Deloitte says Branded Social Networks are a Bomb

Courtesy of ReadWriteWeb this afternoon, “Corporate Social Networks Are A Waste of Money, Study Finds“, original post at the WSJ here.

In summary, Ed Moran at Deloitte did a survey of 100 major brands that have online communities. They all suck. What does “suck” mean in this case?

Thirty-five percent of the online communities studied have less than 100 members; less than 25% have more than 1,000 members – despite the fact that close to 60% of these businesses have spent over $1 million on their community projects. “A disturbingly high number of these sites fail,” Moran tells us.

This tells me a few things. First, these companies have spent WAY too much money on their community software. Part of the magic of building a community network lies in using tool that are familiar and easy to use for the largest number of people. Since the vast majority of successful communities use similar forum and photo sharing tools that are largely open source, rolling your own makes less sense, particularly for a million bucks. That is to say, go where the people are.

Second, they don’t actually have anything worth talking about. That’s not to say that they don’t have great brands, or great products. But they might not have great brands or products that inspire conversation. For example, the Purina hard-to-classify-as-”network” network has only four paltry pages of user comments. It’s just hard to talk about odor control at any length.

In contrast, Mercedes-Benz has an incredibly successful community at BenzWorld.org, offering a place for user support and discussion on the cars — even premium membership for the high-dollar owners.

The Mercedes example gets to one of the key points in the survey: offer a community only when it provides a service to the community — not to you.

Third, the survey ignores companies making great use of existing tools. Back on my first point, if you are really going where the people are, then a network on Facebook or MySpace allows you to tap into known quantities, vast numbers of connected users, on an (arguably) stable platform.

The upshot is this: in spite of the doom and gloom from Deloitte, don’t shake down the social networks just yet. We’re entering an era of connectedness unlike any we’ve yet experienced. If you know your customers — if you truly understand them — a community might be your next best home run.

Apple WWDC Keynote, iPhone3G, and Snow Leopard

Steve Jobs can do what he damn well pleases, thank you very much. If he — and team Apple — demonstrated anything in yesterday’s WWDC Keynote address, it’s that. Because frankly, they took their stage time yesterday to demonstrate a whole lot of old news, and they buried the hidden gems.

WWDC Keynote Snooze

Part of the challenge was all about bad timing. In a special event months ago, Jobs took the stage and told the world that the iPhone SDK was coming, that all developer prayers would be answered, that they would have access to the iPhone core API’s, allowing the masses to write apps just like Apple does. They would just have to wait. Be patient. It’s coming.

Then, they seeded the developers. Certain developers. OK, not very many developers. Still, the applications that were teased out of the process looked good. Really good. The world was getting excited.

June. WWDC. iPhone3G has been leaked. The furor and frenzy about this next gen device is at an all time high. Devs are counting on Apple to deliver. The public is paying more attention to this developer conference than ever before. They’re tracking secret shipping manifests for boxes on the way to Apple stores. They’re lining up at the retail locations for this product that has not been announced. It’s a drumroll of a million crazed fetishists at terminal speeds.

It was an announcement for an announcement. The iPhone3G isn’t coming for another month. iPhone 2.0 firmware, another month. App Store, another month.

This challenge of timing is non-trivial, and most likely not an accident either. From the lay perspective, the market expected a punchline to this long-running joke; a release to the flood of expectation. What was announced yesterday underdelivered on those counts.

First, the next-gen phone is less than the market expected. Yes, we knew it was going to be 3G. Yes, we knew it would have GPS. Yes, we knew it would cost less. But Apple has a history of delivering so much more than expectation, of blowing away the market with things no one has thought of yet. The iPhone 3G satisfies the market. It does not blow it away. Where is the forward facing camera for handset video conferencing, for example? How did that rumor get so out of control? Where is the 32 GB model? 16 GB has been around a while in the iPhone, after all.

Second, the App Store. The keynote languished on and on and on with demos of software we’d seen, tools that developers had been discussing for months. Screenshots had been leaked. Apps are already running on millions of hacked phones. And we had to suffer through nearly an hour of old news from a platform stage architected to deliver WOW. There was no wow. (To be completely fair, the gaming apps are amazing. You should take a look at the keynote just to see what’s coming — cell phone manufacturers have been trying to reach this level of quality for a long, long time).

