Business · Data · Social

A Proposal to Save Social Media and Twitter

Back in May of 2014, 30 months ago, I penned the piece What Happens if Twitter Goes Away? It was a provocative look at the decline of one of Social Media’s darlings and suggesting potential value between free and paid services. Has the Social Media industry reached an inflection point where “free” services need to switch to paid? What are the pros and cons to doing so?

LOOKING BACK TOWARD THE IPO

At the time I wrote that piece, Twitter’s (NYSE: TWTR) stock price had settled to $31.85/share. Twitter’s IPO was at $26./share. Shortly afterwards, the stock climbed to their all-time high of just over $60./share. Fast forward 30 months and today price of $17.49/ share…well below their $26./ share IPO. For almost a year now, the stock has trended below their IPO price and stayed there.

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DIVING INTO THE NUMBERS

In their 2016 Q3 earnings call, Twitter reported $616 million in quarterly revenue with 317 million Monthly Average Users (MAU).

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Annualized, that equates to $2.5 billion per year. But is there a way to increase revenue and provide greater value to users at the same time? I think the answer is yes.

FINANCIAL SCENARIOS: PROS AND CONS

There are a number of paths that Twitter can take. By taking the current path, they continue to face an uphill battle of grinding out revenue numbers with lagging MAU figures. In contrast, there are a number of other scenarios that may present a potential opportunity to both Twitter and users.

twitter-financial-projections

The fundamental changes offer the suggestion of Twitter charging a nominal amount per account. There are pros and cons to this approach. Note that none of the scenarios include Twitter’s existing revenue streams. Here’s a breakdown of the scenarios:

  • CURRENT: This is the current situation at Twitter. $2.5 billion annualized revenue with 317 million MAUs.
  • ALT 1: This scenario suggests that the MAUs remain constant at 317 million , however, each account is charged a nominal $4/yr for individual accounts and $20/yr for corporate accounts. The increase adds $2.3 billion in annual revenue.
  • ALT 2: This scenario takes into account a conservative figure that 50% of MAUs would disappear if Twitter charged for accounts using the ALT 1 figures. This still adds $1.1 billion in additional annual revenue.
  • ALT 3: This scenario suggests a 50% decrease in MAUs, but charges individual accounts $12/yr ($1 per month) and corporate accounts $20/yr. The assumption is that 20% of accounts are corporate accounts. Annual revenue increases by $2.2 billion.
  • ALT 4: This scenario is similar to ALT 3, but increase corporate charges to $50/yr/account. Even with 50% MAU reduction, annual revenue by more than $3.1 billion…more than double current revenue.

The big con would be that users would not pay for the service and MAUs would drop precipitously. Today, users are accustomed to using social media services for free. However, what if services charged a nominal amount per user. Would users pay?

The pros are that Twitter revenue would increase significantly. If Twitter used that revenue to reduce/ remove ads and/ or change the value model, the value would greatly outweigh the nominal costs. One of the big cons to Twitter today is the noise from bogus accounts, bots and the like. By charging, there is an upside that many of these bogus accounts would go away and therefore reduce the overall noise to the data stream. That would be a huge plus for those looking to monetize the Twitter data stream.

NEXT STEPS…

The next steps are in Twitter’s hands. However, as a user of Social Media that understands its value to enterprises and their customers, a change is needed. From an economic standpoint, if something is valuable, we should pay for it. Even at $4/yr/account for individuals and $20/yr/corporate account, the costs are really nominal. Unfortunately, free services skew the market and user base in artificial directions. It is time we consider a change.

What are your thoughts? Would you pay? Why or why not? How about for corporate accounts that you may manage? Add your thoughts to the comments section below.

Business · Social

Three keys to building a successful community

As someone whom is part of several communities, and now being asked by companies to help build their communities, this is a topic I see firsthand. Having been invited to join so many communities, I have had to ask what the value is. This leads to being more selective on which communities I ultimately participate in.

It is important to note that there is a difference between the value to a community member and the community organizer. The value equation must factor both and be bi-directional. In sum, all parties to the community must see value in their participation.

