I was just reading today’s Wall Street Journal when I noticed this picture attached to an article about a labor strike in France. I was immediately struck by the fact that most of the protesters in this picture are wearing masks.

Maybe its because recently I have been reading and listening to a lot of stories about the American Civil Rights movement — where protesters put their lives and the lives of their families on the line — but I have a difficult time taking these people seriously. I don’t see a bunch of people passionately fighting for what they believe in; I see a collection of cowards.

About a year ago I ran into the same thing on the streets of Boston. I was on my way across the Charles River to buy boxes for the move to San Francisco when I got stuck right in the middle of a protest aimed at The Church Of Scientology. The protest was sponsored by the Internet group Anonymous. They too were wearing masks (the picture at right is of the actual group I ran into).

Since it was a Saturday I actually hung around the protesters for a little while and I tried my best to understand what they were actually protesting and why they were wearing masks. They didn’t have a good answer for either, frankly I think they were just bored. When I challenged them with the crazy idea that if they truly believed in what they were fighting for they should be proud to show their faces they asked me to move along. I even offered to join them in their protest if they removed their masks. All I got for my offer was more blank stares from 20 or so Vs.

In my view anonymity is one of the more problematic features of the Internet, and is the cause of much of the hate and vitriol we find there. Anonymity gives people the freedom to do and say things they never would have otherwise and while this has benefits, the ranks of ugly episodes are growing. Lets hope we don’t see more of this type of protest spilling into the physical world.

If you believe in something, stand behind it.

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[UPDATE:  Andrew McAfee has critiqued my post on his blog here. Valid points, all. My reply is below, and on his original post.]

My former colleague Pete Kim has been on a roll lately. A week ago he challenged the blogosphere to become more than just an echo chamber — he even challenged me personally to “really turn it on.” This weekend he clarified further to say that social business is business. And today he goes on to explain why he believes Web 2.0 still matters. Like any good colleague, Pete has pushed me to clarify my own thinking on the subject.

As an economist — and a micro-economist specifically — I look at Web 2.0 through the lens of Coase’s The Nature of the Firm and the eventual refinement and expansion of his theory over the last 80 years. So what do I see when I look at Web 2.0, social media, social software, and whatever else you want to call this thing? I see a fundamental rethinking of the definition and function of the firm; the single biggest change since the industrial revolution.

Yes, that is some over the top rhetoric, but consider the facts: Since the industrial revolution the basic creation of economic value has followed a pretty simple path. Firms acquire capital, labor, and resources, combine them into a valuable product or service, and sell the product or service to individuals or other businesses who consume that value. In this system is it incumbent on the firm to create value, and the role of the buyer is to consume value. End of story.

What Web 2.0 software has done is give firms the tools to blow the doors to value creation wide open and invite customers, partners, experts, and prospects into the process. Think of a social network like the ones run by Communispace; here businesses are opening the doors to the product development, marketing, packaging, and distribution process to customers who add value every step of the way with their preferences, ideas, and reactions. The firm is no longer creating value alone, it now has help.

Skeptics will argue that this sort of value has always been provided to the firm through focus groups and other market research. While it is true that these functions have brought in outside opinion and value in the past, they have never before operated at the scale that truly social software allows. Instead of a one-off focus group for 8 hours with 20 people, firms now have the ability to conduct perpetual focus groups with as many people as care to join. This, needless to say, is a big change.

Over the next 10 to 15 years, on the back of social software, we will go from a fundamentally closed value creation system to a fundamentally open one. The firms that get their first and with the greatest depth stand to profit wildly, while those that do not embrace this change will be stuck with a slower pace of innovation and industrial revolution-era economics and resource constraints. Firms that embrace the community will harness vast amounts of community value at almost no explicit cost. Again, this is a huge transformation.

If you have spent any time speaking with me or reading my research in the last two to three years you have likely heard some version of this before. My colleagues as well have been writing about this change — see Peter Burris’ Community Marketing report for a great marketing focused example. Over the next year my goal is to expand and deepen Forrester’s coverage of this shift, eventually providing firms with a road map of how the move towards open business will play out, and where they can take confident steps forward. First up is a report tentatively title “Community Evolution: How Loosely Coupled Communities Of Interest Will Mature Into The Tightly Bound Economic Actors Of Tomorrow.” The report will aim to answer:

• What types of products and services will communities provide in the future?
• What business models will facilitate those communities? Will they be for-profit?
• How will communities evolve over time?
• What should businesses do today to prepare for the change?

If you are interested in contributing to the research please let me know in the comments, or via email. Pete, expect a call for an interview shortly.

