I recently attended a private talk by Dr. Eric Clemons, Professor of Information Management at The Wharton School, at the offices of www.firstwivesworld.com, the first social network and community dedicated to women transitioning through divorce. He is currently creating a case study on the site. I definitely love their name!
He avoids being an investor in companies he profiles/analyzes.
Quoting a panelist from a panel he moderated: “We may not do the deep analysis of traditional journalists, but we’re so wired. We’re a collective mind.”
“We don’t need fact-checkers. We don’t need editors”.
Is the internet a breakthrough in human communication?
Social networks still have norms, which constrain what you can do.
Superficial monetization of a social network with advertising is a failure, because it doesn’t fit the social norms.
In beginning of radio: there was no programming because there was no one listening. RCA owned a radio station and made radios. They solved the chicken & egg program by giving away thousands of radios in NY which were tuned to only 1 station, theirs. Then they could go to media guys, and tell them 100% of NY radio market is listening to RCA. Now we can go to Colgate and sell advertising.
Have you ever noticed that all the ads on the different channels run all at the same time? Because you agreed to be captive in exchange for free content.
BUT the net is entirely voluntary. It’s like showing up at a medieval faire.
Most attempts to monetize the net are ill-conceived at best to offensive.
British Airways used to have a promotion: if you buy a 1st class seat, you could bring your wife. Problem: people would bring their mistresses.
Facebook Beacon is making the same mistake. If I buy black lacy lingerie, 3 possibilities:
1) bought it for myself
2) bought it for wife
3) bought it for another woman
In all of these scenarios, I don’t want my wife / network to know about this.
My first wife left (rightly). She said, “During the day, I’m first in my class at Cornell Law. I come home and I do your cooking. Do your own cooking!”
Ultimate terror: 2:45am. If I need to whine, the only person who will listen to me whine is the reason I’m whining.
When I was 25 and my wife left, I was disoriented. It had been my life, my car. When she left, my network fell apart. We have a group that is in need but too embarrassed to ask.
I had grad students whom I paid to play Second Life, and another whom I paid to play World of Warcraft. One was a jock, who created a character called Sweetie. He would send her to bars, salsa with other characters, and then watch her be violated.
No one on a dating site wants ONLY a virtual relationship.
3 P’s of a successful online network
1) Personally relevant. If it’s not relevant, it’s just bad TV.
3) Physical transition
The hard part of a social network is monetizing it.
How would you feel if a woman you met on First Wives World said, “I’m a therapist, and I want to be paid for providing you some counsel.” You have to be careful about violating norms.
I have a freshman, who has a company. You send him a text message, and he’ll forward them to everyone you know. E.g., when Heath Ledger died, I got 70 messages. Some other faculty said, they had to cancel classes, because everyone was either texting or crying. The students say they get 10 messages/hour, except Friday/Saturday night when they get 40 messages/hour.
The people we’re trying to capture are ‘digital virgins’. I want them to become digital residents.
A lot of people freeze halfway through the registration process on First Wives World. As soon as my activity online is linked to my real identity, I’m nervous.
We’ve done studies of the depth/loyalty of the average 19-year-old employee. They’re both cocky & ignorant.
The alternative to advertising is letting users design it.
Here’s what FirstWivesWorld should do. Tell ETrade: we won’t take your ads. But give us $0.5m to do research on needs of divorced women with money. Because we did the research together, you have an exclusive on this relationship. You cant get this knowledge from anyone else. This is not giving an exclusive on banner ads.
Bud spends $.75b on promotion. Kraft hasn’t gotten past the model of: we’ll sell a product the buyer doesn’t really like, but he’ll buy it if the price is low enough . We call this promotion, even though neither the buyer nor the seller is happy with the transaction.
Companies have both a promotion and an advertising budget. There’s not as big a pressure to justify ROI on the promotion budget.
The flush toilet and the elevator made cities possible.
The iphone may be as big as the automatic transmission.
If YouTube collapses the public broadcasting system, the culture goes away.
We are teaching people to use itunes as a coping mechanism. That is emerging spontaneously from the community.