THE IMPORTANCE OF COMMUNITY

In personal terms, a sense of community plays a key role in our societal interests and overall well-being. A community of individuals with similar interests is quite powerful in many ways. There is a saying that “It takes a village…(to raise a child)”. If said ‘child’ were a product, interest or company, the value comes from not just the product itself, but from the community built around the child. It is this very community that brings the true value to any product, interest or company today.

In a business context, the community may include buyers, consumers and influencers. Today, there is quite a bit of discussion about “Influencer Marketing”. Understanding the authentic influencer and therefore their true value is much more complicated than just looking at some social media stats. Unfortunately, social media has provided a megaphone for anyone to use. Providing value to a community, like raising a child, takes more than just reading a book, showing up on a list or having an opinion.

In my experience, there are three core components that drive the criteria: Relevance, Relationships and Respect. Communities are complex to understand. Communities are hard to build. Communities require constant care and feeding.

Community Three Rs

THE FOUNDATION OF RELEVANCE

The very definition of community ties back to sharing a common interest. The interest ultimately becomes the relevance to each individual’s specific situation along with that of the organizer. Relevance provides the common bond and interest between the parties. It provides a central rally cry that addresses a common, shared need or desire.

Individual interest is not enough. An individual may be interested in a specific topic, but if is not something they are passionate about, it may be hard to keep their interest over time. Even if someone is passionate about a specific interest, do they have the capability to provide a significant impact. Interest does not equal expertise. Just because you have an opinion, does not make you an expert. Not-so-subtle message here: Reach does not equal Relevance. And like value, relevance goes both ways. What is in it for me and for them?

RELATIONSHIPS PROVIDE THE GLUE

Identifying individuals with a common interest provides a certain level of value. However, the true value is in knowing (and maintaining) the level of interest and influence of the individuals over time. What are the nuances that an individual brings to the community? These nuances often do not show up in a profile, post or list. How have those changed over time? Remember that we are talking about humans here..which are complex.

The relationships span both community members and organizers. In addition, these very relationships will evolve over time. The relationship itself is not a binary thing. It will exist on many levels and take many forms.

NOTHING WITHOUT RESPECT

One would be remiss to talk about relationships and leave out mutual respect. Rather than talk about what respect brings, let us talk about the inverse. Simply put, without respect, a community does not work. During the course of conversation, opinions will differ. There needs to be a level of respect among the participants. Otherwise, there is a high likelihood the community will either disintegrate or worse, implode.

Respect is not something that is freely given. It is something that is earned over time. It, like relationships, must be cared for. Respect is something that takes time to build and can be torn down in an instant.

COMMUNITY, COLLECTIVE OR ORGANIZATION?

Each of these three core components directly tie back to the participants whether discussing relevance, relationships or respect. All three are essential to success. A community is not a one-time activity. The value of a community is the sum of the parts…over time. It has a lifecycle that goes through different stages of maturity.

If you have reached this point asking how this differs from the complexities of building an organization…you’re spot on! But how does one go about building a community? And how does one ensure that the community will help the child…er…business flourish? Ahh… that is for another post.

Cloud · Data · Social

IBM InterConnect Day 1 Impressions

InterConnect 2015 Las Vegas is the combination of a few IBM conferences. Past conferences carried quite a bit of overlap in content. As the conversations blurred, it made sense to combine the conferences. The challenge is the conference is spread across two hotels in Las Vegas that are not connected. A whopping 21,000 people are in attendance with another 15,000 joining via their online portal InterConnectGO.

Logistics aside, the first day kicked off with a bang. The opening sessions includes all the glitz and glamor one might expect from a Vegas show. The content covered a wide spectrum of IBM’s portfolio from cloud to data analytics.

In my opinion, IBM’s SoftLayer and Watson stories are gems among a varied portfolio. In addition, the social engine is in full swing here at InterConnect. Analytics play a great role in defining different social metrics and IBM is not missing the opportunity. But more about that in a minute.

All about cloud

The cloud story is starting to gel for IBM, but still needs a bit of sharpening. They covered all the buzzwords in cloud, but it left me wanting to hear more than buzzword bingo. Much of the story hinges on the success of SoftLayer. Taking a deeper look at SoftLayer, it addresses a number of the core enterprise requirements for the broader market. It is not everything for everyone, but doesn’t need to be. This is where the ecosystem comes in. Ecosystems are everything today.