This, as you can probably tell, is something I get very excited about, and I am thrilled to share my findings with you, and the rest of the world. It may sound self-serving, but I don’t think there is a better job in the world right now than an economist focused on technology. It’s an exciting time to be in research!

(photo courtesy of hagit, via flickr)

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Since early October my colleague Laura Ramos and I have been publishing a series of reports examining the role of digital media in the business technology buying process. The data we have been drawing upon comes from Forrester’s Business Data Services offering and consists mainly of just one question: “When researching and comparing products, how important is each of the following media as a source of information for informing your purchase decision?”

Its a pretty simple question, but has been powerful in helping us to understand the importance of traditional and social media, online and offline interactions, the role of a sales rep, and many others. The results from this one question have been so encouraging we have invested the time and money in running an entire survey on the subject (some of the early results are here, and I will be sharing more on this blog over time).

The series of reports we have been publishing have been organized by technology category (networking and telecommunications, IT services, hardware, security, etc.) but some common themes are emerging. Here are three:

1. Social media is important to technology buyers. When compared to traditional information sources like peers and colleagues, sales reps, and trade shows, social media is not the be-all, end-all information source — the vast majority of buyers will still rely most heavily on the people and channels they know when making a technology purchase decision. However social media is starting to have an impact: among telecom and network buyers, for example, nearly two-thirds find discussion forums and social networks important. For hardware buyers the number is 64%; for security buyers it is 59%. I’ll even save you the suspense: Software will be a big number too. Its clear that social media is having an impact, and its one that we expect to only grow over time.
2. Buyers in more technical disciplines rely on social media more than the average. We can probably call this the discussion forums effect, but within technology categories it is the most technical disciplines that rely on social media the most. Among hardware buyers for example, discussion forums, blogs, and rich media all have the greatest impact on server and PC virtualization, data center, and storage decision-makers. Their peers focused on desktops, laptops, and hardware services, by contrast, rely more on traditional information sources.
3. Smaller firms place value on fewer information sources. Buyers at the largest companies have developed an omnivore attitude towards information sources; they consume nearly all of them voraciously. At smaller firms buyers are far more likely to rely on just one or two information sources. This sets up an odd dichotomy: At larger firms more buyers are likely to engage social media; at smaller firms those who do engage are more likely to be influenced.

I am very excited to dig into the results from our recent survey and will be writing up more insights — as well as the heavy-weight segmentation and approach research — over the coming year.

If you are interested in digging into the results along with us shoot me an email.

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I probably shouldn’t admit it in public — considering I’m a social media analyst — but I subscribe to the daily print edition of the Wall Street Journal. This morning I had just finished running through the paper when it realized that I hadn’t seen such a brutal collection of news about tech companies in quite some time.

To wit: Here are the headlines on the front page of the Marketplace section.

1. “In rare move, Microsoft is exploring job cuts“
2. “Nortel Networks files for chapter 11″
3. “Smurfit says bankruptcy is possible amid crunch” (Smurfit-Stone is a cardboard manufacturer)
4. “Motorola to cut 4,000 more jobs as cellphone sales collapse by half”

Of 23 total articles in the section, 9 (39%) were about tech companies and they were almost universally negative — and that doesn’t even include the front page article about Steve Job’s health. The only positive news was “IBM plans new center in Iowa.” Needless to say, the market is down, and the tech market is down right along with it. Granted Motorola and Nortel have been in trouble for a while, but Microsoft, Google, and Seagate are all well run companies. If there was any illusion that the tech industry might not get hit in the recession the Journal blew it away.

Rest of the tech headlines:

1. “IBM plans new data center in Iowa”
2. “Goolge plans 100 layoffs of recruiters”
3. “Bartz eases some hurdles to Yahoo-Microsoft deal”
4. “Satyam seeks leaders, names auditors”
5. “Growth in world-wide PC shipments levels off”
6. “Seagate slashes salaries”

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I recently sat down for an interesting interview with Cath Everett at Computer Weekly on the topic of Enterprise 2.0 software. As the conversation wound its way around all the high-points of Enterprise 2.0 we eventually came to the inevitable question of adoption. Cath played a fantastic straightwoman and asked/stated something along the lines of: “Well, its all about user age, right? Adoption won’t really pick up until the employees turn over, and its all Gen Yers.” I hear this question a lot. The belief that older workers can’t be bothered to learn new tricks, and that new employees are chomping at the bit to get social is deeply and broadly held. I’ve heard this question consistently over the past two to three years and have developed a compact pithy answer. To my amazement that is not what came out of my mouth. Instead I calmly replied “Cath, if we replaced every employee tomorrow with a Gen Yer the average enterprise still would not be able to use Enterprise 2.0 to its full effect.”

