Is Social Media Fundamentally Changing How We Communicate?

I’ve been busy digging into different ways to utilize social media for a while now.  This exercise has been driven by a couple different factors:  1) we are working on a product to help the public safety community better utilize social media and 2) we are searching for a director of marketing with some experience in social media.  This research sure hasn’t made me an expert on social media, but it has forced me to think about its impact.  As I really think about social media, I keep coming back to the same question… is it really a fundamental shift in the way we communicate or just another mode of communication.

This really cool infographic (http://assistedlivingtoday.com/p/resources/social-media-is-ruining-our-minds-infographic/ ) highlights some scary data on how social media is effecting the way we process information.  For example, 10 years ago the average attention span was 12 minutes… it’s now 5 seconds.  Is that true?  I’m not sure where the data came from, but it passes my “sniff” test.  I find myself looking at my phone for messages and wanting someone to “get to the point” at an increasingly frequent rate.  Don’t know if my attention span is 5 seconds, but it surely isn’t measured in minutes.  But again, is this a factor of the mode of communication where my phone is constantly receiving messages that expect a response or a fundamental shift in how we communicate?  

1)      Social media feeds a need to be recognized.  At its core, social media taps into a desire to be heard and recognized.  While some social media usage is much more directed in nature (e.g. a brand launching a facebook campaign or a subject matter expert building a following to monetize in some manner), much of it is information sharing and recommendations by individuals that are professing knowledge about something.  Social media provides many with an outlet for a fundamental human need for recognition. 

2)      Social media provides a broad audience in a socially acceptable “opt-in” manner.  Prior to “web 2.0” type technologies, we were limited in the audience we could share with.  Sure, you could email your friends about a great book you read, or about your thoughts on Newt Gingrich but the reach was limited to those that probably already knew you well.  What in the email world would once have been thought of as unsolicited spam is now socially acceptable and in fact encouraged through the use of hashtags and other social mechanisms.  

3)      Social media forces targeted comments and brief summarization.  Traditional forms of communication involve building up a case or argument and then hitting the punch line.  Social media often forces the punch line to come first.  Even in mediums that allow more than 140 characters, we have to grab the reader’s attention to get them to click thru, share or like.  Our feedback isn’t on the depth of analysis and building of a strong argument, but on the ability to quickly grab attention.  While we used to worry about coherent arguments, grammar, and spelling, it’s now about condensing the content into a pithy short statement.  It should be noted, however, that the most shared and impactful social media usually has some deeper underlying content and analysis that is being referenced.

What do you think?  Is a technology fundamentally driving a change in the way we communicate across all different communication modes, or are the changes only relevant to the use of that specific social media tool?

A Contrast in Two Customer Experiences

Ok... So this really isn't related to technology, public safety or social media, but I've been thinking a lot about customer experiences lately.  As the year draws down and we start our planning for next year, one of the key financial metrics we look at is customer retention.  I'm extremely proud of our team for continuing on our near 100% customer renewal rate.  Getting that level of customer satisfaction in a competitive market requires a corporate culture dedicated to the customer experience.  Do we have hiccups?  Sure.  Occasionally a customer has a different expectation for how something works or simply wishes another feature were available.  However, when the company is dedicated to finding a way to meet the customers need, that cultural emphasis shines through and clients recognize the level of support they receive as a genuine interest in the customers well being.

Today I had two wildly different customer experiences that highlight how different cultures can  effect the long term value of a company and its brand.

A while back I used a service called RocketLawyer to get some example templates for some legal contracts.  I didn't realize or forgot that I was on a short term trial account that after 60 days converted to a paid account.  Now, I gave my credit card during the sign up process so in all likelihood I just forgot to close out the account until I saw the charge hit my credit card.  I called up RocketLawyer (admittedly a bit disappointed that I couldn't just cancel my account online) and eventually got to a customer service representative.  The rep respectfully explained the value of continuing my service but in short order went through the process of moving my account back to a "free" level of service.  He then unexpectedly also offered to refund my monthly fee, saying "it looks like your account just converted and since you really haven't used the service actively I'll go ahead and credit you that monthly charge."  Wow.  Really?  I mean, I was just dumb and forgot to cancel.  Thanks.  The result was that I will think of this service first next time I'm digging around for documents and will surely consider a paid plan if I end up needing that level of service.

My second experience today was far less rewarding.  13 months ago I decided to beat the Christmas rush to getting a Gym membership and got a great deal on a 1-year prepaid membership at a local club called Evolve Fitness.  At the end of that period, the account would convert to a month-to-month contract.  Much to my wife's chagrin I wasn't very faithful about using the Gym, but I clearly remembered the date which marked the end of my pre-paid contract.  2 weeks prior to the date at which I was to convert to a month-to-month I trekked my way to the Gym to cancel the membership (I was lucky to remember where it was located).  After getting a manager I was told that I could only cancel my account by calling their third party billing company.  "But I signed up right here", I said.  Ugh.  Fast forward a couple calls going through a horrible IVR system only to get tired of waiting online and I get hit with a monthly credit card fee.  Double Ugh.  After finally getting through to the billing partner I discover that I am required to send a written notice with 30 days notice.  Oh, by the way... within that 30 day window there happens to also be another "yearly fee assessment".  Wow.  So I have to basically pay 3 months of fees to cancel?  Yes sir.  Needless to say, I won't be recommending this Gym and will make sure to spread my dissatisfaction widely.  To be fair, the contract I signed surely laid out the need to send a 30 day written notice and it probably also covered an additional yearly fee assessment somewhere in the small print.  However, I'm sure I was not made aware of the fact how difficult it would be to stop them from continuing to take my money long after I no longer desired the service and am equally positive that no one I interacted with had providing me with a positive experience at the top of their priority list.