Third, OS X. The next version of OS X, 10.6, will be called Snow Leopard, and it’s likely the most interesting of the big WWDC 2008 stories so far. The news? No new features.

OS X 10.6 Snow Leopard: Hidden Gem

Which, of course, is not true at all. According to Jobs, it’s an opportunity for Apple to take a step back, to focus on efficiency and security, and to build in some core evolution to the OS, while keeping on a one-release-per-year schedule. It’s a truly interesting strategy, actually, and bucks a pretty well accepted gestalt that for public consumption, there must be eye-candy. Apple is betting they can change the course of things with Snow Leopard.

And actually, they’re in a great position to do it. Look at Vista, for example. Microsoft took five years to build XP’s successor and where the OS has received it’s greatest criticism is in usability. The reason for the so-called XP Downgrade Program is because the company has put so much effort into making XP actually function over the years that it does meet user expectation at this point. If you go back in time 6-7 years, you can see Microsoft faced with the same question of direction in OS development that Apple took a stand on yesterday.

1. Focus work on XP and deliver core refinements that make the OS better, more stable, more expandable, more cooperative with more hardware, and increase performance and security… OR
2. Do everything in option 1, plus take several years to re-jigger the interface and add a bunch of eye-candy to the mix, completely changing the way users interact tactilely and visually with the OS, because then we’ll actually have something to talk about.

Vista, as it turns out, is the result of choosing option 2.

Leopard, on the other hand, is both widely accepted as structurally excellent, and functionally elegant. Users like to use it. They aren’t actually screaming for new features. They’re content with letting Apple define what it is they need to be excited about. Exposé. Dashboard. Bells. Whistles. Whatever. Apple is banking that they can cash in on this wide-eyed enthusiasm for the OS and take a break from delivering the bells and whistles, breathe deep and focus on building something truly next gen for the Mac platform.

While they’re at it, they’ll do something really special: they’ll get the consumer public excited about core OS technology. 64-bit. Multi-threading. Multicore. OpenCL. Javascript. They’ll have people using these terms, driving discussion they don’t really understand, and setting an expectation around OS excellence in a way that others will have to emulate to address. Again.

Apple has a recent history of defining a market dialog. Yesterday, they did it again. The keynote may have been a snoozer, but the hidden gems are special. In the coming months, watch how the company frames their discussion on core technology. Watch how they make it special, interesting, compelling for all-comers.

For the record, I’ll be buying a new iPhone. I don’t care about the 3G. I don’t really care about the GPS — the current system actually works quite well for me. I need the memory. And my wife needs an iPhone of her own. When Jobs made the announcement for the first iPhone, he said they’d targeted 10 Million phones by the end of 2008. Given the announcements yesterday, I don’t think 10 million is even in the cards — they’ll top 10 million before 10/1/08.

Apple.com: Robert Lang profile “The Art and Science of Paper Folding”

My daughter Sophie is currently enrolled in a Chinese language immersion school. She’s in kindergarten now and her teachers have started introducing the kids to simple oragami projects for crafts time. Then, in a sweet bit of synchronicity, her godfather received a book on some creative origami projects that you can make out of dollar bills for Christmas and brought it over for dinner a few weeks back. We were both schooled handily when we tried to make a Klingon Bird of Prey out of a greenback. [Read more]

Rarity: Apple Employee Talks!

Jens Alfke writes a great insider post on his decision to leave Apple and move into life as an independent developer. The whole thing is worth reading, but the part that gets to me is this:

It’s deeply ironic: For a company that famously celebrates individuality and Thinking Different, Apple has in the past decade kept its image remarkably impersonal. Other than the trinity who go onstage at press events — Steve Jobs, Jonathan Ive, Phil Schiller — how many people can you name who work for Apple? How many engineers?

Apple Reduces iTunes+ Prices, Brings Parity to DRM’d Tracks

Today, the WSJ reports that Apple has reduced prices on all their DRM-free tracks to $.99, making the per-track price equal to that of tracks with DRM throughout the store. In addition, they have launched a wide new selection of indie artists and labels under the iTunes+ moniker, making Apple the new champ in volume of DRM-free music, buy maybe one or two tracks. Amazon recently launched their MP3 store, with over 2 million tracks and $.89 per track pricing for most songs to widely positive reviews from industry. 

