Social 2.0 = “Group Forming”
It might come as no surprise that this piece stopped us dead in our tracks: Bubble Deflated, Social Media Will Now Change the World. The author’s thesis is that the Facebook/Zynga/Groupon hype-madness is not unlike the the correction that occurred after the first internet bubble circa 2000-1 and that this lull is the time for companies to truly find their groove.
How might things have worked out differently if Borders, Barnes & Noble, Best Buy, Blockbuster and others took the 2001 market correction as the opportunity to catch up, as opposed to writing off the danger of “getting Amazoned”? What if a host of market-leading companies had taken advantage of the lull in the markets’ over-funding of digital competitors and had transformed themselves?
Large companies should learn from the past and take advantage of the coming lull to catch up with social media today.
The author goes on to describe the true nature of the opportunity at hand which is central to our vision for our clients and our own venture, DAZZMOBILE. We have blogged many times about the coming wave of niche-social. To us, niche social is the essence of the following argument:
The social networks that will win are those that provide the best tools for “group forming,” which is the ability for users to define and collaborate with groups of other users of their own choosing. Such networks provide the best utility to the user and the best potential value for the organizer. AOL rode the effects of Reed’s Law in the early days of the Internet. eBay did the same when it created and dominated auction-based commerce. Reed’s Law explains whyFacebook beat MySpace and dominates today’s social networks.
Companies of every stripe should now focus on how to use social media techniques to win the battle for user attention in their particular markets, and to defend against competitors and new entrants.
This doesn’t mean that every company should seek to replicate or topple Facebook. Instead, every company must think hard about how social media models might endanger or, alternatively, provide new opportunities for their business assets and models. As I’ve written before, ripe opportunities lie in education, customer service, entertainment, and community.
As entrepreneurs, it’s gratifying to read thoughtful arguments in support of shared New Market convictions. As mentioned, DAZZMOBILE is focused at the intersection of social and entertainment. Another internal project, Virtualyty is focused at the intersection of customer service and social.