Last week, I said that the real money and growth potential in location-based services is not in people telling the world where they bought their coffee, but with the ability of less public admission of involvement with community.
Most people are not really comfortable having their personal doing publicly broadcast, or at least not being able to control what goes out and who sees it. This is the potential killer of social media growth. They will, however, share lots of stuff within a small circle of people they know... and no one else. This is the market that some social media startups are starting to exploit.
Location-based services are an outstanding way for individuals to support local businesses and non-profits without ever letting the outside world know it's happening. Within their communities they can share what they support and even compete in game-play for community activism. As I mentioned, DeHood is putting significant resources looking into how this can be implemented. Ark.com has already launched a platform that allows individuals to make online donations to their favorite charities, just by shopping online. Some of the major players are sniffing around this idea, but they are struggling to change their mindset from reaching billions of people to reaching groups of hundreds and less.
But where is the money? Well, if you just look at the potential for administrating donations to non-profits it's a $15-30 billion market just in the US. That doesn't count the potential market for goods and services in local businesses. How much could that be? Who knows. But small business revenue comprised more than 50 percent of last years GDP, so it's around $7 Trillion.
The value of social media is not in the sheer size of a market, but in the individual.
Social media is not a fad. It’s here to stay. But the current incarnation is reaching a saturation point. Almost everyone who is interested in being connected to a social platform has done so to whatever degree they want. What is creating a barrier to adoption is the issue of privacy.
Let’s face it. People are overwhelmed by the amount of data coming at them now. They are finding subjective and subconscious ways of filtering it out either by ignoring the information or by actively removing themselves from the conversation (e.g. closing a Facebook account). This activity, while nascent at present, is the golden-goose kiler for social media. If people actually start walking away in droves, that’s going to be a problem for a lot of companies.
Now I’ve made it clear that I believe privacy is not really an issue. It’s something anyone can control if they wish, but the fact is, most people want to make sure everyone else is taking care of their privacy for them. Social media mavens like Mark Zuckerberg thinks those people need to get over themselves and just deal with it (and I agree with him on that, too). However, just because some billionaire thinks you should do something doesn’t mean you are going to.
That last fact opens up an opportunity for a different kind of social media platform and location-based technology can make that happen.
What is really at issue is not the protection of personal information but what the Supreme Court calls, the right to be left alone. The right, established in 1928 is what keeps the government from doing wiretaps without authority and keeps organizations from selling sensitive information to others without your approval. Social media violates this right on a regular basis. That is what has really got a lot of people up in arms.
At the same time, however, people want to be connected. The hectic activity of our lives, the barrage of media messages, and our mobile lifestyle keeps many people from actually developing real relationships. Social media has helped hat to some degree by fostering virtual relationships and, often, providing a new means to connect with people that mean something to you. Unfortunately, it also allows people to contact you who you don’t want to be connected with. That’s the problem people have with Facebook groups now. It is possible, unless you go in and set your security features properly, for anyone to force you into a social group that you don’t want to be part of and start getting information you do not want. That is the Achilles heel of social media: it forces you to be involved.
As I mentioned in my last post, I’ve run across some companies that are working on ways to turn that paradigm upside down. The goal is to allow users to determine the size and reach of their social networks. If they want just a few people in their circle and not share any information outside of that circle, that’s possible. People can’t ask to join but can be invited to join. DeHood is one of those companies.
(Disclaimer: I am consulting to DeHood on community relations)
Dehood has reached out to a few Redwood City communities of late and is asking them, specifically, “what would you like to see in in a social group.” At present, they are working on developing a virtual neighborhood watch project for two neighborhoods that are plagued by increasing gang violence. They are also talking to a preschool that wants to “gate” their little community around the families attending the school. finally, they are talking to a church about creating a package for their youth group. In every case, these groups are closed and require some sort of vetting. At the same time they are being opened to police and fire organizations and government groups for the purposes of public safety.
Ning has been doing this to a certain degree, but the problem with Ning is you have to be technically proficient to be able to build and manage a private Ning site. Other social platforms can also be used for these purposes, but again you have to be savvy enough to navigate around the default settings. DeHood is setting all defaults at private, even to the point of limiting profiles to name, user name, email address and gender.
So how will they make this profitable? Isn’t the whole point of social media to capture as much private information as possible from the buying public? Actually, no. You can do that and that is exactly where we are today, and why many people are backing off. The real purpose of social media is to benefit society; to build trust; to find peace of mind in an increasingly dangerous world. Because when you have that, you have a growing and sustainable economy.
What we are seeing happen is social media for the introverted; the people that think stuff through; the people who choose not to comment and check-in on everything everywhere; the people who have not yet bought in fully to the belief the social media is the coolest thing ever. Because these are people that stay loyal to brands. They are not easily convinced and not easily dissuaded. They just keep buying your stuff and they become the most important beings in the social world: Trust agents.
That’s where the money is and companies like DeHood are on the first wave.
This post was going to focus, primarily on Dehood, but since writing part two of this series, I fell into a new world of the Social Web companies from all over the world and I have discovered they fall mostly into 5 buckets:
sharing stuff
rating stuff
measuring stuff
organizing stuff
selling stuff
All of that is great for marketers. The more people participate in all of that stuff, the more information marketers have on the participants, so it's easy to sell stuff, which is the biggest part of the Social Web. That's where it leaves a lot of people out of participation because there is so much emphasis on the latter, that the rest seems to be rather manipulative.