During the opening session, IBM announced ‘OpenStack as a Service’. It is not clear how this fits into the overall strategy as it was glossed over. This is an area to watch closely from two perspectives: 1) What exactly is the offering and what market is it intended to address? 2) How will this affect and/or divert SoftLayer’s existing VMware offerings. Will it cause SoftLayer to abandon VMware in favor of OpenStack as others have done? Each of these questions could govern the future success of SoftLayer both short and long-term.

Coursing through the data analytics

Many references are made to the growing accumulation of data. Terms like ‘data lake’ and ‘data ocean’ are used to describe the growing mass of untapped data. During the opening session, IBM outlined several use cases where companies have leveraged their technology to gain insights to the data problem.

Many of the examples continue with the financial services and healthcare use cases. Healthcare is one, if not the largest industry ripe for disruption from data analytics. Citi joined on stage to talk about their approach to innovation. Their mantra: Unleash, develop, disrupt. In the case of Citi, “Nobody needs banks, but everybody needs banking.” Great analogy. For healthcare, May Clinic mentioned that only 5% of cancer patients are engaged in a trial. Meaning there is a huge disconnect (read: opportunity) in connecting patients to potential treatment courses.

Getting social

Cloud and data analytics aren’t the only topics here at InterConnect. IBM is heavily leveraging their analytics platform to demonstrate the value of social here. And the social media elite are in full force. There are a couple of mis-steps by use of the longer hashtags (#IBMInterConnect and #NewWayToWork), but otherwise, the twitter stream is flowing pretty heavily. The longer hashtags are definitely leading to a myriad of typos, which defeat the purpose of the hashtag. One change would be greater engagement in the conversations happening on Twitter. Like some conferences, the twitter feed is mostly one-way with little two-way engagement.

Aside from the downsides, it is impressive the flow of tweets coming from an IBM conference. Considering the perception of IBM, it appears they’re moving in the right direction socially.

On tap for Day 2 and beyond…

It’s all about the cloud. Looking forward to the cloud discussions today along with the Executive Session and Shark Tank presentations.

Overall, it’s apparent that IBM is turning the corner on the conversations. IBM does have it’s flaws as any company that is 400,000 employees strong. That aside, IBM needs to continue on their quest to drive toward cloud and data analytics dominance. SoftLayer and Watson are two shining gems in the IBM portfolio that will need to blossom as they mature.

 

CIO

IBM connects the dots between data, cloud and engagement

At this week’s IBM Insight conference in Las Vegas, IBM brought out the big guns to demonstrate their chops in the data analytics space. Insight is IBM’s conference dedicated to their solutions around data management and analytics. While there are some highlights, other areas are still evolving.

Setting the stage and connecting the dots

Things kicked off with IBM SVP of the Information and Analytics group, Bob Picciano, talking about the important interconnection between data, cloud and engagement.

  • Data is the ‘What’
  • Cloud is the ‘How’
  • Engagement is the ‘Why’

Bob’s messaging paints a good picture of how the technology and data play a central role to the ever-changing IT organization. Engagement is the key to business relationships with customers. The CIO and IT organization need to fully understand how they engage with customers today and how that will evolve over time. Where are the opportunities? How can IT help create deeper relationships with customers? Data and cloud will play a leading role.

Relationships comes in all sizes

The way companies connect with their customers will vary greatly. To that point, there are some core themes here at Insight that mirrors the varied ways. Two of the key areas are social engagement and mobile. Ironically, traffic at the mobile booth seems anemic compared with the social engagement area, which saw constant traffic. In order for IBM to truly capitalize on the changing marketplace mobile will need to take a stronger position.

Getting social, but still a ways to go

Social media plays a central role in customer engagement for many organizations. The impressive thing is that the #IBMInsight hashtag was trending high on Twitter’s list for much of the day. As a data geek, one is always thinking about the value of those metrics. Trending at the top of Twitter is pretty impressive until you start to look at the finer details.