Well crap. Now my mind was racing; what did I just say? Do I believe that? How could that be true?

Thankfully the more I think about it the more convinced I am that this is the case. First, let’s think about enterprise management. How many managers are truly equipped to manage to social, collaborative workers? We’re not particularly good at managing to team goals today. How would the average enterprise incent and compensate workers in a truly social enterprise? You clearly can’t pay by the Tweet. While I’m sure Andrew McAfee’s MBA students will be well equipped to manage to a new social enterprise, the infrastructure to do so is clearly not yet there.

Second, let’s think about the thousands of business processes already in place within the average enterprise. How many have any room whatsoever to incorporate social content, context, or feedback? Nearly all enterprise business processes will get a long look over the next three to five years as they are retrofitted to take advantage of a truly social workforce, but that work is forthcoming. Without social processes even the most game employees will struggle taking full advantage of Enterprise 2.0, and retrofitting will take some time.

Third, let’s think about the customers of the enterprise. When taken to its logical conclusion a truly social enterprise will incorporate the value and input of not only employees but also of partners, suppliers, and customers. While there are very encouraging signs that customers and experts are interested in taking an active role in enterprise value creation — the Netflix Prize comes to top of mind here — many firms are either not prepared to make use of those insights or do not have a ready supply of external folks ready or willing to help. This will change over time as firms become more adept at soliciting and using external value, but as of today its rarely possible.

So what do you think? Did I shoot myself in the foot? Would a complete transfusion of new blood into the enterprise – assuming you can magically transfer experience and skill – result in a truly “2.0” enterprise?

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If you have followed the social computing space at all in the last 2 years you have undoubtedly come across the Social Technographics work of my colleague Josh Bernoff, and former colleague Charlene Li. The Social Technographics Ladder is tremendously useful to anyone thinking about community dynamics and accordingly has been wildly successful. Needless to say my colleagues Peter Burris, Laura Ramos, and I got a little jealous.

So, late last year we launched a survey of our own that dives into the very deep end of business communities. We’re very excited to write up the findings and apply them to real communities over the coming year, and I will be sharing some of the early analysis with you here.

One of the first questions we wanted to tackle in the course of the research is what drives community participation (see graphic).

Quick reactions:

1. The quality of the people in the community is critically important. Its not enough to equip marketers or community managers with the right content and let them loose. Instead you must get the actual experts to participate and provide value. Their presence alone will have impact.

2. Volume of activity is not critical. Many marketers hold off with communities for fear of signing themselves up for a major commitment to content creation. Instead this survey suggests that volume is not nearly as important as quality. Excellent content infrequently may be enough.

3. Diversity is not a value in and of itself. Community members (from the sponsor side or the customer side) are not valued because they provide variety alone; the contribution itself must be up to snuff.

4. It is difficult, but not impossible, to get new communities off the ground. There is a self-reinforcing nature to communities: People join because there are quality community members. Getting off the ground with a set of community members that will attract others can be tough. However it is not the case where once a community reaches scale it can’t be displaced. Size of the community is not a virtue itself.

So, you play the analyst: what else do you see here that I’m missing? Does this data reflect your experiences either as a marketer or a community member?

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My guess is you have heard the news by now, but if not it is worth pausing to note that SuiteTwo — the Intel backed Enterprise 2.0 offering that launched in 2006 — has officially closed up shop. All things considered this is not much of a surprise. While the joint venture between NewsGator, SimpleFeed, SixApart, Socialtext, and managed by SpikeSource was a big showstopper when it launched, the offering never realized its potential and died a mostly silent death. To be honest I can’t remember the last time I spoke with a company that was even considering the product.

The main problem was not the concept – the market has aggressively moved towards suites of blogs, wikis, RSS, and social networking – but instead the execution. Though Socialtext founder Ross Mayfield always disputed the label, SuiteTwo never became more than a ‘Frankensuite,’ a group of individual applications duct-tapped together. While I’m looking out for recession casualties, SuiteTwo clearly had bigger issues.

For the few SuiteTwo customers out there now looking for another solution my advice is to examine your firm’s use of the technology and reach out to the appropriate component vendors. Unless your firm has been inordinately successful at integrating the entire suite into your processes, you are likely making most use of just one or two features, while the others are mere accessories. Reach out to the vendor of that one killer feature first; all the vendors involved are still around and most have matured their product sets to a level comparable with SuiteTwo anyway. In all likelihood you should be able to replace your existing implementation pretty seamlessly with what is now better software.

