Create more value than you capture – a session by Tim O’Reilly, Founder, CEO O’Reilly Media
Many companies start off and succeed because they are providing value to society. Microsoft and Apple, for example, connect people with easy access to desktop computers and smartphones, and made lives a whole lot easier. Like these companies, however, a trend is emerging as companies grow and succeed, the need to look after themselves seems to far outweigh the desire to keep providing value, and suddenly the only responsibility they have is “to the shareholders”.
The problem with this? Shareholders aren’t making your company money, customers are.
O’Reilly is concerned about this. “Wall Street firms, which got their start trading on behalf of clients, then began trading against them, then created vast Ponzi economies to drain the value from entire segments of the economy.”
When companies have absentee owners, no one is really responsible for their actions; they are just doing their jobs. When jobs are cut for a short term profit, the long term consequences are ignored because that will be someone else’s problem.
In times of history, people like Lincoln and Roosevelt have stood up and said “We need to change the system because we have gone off the rails.” We have gone off the rails.
“If you look at the great companies,” O’Reilly said, “they almost always have a higher sense of purpose. Investors do not create jobs, customers create jobs.”
Vested interests always have the loudest voices as they are the most established, take for example the SOPA incident. “People say we have to worry about protecting Hollywood. No we don’t. We need to find a solution that’s best for society.” Yes some people won’t pay for content, but would they ever have? Reach and awareness can generate business, and if you’re providing something of value, most people will pay for it.
O’Reilly believes that “policymakers need to focus on protecting the future from the past instead of protecting the past from the future”.
So what is the way forward?
-Create products that work for your community -Companies need to take ownership of their actions, look after employees as well as shareholders, provide value and think long term -Human creative touch is going to be more and more valuable. The success of places like Etsy and user generated videos on YouTube demonstrate this This e-mail and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed.
After hours of planning, my schedule took a six block detour when I found out my social media crush Gary Vaynerchuk scheduled a last minute #eatup (eat and tweet). And I was not the only one, after tweeting the location, a crowd gathered instantaneously, lining up in an orderly fashion to speak to and take photos with the man himself.
Granted, this is his space, this is a crowd that knows his work and his charm. He has never had a TV Show (he turned it down as he feels cable is dying), never been in movies, but he has written books, made countless online videos, and if there is a world record for the amount of people an individual has replied to on Twitter, he would have it.
At the #eatup Gary had time for each and every person, and will not leave that space until everyone has had their turn. He knows the value of connecting with your audience directly, and his reputation shows that. It is interesting to compare this to the traditional “celebrity”.
For most celebrities, when they allow themselves to be available to the public, it is because they are promoting their movie/TV Show/album/tell-all book/perfume range. At that point, the time of showcasing your completed work, is it too late to expect them to care? What story have they told? How do they know how much work has gone into what they’ve produced? Did any work go into it or did they phone it in for a paycheck?
Looking back at the People’s Choice Awards, pretty much everyone who walked away with an award not only has a large presence on twitter, but tweets regularly. Vampire Diaries star Nina Dobrev was the first person to win an award when she wasn’t even listed on the original nomination ballot. How has this never happened before? Perhaps because previously stars didn’t have the almost 2,000,000 followers that they can mobilise in an instant like Nina can. Many stars still don’t, but the saying goes – “Build your network before you need it”, and she has dedicated hours and hours of time engaging and speaking to her followers. If public figures are not building their network now, and dedicating real time to it, they could find themselves being eclipsed by stars who previously weren’t even on the radar.
Or as Gary Vaynerchuk says – “whoever cares the most, wins.”
From our times roaming the halls of high school we’ve been taught that popularity equals success. Don’t offend anyone, smile, and you could be the next prom queen.
But how do you inspire loyalty and evangelism when you are, you know, pretty boring?
The Power of Unpopular by Erika Napoletano, is a new book about to come out this month which encourages brands to go where no brand ever wants to go: out of the middle of the road. Because as Erika described it while launching her book at SXSW this morning , the middle of the road is “where people get run over.”
Capturing people’s attention is harder than ever. Social networks have been around for a while now, and the tolerance for self-congratulatory and boring content is about to plummet. Brands and companies have had years to experiment and get this right, and now is the time to push the boundaries, not link to your press releases.
The first step is to have personality. Who are you, what is your story, what do you have to offer? Don’t be afraid to show the people behind the organisation, or have a little fun. But there is a line between having personality, and being a jerk. Shock jocks might get the ratings, but being unpopular is not the same as being unlikeable, and this will do no favours for your company.
Next is accessibility. Are you really there? Do you care what people want to say to you? As mentioned above, capturing people’s attention is difficult, so if they take the time to contact you, they will not appreciate being ignored. Research has found that people are turned off by brands when they can see that people’s comments, questions and complaints are being blatantly ignored on social networks.
Sharability. Why not let people spread your content to your own networks? This is the very foundation of good PR – unbiased endorsement. Don’t make it hard for people to do this.
And finally, profitability, because really, if no one is getting paid, having all the above is not going to put food on your table. Focus on the channels that are working for you, cut out the things that aren’t. Social networks can also be a great place for market research, find out what your customers think and what they want, and have fun while doing it.