That's a big problem because the whole point of the web, in the first place, is to bring people together and the social movement has been co-opted by the sales departments of the corporate world. If you pay attention to the big players in the Social Web industry -- Facebook, Twitter... and everyone else -- you will notice that in the beginning, making money was not the primary driver. The passion was about doing something new; about communicating with your local community. Facebook started out as a way for Harvard students to connect in meaningful ways (well, at least as an easy way to hook up on the weekends) and then expanded to Boston-area colleges, then colleges nationwide, etc. Twitter launched as a means of helping people attending SXSW connect and communicate at the event. Selling stuff and meeting complete strangers in distant lands was secondary.
Now, however, when a social web company launches, they want to go big, right away. The VCs push them for that. The press clamors for it. And when you go to social web events (and I've been to three in the past month) that's what everyone talks about... well, almost.
There is that pesky location-based service issue, which is what I started writing about. Some of these services, like Foursquare, have fallen into the social web hype maelstrom and are trying to be as big as Facebook right away, but their value proposition is not about building community, but about the first and fifth buckets. In the process, they also do some of the other three. And after you have become the mayor of several places and spent all your disposable income, there is not much left. People who are status addicts are still entranced by the game, but when you get out into the streets, you find something different altogether.
I am involved in international business. I have relationships with people I have never physically met but enjoy rousing conversations with them on many subjects, all through social media. But I'm involved in my local community and my neighborhood. I actually know and am close to several neighbors. And when I shop, the first place I look is local. That's what it means to be in a community, and that's where the Social Web comes up wanting for the larger market.
In the past year, I have been able to show many people and businesses how to use social media to expand their local presence, but in every case, I have to show them how to jury rig currently available social media to make it work for them. Over the past few weeks, however, I have found a sixth bucket of the Social Web that is trying and succeeding in focusing their product to build real relationships around you, not virtual relationships online; companies that are putting the Social Web in the hands of the rest of us.
I interviewed some of these companies at TechCrunch Disrupt a few weeks ago and a few I got on video. What makes them stand out to me is that they are making applications that can be important for many of the people on the top of the adoption bell curve to see the value in this mobile based economy.
That last point is what is so very important for all of us. Right now smart phones are all the rage. It seems sometimes that the entire world is snapping up iPhones, iPads and Android phones. The reality is, actually, they are not. With all the hype about this stuff, smart phones have yet to jump the chasm into mainstream adoption. Even iPhone sales have penetrated less than 6 percent of the available market. That's because the benefit of the technology is the ability to use apps and there is no compelling reason to use apps yet, other then they are cool and attractive to early adopters.
This new bucket of Social Web companies is approaching specifically the section of the market that just can't see the value in smart phones. How they are doing it will be very profitable, but at the same time, very altruistic.
Last week I started a series on the importance and future of geolocal (also called geosocial) apps and outlined a few of the roadblocks to success including the lack of widespread adoption of the underlying technology (smart phones), holding the interest of the audience, and the lack of community building inherent in the current options. Today I want to look more into that last problem and how some players are overcoming it.
As I said last week, the big benefit of social media is its ability to build communities through the web. But those communities are, for the most part, virtual. If you are in Facebook or any other platform, you have a large group of people in your network that you have never actually met face to face. Yet, you are in contact with them regularly no matter where they are in the world. you know a lot about them and you have several common interests. However, try to do that on a local level with social media and you run into a problem: you can’t without a lot of effort.
I discovered this over the past two years on some pro bono work I’ve been doing for Sustainable Redwood City. I wanted to use social media to grow the organization but discovered that if I didn’t already have a personal relationship with people in my community, I couldn’t actually get them to connect with me or the organization on any SM platform. I had to meet them first before they would accept the connection.
I also could not use social media to discover people in my community or neighborhood because the platforms did not get that granular. In Facebook, for example, I can choose the Silicon Valley network or the San Francisco network, but not the SF Peninsula, San Mateo County, Redwood City or my own neighborhood, Friendly Acres. I was forced to accept a position in a large geographical context. This isn’t as much of a problem if you live in New York City or San Francisco, but it doesn’t help the 2 million+ people in the Bay Area.
What social media lacks is a local approach and even the entry of Twitter and Facebook into this realm is not helping.
Geolocal/social apps are supposed to help solve that problem by making it possible for local business to reach their local community and expand their business. If you are an ice cream shop or a coffee bar, it’s a great idea because you will succeed if you get a lot of regular customers. If you are a dentist of an auto shop, not so much. If you go back to those guys more than once in six months you have a problem. But the real benefit lies with the vendor, not the customer. You need a way for those customers to come together in a community, without violating personal space or privacy.
And that’s the good news because I have discovered some startups that are doing exactly that.
The one with the biggest name is Yelp. They’ve recently added a geolocal aspect to their reviewing service where you can check in to favorite establishments, but again, they are focused only on commercial outreach and only to whole cities, not neighborhoods, so it is a step in the right direction but not exactly what I think people need.
Next up is a tiny little company called Gogoverde, which is hyper focused on neighborhoods and is currently only available in Palo Alto and Redwood City. But they lack the geolocal tech at present. Mostly what they do is get people who already know each other to join a local network and share information and materials.
But the app I’m really excited about is a company called DeHood. I’ve been using the app for a while, sending some of my activity on it to my Twitter and Facebook pages and even went in to talk to the company leadership, Babak Hedayati and Mike Mertz, to find out more, which lead to a consulting contract with them that started a couple of days ago (so there’s your full disclosure)
But I’ve been using the tech for several weeks now simply because it accomplished what I’ve been looking for: a social media application that can build local and REAL community.
And what DeHood does will be the subject of the next post.