Running data through Tweet Binder provides a bit of clarity (report). Almost 50% of tweeters used Twitter clients for iPhone, iPad or Android speaking to the importance of mobile in social media. Looking a bit further, 61% of tweeters only tweeted a single tweet while 77.51% of tweeters tweeted only one or two times. That is not a good showing for attendees that should be well versed on the impact of social media and demonstrates there is still a ways to go.

Building an ecosystem

Walking the expansive show floor, it is apparent that IBM has worked to build their ecosystem. There are plenty of vendors that provide complementary products based on IBM technology along with plenty of consulting shops too. The interesting point here is that there are not many larger technology companies other than IBM exhibiting. This could be a side effect to IBM’s wide portfolio of services and solutions and a feeling of competitiveness among vendors. Unfortunately, it does not represent the varied needs of the average enterprise customer.

Summary in a nutshell

Putting it all together, IBM is making good waves to support the enterprise around data and analytics. They have made a good start, but still have a ways to go. The solutions still have a traditional IBM ‘feel’ and with rare exceptions span into the newer territories. There was a showing of IBM’s BlueMix platform, but not too much beyond the large enterprise perspective. Even the cloud area competed with the size of the infrastructure areas.

The reality is that turning a company the size of IBM is hard. In addition to size, there are cultures that need adjustment too. But it seems IBM has started to make good strides in some specific areas with ostensibly more to come. It will be interesting to see how IBM addresses solutions going forward and starts to truly pull the different components (data, cloud, engagement) together.

 

Uncategorized

What Happens if Twitter Went Away?

Ok, that sounds like doom and gloom…but is Twitter too big to fail? Today marks six months since Twitter (NYSE: TWTR) went public. Twitter priced their IPO at $26 per share. On the first day of trading, their stock reached a high of $50.09 and ultimately closed the day at $44.90.

In addition, the lockup ends today for Twitter’s early shareholders or roughly 81% of Twitter’s stock. As such, the stock cratered almost 18% to $31.85.

Twitter Stock Price

At the same time, user growth and EPS are both decelerating. For the naysayer, this paints a picture of impending doom. Whether you believe that is the case or not, the question still exists.

Twitter User Numbers

What would happen if Twitter went away? What would happen to the users and demand? Would it shift to other Social Media sites like Google Plus or Facebook? And would it put a chilling effect on social media as a whole?

Many believe that there is value in social media. Could it be as simple as finding a balance between free and paid services? What are you thoughts?

 

Note: Originally published to Medium: https://medium.com/p/21aa6f8f7323

Uncategorized

Are Enterprises Prepared for the Data Tsunami?

Companies are in for a major change to how they operate, manage and leverage data in the coming years. Data is quickly becoming the new currency and leading businesses are looking for ways to capitalize on this change.

The Data Deluge Problem

A recent IDC report on data suggests the sheer amount of data generated doubles every two years. By the year 2020, the total amount of data will equate to 40,000 exabytes or 40 trillion gigabytes. To put in perspective, that’s more than 5,200 gigabytes for every man, woman and child in 2020.

However, the problem is not the data itself. The problem rests with how and what to do with the data. To complicate matters, much of the data generated comes from new sources such as wearable devices, mobile devices, social media and machine data.

Social Data Streams

The impact from social media is significant on its own:

Twitter: 400 millions tweets per day

Facebook: 4.75 billion content items shared per day

According to one whitepaper, Facebook currently houses more than 250 petabytes of data with .5 petabytes of new data arriving every day. Facebook and Twitter only represent two of the more popular social data sources yet there are many more.

IoT and Machine Data

A relatively recent source of data is coming from the Internet of Things (IoT). IoT represents a collection of uniquely identifiable items. Individually, these items generate their own sets of data. Data may also come in the form of ‘machine data’ or industrial data, which is generated through the use of equipment.

For example, GE’s GEnx next generation turbofan engines found on Boeing 787 and 747-8 aircraft contain some 5,000 data points that are analyzed every second. Put that into perspective. According to Wipro research, a single cross-country flight across the United States generates 240TB of data. The average Boeing 737 engine generates 10 terabytes every 30 minutes of flight.