What's the morale of the story?  There are two approaches to customers - one where you put the customer first and think about the lifetime value of a relationship, and the second where you try to squeak out an extra monthly fee at the expense of your brand.  I know which path I'll continue to march down.

P.S.  If someone from Evolve Fitness reads this, please feel free to comment.  I can't seem to get a hold of anyone in authority :).  On the good news side, the Gym was clean and the equipment was great on my few visits over the past year.

Missing the Picture on Start-up Teams

CNN posted an article today entitled "Silicon Valley's Scarcest Resource:  Technical Founders".  I think the article missed the bigger picture.  To quote the article:

"Skilled developers are Silicon Valley's scarcest resource. With big companies throwing around giant salaries and startups competing fiercely for talent, the technical ability to build what they envision is often a make-or-break issue for new ventures."

The title of the article really should read "Silicon Valley's Scarcest Resource:  Ideas Big Enough to Take a Risk On".  Since I run software development for a start-up (full disclosure: my view points are fully tainted by SaaS development),  I fall into the technical category that many in the article argue is the make-or-break issue.  I would argue that the real make-or-break issue is a deep understanding of the customer pain being addressed by the start-up and the market size of that pain.  The technology to address that pain can, and usually does, morph and is often of second order importance.  In an early stage company, the key is to listen carefully to the customer, understand the core of their issue, and make sure you address that pain in the most straight-forward manner. 

Depending on the stage of the start-up and the pain being addressed, the first phase might be a proof of concept that doesn't even fully function, but instead enables the founders to present their vision to likely customers and get some level of validation and commitment.  As long as the team has some level of understanding of what is possible (and that admittedly takes some technical acumen, but far short of actually doing the coding) they can easily manage a process of hitting those first milestones by outsourcing early development. The bells and whistles and infamous "scaling" comes later in the process.  Often the outsourcing of this proof can be done at far lower total cost than having it done "in house", when you consider not only high salaries but also the cost of equity stakes.

A quote from an investor states:

"I will not even talk to a company if they don't have developers in-house... Most investors bet on a team -- how can you bet on a team that's outsourced?"

That seems to be a very narrow outlook on what you are betting on.  The important question is where is the intellectual property?  Was Facebook's success because of the coders?  I don't believe so.  The founders hit on an unmet need and were very savvy in how they met that need and grew the platform.  It didn't matter if it was built in San Jose or Bangalor.  The IP was in understanding the customer base, closely monitoring their behavior and the business model behind building a social network that had built in barriers to entry. 

Let's be clear - in some instances not having a technical co-founder is a non-starter.  I can't imagine investing in a company trying to handle improving a data compression algorithm without someone who was very technical and understood both the math and computing challenges, BUT... it just so happens that the customer pain the company is trying to solve is a very technical one.  Companies that require a huge up-front investment before they can show any milestones of success is another example of a company that requires a technical co-founder.  I couldn't see investing in a bio-tech venture requiring millions of dollars to even hit clinical trials unless I felt confident in the tech team.

One of the great advantages of software is the ability to easily modify it and deliver in a modular fashion.  This is hard when you are big and have lots of customers to worry about, but is essential to a small early stage company. 

What's my point?  Innovation shouldn't be held up or a good investment passed on because it doesn't have a technical co-founder.  If you are passing because of that, the opportunity probably isn't really all that strong!

Growing up SaaS

The other day one of our investors asked us to speak with another of their portfolio companies that was considering moving to a multi-tenant architecture from a more traditional hosted set-up.  What does that mean?  Right now they host separate instances of their application for each client.  They want to move to one platform where each client logs in and sees a "personalized" version of the same application.

Big deal you say... lots of folks do that!  What was interesting about the conversation we ended up having wasn't that it was something new and unique, but that many of the insights that proved of value to this other company were taken for granted by those of us that have "grown up" in the "cloud" or in the Software-as-a-Service business.  For almost my entire software career I've been in product management for companies offering their product as a hosted service on a multi-tenant platform.  In fact, my first entrepreneurial venture (sadly a failure) was because (in part) we were offering SaaS before folks understood what it was.  Some of the things that become a natural part of the DNA of a SaaS company are fundamentally different for a traditional enterprise software model.

I don't mean to infer they are in anyway more complicated than the challenges or learnings inherent in "on site" software or custom hosted solutions, just different. As we began "riffing" on lessons learned and risks to avoid it really stood out how different the models are.  Some simple examples:

1) Disaster recovery/Fail-over/Upgrade processes.  When you are in a multi-tenant model, what happens to one customer happens to all.  Have a failure - you are getting calls from everyone, not just one customer.  This changes the financial equation in evaluating a fully geo-redundant system (and in our case made it a no-brainer)

2) Reporting.  Since tenants are sharing a common platform, is no longer as easy as just watching click trends or aggregated behavior, you have to be able to drill down into specific tenant data (not to mention the usual parameters)

3) Customization.  In a true multi-tenant model, everyone gets access to the same features... or at least could be given access to the same features.  The trick here is balancing what you add into the platform and how.  Inevitably customization requests have to be addressed.  Do you make the new "customization" available to everyone?  Does it overly complicate either the infrastructure or the user experience?  Does it add too much to your cost basis?  If only one client wants this feature, what will your cost be to implement and support this one feature across your entire platform?

What's my point here?  I guess it was an epiphany for me to see the challenges faced by someone trying to move to a SaaS model.  It's not just about the bits and bytes - that might even be the easy part - its about how you approach the market and the DNA of your company.  Some of the things that have just grown up as a natural part of my company's way of doing business were completely different than this "traditional" software company.