and John Petry of Gotham Capital, Value Investors Club is a highly exclusive club for discussion of value-based investment ideas and of “special situations” (ie. spin-offs and recapitalizations). It currently has 220 members out of a maximum allowed of 250. It is free to join, and the club management even pays a $5,000 reward every week to the member with the top investment idea.
The requirements for entry are twofold: first, write an “A+” description of an investment idea, in keeping with the site’s Buffett/Graham investment style. VIC is primarily interested in opportunities based on value or special situations. VIC receives about 100 member applications per month, of which only about 1 in 15 are accepted. Second, assuming you are accepted, you must provide between two and six investment ideas per year. The reason for the six-idea maximum is that VIC only wants your very best investment ideas.
The advantages of being known and trusted by relevant people are well documented in the academic literature. Online networks and social software are an extension of the traditional ways in which people have connected with one another face to face. Something as simple as blogging is helping Roger Nusbaum to raise capital and allowed Jeff Matthews to gain national exposure. You can do the same.
For definitions of terms related to social software please visit http://www.thevirtualhandshake.com/glossary.htm.
David Teten is CEO of Nitron Advisors (www.nitronadvisors.com), which helps hedge funds and other institutional investors make profitable decisions by giving them direct access to industry experts. You can access our Circle of Experts by phone, survey, or in-person meetings, and talk with industry executives, front-line managers, researchers, regulatory advisors, customers, and competitors from a wide range of industries, particularly technology and energy. To qualify for a free initial expert consultation, contact us at NitronAdvisors.com. David is coauthor of The Virtual Handshake: Opening Doors and Closing Deals Online, the first book on how to use online networks to find your next investor, business partner, next client, or next job. He runs a detailed blog and resource site about online networks at TheVirtualHandshake.com, and his personal blog is "Brain Food" (www.Teten.com/blog).
Harish Venkatesh is currently a student at the Richard Ivey School of Business, Canada’s top-ranked business school. He recently interned as a research analyst with Nitron Advisors. At Ivey, Harish is actively involved in the University Student’s Council, Investment Club, and is an avid tennis player.
I’ve been involved for a couple of months in the beta testing of a new toolbar, Free Traffic Bar. I’ve been using another traffic-generator toolbar, InstantBuzz, for a while and been reasonably happy with the results, so when I heard that Garland Coulson, aka The E-Business Tutor, was working on something even better, I was certainly optimistic.
Well, I was blown away by Free Traffic Bar. Yes, it’s a way to generate qualified traffic to your site for free, just for giving up a little bit of screen real estate. But unlike InstantBuzz, which is really just an ad bar, Free Traffic Bar is an indispensible tool for anyone marketing products or services online, or for that matter, anyone who uses the web as a research tool (isn’t that everybody?).
FreeTrafficBar has two major value-added toolsets. The first is an all-in-one interface to a variety of web research tools, including:
- All major search engines
- Blog and other specialty search engines
- Keyword analysis
- URL analysis, including HTML analysis, link checkers, etc.
- Popularity analysis (Alexa, Google PageRank, etc.)
- Business research (Hoovers, Yahoo Finance)
- Reference sites (About.com, dictionary, thesaurus, encyclopedia)
…and much more
The second is a collection of web marketing tools, including:
- Online business communities (Ryze, LinkedIn, Ecademy, etc.)
- Article marketing
- Headline analyzer and writing tips
- Affiliate program directories
- Ad tracking
- Blog hosting
- Legitimate money-making opportunities
…and much more
I haven’t even begun to explore it all, and already I’m profoundly struck by how much more there is I could/should be doing to promote the book and my other business activities.
I’ve made special arrangements with Garland to offer our blog readers 10,000 bonus ad credits when you sign up for Free Traffic Bar. All you have to do to receive your credits is:
- Sign up via this link.
- Download and install the toolbar.
- Send a support ticket requesting your 10,000 bonus credits as part of The Virtual Handshake promotion (you can do this through the toolbar or the member area of their website).
My holiday gift to all of you! Merry Marketing!
written by Peter Clayton:
I attended an Internet conference hosed by SG Cowen last Thursday in NYC – their first Internet conference since 2000, btw, — Kris Jacob, EVP of Business Development at Podshow told the audience that…
– currently 10m people listen to podcasts regularly
– there are 50m mp3 players in the US
– 150m mp3 enabled cell phones – US
and the kicker – 18-34 demographic are NOT listening to traditional radio (can’t imagine why) – of course, this age group is advertiser’s sweet spot.