As for NewsGator, SimpleFeed, SixApart, and Socialtext: I would be shocked if they weren’t already picking over the carcass. There may not be many customers to grab, but those that are out there should be highly profitable – they know the tools are valuable, don’t need training, and will have a very short sales cycle. Happy hunting!

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Every couple of months we see a breathless report about how ‘bad guys’ make use of the same tools as the rest of us — cell phones, email, facebook, twitter, and so on and so on. Its a pretty basic, if not eternal story. Technology designed for good, gains a following, used for evil.

Well we can officially add mashups to the list. Yesterday I ran across a new mashup (hat tip: http://sf.curbed.com) that efficiently informs would be vandals and muggers where donors to the Proposition 8 campaign — outlawing same-sex marriage in California — live and work. Like all mashups it does its intended job very nicely. With just a couple of quick mouse clicks I could find out who in my neighborhood donated  and where exactly I could jump them (see below).

Now, don’t get me wrong, the creator of this mashup is clearly not doing anything illegal. All the information used is publicly available. But we have to ask: What is the purpose of this mashup? It can’t be for good, that’s for sure.

The bigger issue however is what we as a society do about it. All the rules set down deciding what the public should and should not have access to were established long before mashups, and even the Web as we know it today were around. Would the sponsors of the donation disclosure legislation — designed to clean up government with transparency — have been quite so forthcoming if they knew this would be the result? My gut says no. But to what end? Should any potentially incendiary information be kept from the public because the simple but effective  barrier of having  to get off your couch, go down to city hall during business hours, and request it is now obliterated?

Could it be that mashups are going to quickly become one of the major challenges to a free and open democracy? If you had asked me yesterday I would have said you were crazy. But once the properties listed here — or in the similar mashups sure to come for future debates — are vandalized there will be two effects: An outcry to restrict access to this information and a chilling of political donations and activity (or at the very least a strong incentive to take it all back behind the curtain). In either case our society will be poorer as a consequence.

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This past week’s Consumer Electronics Show in Vegas produced two big stories with one major theme: recession. The first, not surprisingly, is that consumer technology manufacturers have responded to falling discretionary income. After years of excess the pitch from manufacturers is now  “value,” not glitz or pizazz. My colleague James McQuivey reported from the show that several exhibitors spent more time emphasizing the value in their old products than launching new ones.

The second story was the falling attendance. Early estimates put attendance down by 8% year over year, and if the taxi lines were any indication the actual attendance was much lighter than that. (UPDATE: VentureBeat reports the drop at 22% — yikes!) Frankly this is not a big shock. When budgets are tight — both for individuals and businesses — expenses like travel and trade shows hit the cutting room floor.

For marketers this is a big problem. The last few months I’ve been doing a lot of research with my colleague Laura Ramos on the types of media information sources that have the biggest impact on business buyers. What we have found again and again is that trade shows have a big impact, especially amongst the biggest buyers. Among IT hardware buyers, for example, 65% of buyers report trade shows are important or very important to their purchases, the 6th most influential information source overall. (see the very complex graphic below)

For the balance of the recession — and economists are split on how long that may be — attendance, and consequentially client impact, for trade shows is going to be down. Marketers, this is going to hurt. One of your better tools for informing buyers will be neutered. As your marketing budgets get slashed the pressure to go cold turkey on trade shows and events is going to be high, and many marketers will cut. This would be a mistake. Fewer of your competitors will pay to shake hands and demo products to customers so while your attendance may be down, the competitive impact will be up. If your budget is really tight, think about opening up your local offices for an open house; the customers may not be able to pay to travel to you, but you should be able to get to them at a low cost.

Many marketers will look to cut budgets in the next few weeks and while the pressure to cut trade shows and events will be high, keeping the intimacy with customers will pay dividends, even during a recession.

UPDATE: Just this morning I got an email from Oracle advertising “HP Oracle Exadata Roadshow Boston‏.” Their database is wrong for my location, but the strategy is dead on. If customers can’t pay to get to you for trade shows you must go to them.

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Well here is a novel solution to the problem of too many “friends” on Facebook that you don’t really like or want to stay in contact with: sacrifice. This week Burger King launched a new ad campaign called Whopper Sacrifice where you sacrifice 10 Facebook friends and get a free Whopper. And they aren’t kidding, you really have to sacrifice them — the application brings up the actual “defriend” function in Facebook.

Naturally I had to sacrifice at least someone. Here are the screenshots:

I’ll sacrifice a few more and let you know it goes when I get my Whopper. Also, no hard feelings if you get defriended, it’s all in the name of research!

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