Amazon Launches Public Beta of Amazon MP3 — Bests Apple’s iTunes Plus by 1.7 Million Tracks

Amazon launched their MP3 store — as widely predicted — but did it in the first commercially viable fashion the market has seen since iTunes debuted years ago.Others have tried, but all have failed to gain much ground on Apple’s store, not because of onerous copy protection schemes, but because all the competitors to date have been so, so very stupid. [Read more]

Radiohead Misses the Point, Allows “Integrity” to Interfere with Distribution

I won’t buy the next Radiohead release. As a matter of fact, I haven’t thought about Radiohead in years. I remember Radiohead listening parties in college, but since the advent of the iTunes Store, they’ve fallen off the radar.Until this morning, when I had a chance to catch up on the Wired blog. Eliot Van Buskirk has a quick post about how Radiohead has shunned iTunes not because of DRM, not because of pricing, but because the online store refuses to sell their releases as album-only.

According to an EMI, Radiohead refuses to distribute via Apple — even through Apple’s DRM-free iTunes Plus store — entirely because of Apple’s policy of selling tracks individually:”iTunes insists that all its albums are sold unbundled, but 7digital doesn’t.Radiohead prefer to have their albums sold complete. The artist has a choice, and if they feel strongly then we respect that.”

This is a tough one. It’s tough not because of some overpowering ethical nerve, but an emotional one. Artists certainly should have the right to determine distribution, but to allow this archaic emotional attachment to a format to get in the way of public access to the material is foolish. This is a statement many bands tried to make when Apple launched the music store — bands that realized quickly that they hadn’t the might to change the course of history through market protest. The beautiful part about this whole argument is that Radiohead, like ColdPlay and Pink Floyd, are lousy to listen to one track at a time. Fans know this, and I have to imagine would by the whole album on iTunes, even if the option existed to purchase one track at a time.And now, Radiohead’s refusal to be in the iTunes store has further cemented them in the category of emo-also-ran, along with the Beatles’ army of attorneys, and all the others who chained themselves to the old ways just before the bull dozer mowed them down. And I’m forced to say of their next release, “who cares?”

Hulu.com Early Contender to Join the Ranks of Obscurity

The squabble between NBC/Universal and iTunes — the latest squabble — is particularly amusing. The network has said they’re pulling their content and — in related news — said they’re launching a new service of their own, Hulu.com. The new portal has not launched yet, but the splash page up right now looks like this:

Note, second from the bottom left: “Drive”. That’s right, NBC is using this opportunity to go out on their own, to enjoy the freedom of their new lives unshackled from the iTunes master, by working with FOX, who’s promoting a show they had so much faith in that they didn’t even air the final three episodes on broadcast television. That’s not really fair. Guilt by association isn’t the problem. No, the problem is that NBC is creating a new network, building a new brand where TV isn’t, in order to be out from under the thumb of a quality service where TV is.

[Read more]

My WIRED Cover

About three months ago, I ripped the shrink wrap off my monthly WIRED magazine and found a note from the publisher. They were doing a special run in partnership with XEROX around a piece on hyper-personalization on the web. If I was one of the first 5,000, the note said, to send in a picture of myself at the appropriate resolution, I’d get my face on the cover of the magazine. Of course, I’ve always wanted to see my face on the cover of WIRED magazine.

So, I shot off the first pic that came up — a scruffy-looking, vacationing Pete shot through a mirror in a get-away hacienda in New Mexico this year. Very vacation-chiq. Still, my face, my WIRED.

I think it’s a befitting example of the kind of personalization we’re capable of now, that even a publication the size of WIRED can reach out and touch us readers so personally, and it’s something all small businesses can take a note on: how many of us have 5,000 individual clients in our rosters? How long would it take to reach out and touch them each so personally?

BlackBerry Messenger: A trip through the Internet Time Machine

I don’t use a Blackberry. In spite of the cult of Blackberry, I’ve always found the device difficult to navigate. Even the new Pearl, with the cute scroll-wheel, is marred by the funky keyboard layout. I just can’t get used to typing on keys that have more than one character each.

Of course, as a new iPhone user, the Blackberry has drifted even further from my sphere of potential use. Today, I got an email from a good friend who happens to work at T-Mobile. It was an invitation to join his Blackberry Messenger contacts list (Messenger is the software application that provides chat between Blackberry users).

First, I can’t use the software because I don’t have the device. To my knowledge, I can’t use the software on my desktop machine either. Of course, I wouldn’t know the answer to that, thanks to my second problem.

[Read more]

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