Using a bit of math, the problem becomes fairly apparent. Using data from MIT’s Airline Data Project and the total number of Boeing 787’s in use as of December 31, 2013, the problem becomes:

Total data generated every day by the global 787 fleet in operation today:

(20TB/ hr x 9hr ave operation per day) x 2 engines x 114 787 aircraft = 41,040 terabytes (or 40 petabytes)

For Southwest Airlines alone, their data challenge is more significant:

Total data generated every day by Southwest Airlines’ fleet of 607 Boeing 737 aircraft:

(20TB/ hr x 10.8hr ave operation per day) x 2 engines x 607 737 aircraft = 262,224 terabytes (or 256 petabytes)

256 petabytes is a lot of data. GE included a couple more examples of Industrial Data in “The Case for an Industrial Big Data Platform.” From these examples, the sheer amount of data from IoT and machine data becomes clearly apparent. And these examples only highlight a small, specific use-case that does not take into account other aspects of the airline industry.

Not All Data is Equal

In many cases, unlike traditional enterprise data, which is structured in nature, these new sources of data reside in many forms and are typically unstructured. This presents a challenge to traditional data warehouses that are accustom to consuming and managing structured data.

When thinking about how to ‘consume’ these new sources of data, several key considerations reside with the data itself. Much of the data, in essence, has a half-life that drives its value over time. An important consideration is in which data to keep and for how long. The challenge is in knowing now what data might be needed in the future. That is easier said than done.

The default action taken by many enterprises today is to simply keep all data, which is costly just for the storage in which to house it. Unfortunately, this is leading to ‘data landfills’ of mixed data with varying degrees of value. As the volume of data increases, so will the landfills unless a different approach is taken.

The Holy Grail of Data Correlation

In addition to stockpiling data, the real value for many will come in the form of correlation. Leveraging one data stream provides valuable insight. However, when paired or correlated with multiple data streams, a much clearer picture becomes visible.

Think of the value to a company when they can compare social data, operational data and transaction data. For many marrying these data streams present multiple challenges. Now imagine that the number of streams (sources) along with the volume of data is increasing. It becomes clear how the problem gets pretty complicated pretty quickly.

Consumer vs. Corporate

From the increase in consumer adoption of devices and services over the past few years, it is clear that consumers are ready to generate more data. Enterprises need to prepare for the oncoming onslaught.

As consumers, we want enterprises to succeed in leveraging the data we provide. Take healthcare for example. Imagine if healthcare providers could correlate data between lab results, pharmacy data, claims data and social media streams. The outcome might be pre-emptive diagnosis based on trends of epidemics and illness across the globe. In addition, the results would be highly personalized and overall lower the cost of healthcare. If done, it would present significant economic and social improvements.

The Data Driven Economy

In summary, the onslaught from data is both concerning and exciting at the same time. The potential information generated from the data presents major opportunities across industries from providing greater work efficiency to saving lives. Business, as a whole, is becoming even more reliant on information and therefore data-driven. Data ultimately provides greater insight, personalization, and accuracy for business decisions.

It is important for enterprises to quickly evaluate new methods for data consumption and management. The success or failure of companies may very well reside in their ability to address the data tsunami.

Uncategorized

The Importance of rIrTrPrM

Many in the technology world focus on the technology itself without significant consideration of the data or more importantly, the information. When you dig a bit deeper, the real reason, the business reason we exist is about the data. Just presenting data, however, it not enough. When building applications to present data, we need to consider how to best present information. And with information, there is a core principle to follow. I call it ‘rIrTrPrM’. rIrTrPrM is an acronym of sorts:

rIrTrPrM

rI = right Information: Ensuring that the right information is presented. Extraneous or wrong information creates a convoluted picture. And it’s important to consider the information to present, not just data or data elements.

rT = right Time: Presenting the information at the right time or point when the user or consumer is looking for it.

rP = right Person: Matching the correct information to the right person looking for it. This is more of a matching of interests rather than security paradigm.

rM = right Medium: With several ways to present information, delivering the information in the right channel or medium. Is paper the right medium or mobile device or web application?

From a marketing perspective, getting the right information to the right person at the right time has been a basic principle. However, with the advent of newer technology methods and a change in the behaviors of how people consume information, the medium is a new component to consider.

When building applications, one must consider the user of the application and the information they will consume. In doing so, consider using the rIrTrPrM principle.