Ad agencies and advertisers are taking podcasting seriously – looking for ways to sponsor without being intrusive.
there was a lot of focus on search at the conference (John Battelle, author of “Search” and cofounding editor of Wired and founder of Industry Standard spoke) – consensus opinion – search is the “killer app” and the game is over – won by Google and Yahoo.
Cowen projected that Goggle’s share price could hit $650! Also, they believe Google’s spending on R&D and capital expenditures will eclipse MSN and Yahoo in 2006 – to 1.1b – they project MSN at $775m and Yahoo at $696m.
Another company that grabbed my attention is quigo.com – based in NYC – Mike Yavonditte is the CEO -
WizBang is currently holding voting for their annual Weblog Awards. Apparently a number of the nominees, particularly in the Best Business Blog category, are campaigning for votes. Now, I’m not just talking about posting in their own blog and encouraging readers to go vote, I’m talking about going out into mailing lists, social networking sites, etc., and encouraging people to vote for them.
Is this ethical? I think it’s a gray area. I certainly think it’s reasonable to let your readers know about the voting and encourage them to go vote. Maybe you even contact your immediate friends and colleagues. But at some point there’s a line, isn’t there? If the voting ends up being a result of campaigning, does the winner really deserve the title of “Best”, or just “Most Popular”, or perhaps merely “Most Effective Campaigner”?
Anyway, they are what they are, regardless of my opinion. I just encourage you to go vote, not just for your favorite, but use this as an opportunity to explore some blogs that you may not even have known about and then vote for which one you truly think is best. That’ll take a little more time, but you might learn about some great resources, and besides, it’s the honest approach.
Intriguingly, while there have been a number of recent acquisitions in the social networking space (in case you haven’t been keeping score, MySpace was recently purchased by News Corp, Dodgeball by Google, Tickle by Monster, and Flickr by Yahoo), most have been entirely in the web arena. The ITV-FriendsReunited deal is the first I know of by a TV-centered media company.
I expect it won’t be the last, as highly sticky web venues like social networking continues to erode attention from TV and other traditional media.
I saw the headline in my daily Google alerts and it just about put me into shock: “Online networking used by half of U.S. managers”. So I decided to check out the story.
OK, I don’t want to be too hard on the author of the article. The data says exactly what it is, it’s just the headline that’s a little misleading. The rest of the article reinforces exactly what we’ve been talking about the past couple of years:
“We expect this trend to grow dramatically and evolve further as more and more senior-level professionals familiarise themselves with blogging and online networking services,” said Steve Purello, general manager of Workstream Career Networks, the company behind 6FigureJobs.
Chairing last week’s Virtual Handshake conference, “Beyond Blogs and Social Networks: How the Virtual Handshake and Consumer Generated Media Will Make or Break Your Business” was an honor and a pleasure. I’d like to thank Stuart Williams, Ali Curi, and Don Friedman of the Strategic Research Institute for making the conference happen.
For those of you that did not attend, you can get a feel for the event by looking at all the blog posts at TheVirtualHandshake.com/blog for December 1st and 2nd, 2005. I have also included links to the slides that were presented, in those cases where I had access to them.
You can download my two keynotes here:
Following are the key blog posts:
Managing Relationships with Influencer Bloggers
Panel: New Trends in RSS
Anne Berkowitch, cofounder and CEO, SelectMinds
Geoff Hyatt, CEO, Contact Network Corporation
Glenn Gutmacher, Microsoft, on Recruiting with Online Networks
Marty Schwimmer on Marketing to Large Corporations with a Blog
Sanford Dickert: Blogging for Business Performance
Larry Bodine on Marketing with Blogs
Steven Cohen, Senior Librarian , Pubsub, on Real-Time Web Search
Monitoring Real-Time Consumer-Generated Media
Corporate BloggingReal World Success Stories
MediaBistro and GoBigNetwork CEOs on Online Social Networks
Dan Burstein on Blogging
Michael Wing, IBM, on Corporate Blogging and Jamming
Rob Key, CEO Converseon, on Consumer-Generated Media
Steve Rubel on Blogs/Consumer Generated Media
Notes from todays Virtual Handshake conference: Jonathan Carson, Buzzmetrics
We hope to host a similar event next year, and very much hope that all of you can attend again! We welcome your suggestions for speakers, topics, and other ways in which to make next year’s social software conference as valuable as possible.
My last notes from the Virtual Handshake conference:
Idil Cakim, Director, Knowledge Development, Burson-Marsteller, speaking on “Managing Relationships with Influencer Bloggers”.
A shortened version of Idil’s presentation is here: Managing Relations with Influencer/Maven Bloggers
She recently wrote a short piece that cites some relevant figures about the most influential bloggers: Word-of-MouthTrickles Offline and Online