Not everyone will like you and what you are doing. That’s just the way it goes, even for prom queens. Don’t waste time on people who will never come around, and focus on entertaining and providing value for everyone else.
Porter Novelli is proud to be the official agency partner of SXSW Interactive, one of the most important global interactive gatherings, where many come to get their finger on the cultural pulse.
The SXSW Interactive festival, held in Austin, Texas this March 9-13 brings together five days of presentations from the brightest minds in emerging technology and exciting networking events hosted by industry leaders. SXSW Interactive has become the place to experience a preview of what is unfolding in the world of technology. For more information on the festival click here.
Porter Novelli has an extensive team on the ground including Porter Novelli Melbourne’s Social Media Strategist and Account Manager, Mandy Griffiths, who will be blogging daily. And for the first time, we will produce a daily WrapRap, see below for the first one.
As the use of social media matures, we are starting to see new social methodologies emerge into mainstream business practice. The social media discussions are moving away from how to attract an audience or build a community and on to what to do with them once they are there. Crowdsourcing is an excellent example of this trend and is one of the first to attract attention from business leaders, Governments and leading authors like James Surowiecki (The Wisdom of Crowds). It was also recently discussed at the SXSW Event in Austin Texas*.
Crowdsourcing is where random strangers self-organize via the internet to develop solutions to a problem. Many creative thinking authors agree that its strength comes from breaking the logical and linear thinking process of a single organisation or individual. It has the capacity to solve a problem faster and cheaper but before you get too carried away, it also comes with risks.
As we have seen recently in the Middle East, when you set the crowd free, dangerous things can happen. From a corporate or brand perspective, we just have to think back to the iSnack 2.0 project from Kraft. This is clear evidence that crowdsourcing is vulnerable to being hijacked by Groupthink (a phenomenon where the group accepts an idea without critically evaluating alternatives because they want to minimize conflict). Or a bunch of nerds with lots of free time.
Like all social media techniques, crowdsourcing needs an armchair guide on how to get the best results while avoiding brand disaster. Below are some of the lessons learnt that were shared at the SXSW 2011 Forum.
Lesson 1: It’s great for start-ups
If you’re in business start-up mode and you don’t have money to spare but you want to kick start your marketing, crowdsourcing is a great way to get a new brand out there and solve some of the common problems of businesses that are just starting out. Whether it’s designing a new logo, promoting an event or building a brand community on Twitter or Facebook, the power of the internet means that if you have a great idea, but not a lot of money, the crowd can help you raise awareness (if they buy into your vision).
Lesson 2: Established businesses can also build their brand
Crowdsourcing is a great way to build brand recognition on the cheap for established brands for all the reasons listed in lesson 1. The best recommendation is to use social media to extend current marketing activities and get the crowd involved once your audience is in place. But beware, established brands carry baggage and this can make the crowdsourcing experiment painful (but still useful).
Lesson 3: Sharing the workload
If you have a daunting task and not enough people to complete it, turning it over to the crowd in bits and pieces is a great way to get things done. Wikipedia is a good example of how a crowd can share its knowledge to create a massive central knowledge repository.
Lesson 4: It’s great for Foundations or Charitable Trusts
Rather than increase admin costs to hire staff to assess applications, crowdsourcing can uncover great causes or provide a link to why they will resonate with your brand. If given the right guidelines, they can produce a phenomenal shortlist.
Lesson 5: It is the ultimate brainstorm
Arguably, the most effective way to use crowdsourcing is to solve complex problems. Crowds can solve amazingly difficult problems when they are given a challenge – and a suitable prize. The best prizes are those that are valuable to the crowd – they don’t necessarily need to be expensive.
Lesson 6: Don’t use crowds for compliance
When it comes to compliance, your accountants and legal counsel have the experience to advise you properly. Anonymous members of crowds don’t tend to stick around to be prosecuted if things go awry.
Lesson 7: Crowds are like committees when it comes to prioritising work
Tasks that require a high level of attention to detail and a medium-to-long term focus are best left to the people who work for you full time. They know your brand best and turn up to meetings every week. While the crowd has a high level of passion for the brand, they are just outside observers.
Lesson 8: Don’t take advantage of its free-ness
Crowdsourcing can be tremendously useful for getting work done cost effectively but don’t make the mistake of exploiting the crowd for work you should be paying for. Too much reliance on the crowd could be construed as unethical and once the crowd turns on you, it could be terminal for your business (there is nowhere to hide online from an angry e-mob).
Lesson 9: Don’t use it to build a community
Crowdsourcing is a product of galvanizing an existing community rather than building a new one. You need to build trust with the community before you expect to get work done for you, like idea generation or problem solving. Without that goodwill, crowdsourcing won’t work.
Lesson 10: Experimentation is vital
Digesting the thousands of armchair guides about social media techniques will keep you in reading material for the next decade. You will only really learn what works for your brand by experimenting. Small steps are the key – be mindful of the risks – and document your lessons learnt so that the entire organisation can ultimately benefit from your experience.
*This article was written using a variety of sources who attended the 2011 SXSW Event.
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