Business models of social networks

When it comes to evaluating a new social network, such as the new Ello, one of the most important questions you can ask is how sustainable it is. The best perspective on the sustainability of any business is summarized by Jerry Maguire:

show me the money!

How does this new social network – or any social network – plan to stay in business? After all, a social network isn’t free. There are servers – even in the cloud – that cost money. Bandwidth costs money. Disk space, even with platforms like Amazon S3 and EC2, still costs money, and the more popular a network is, the more money it costs. That money has to come from somewhere.

From a business perspective, there are three fundamental models for how a social network can make money:

1. The network charges users. This is the most straightforward business model. The user pays a fee and the business uses those fees to stay in business.

2. The business sells something that subsidizes the network. Path did this with stickers. Spiceworks does this with its user community.

3. The network charges advertisers. This converts the user into the product, and the advertiser as the customer. Facebook and Twitter are the most prominent examples of this.

There are hybrids of these models. Path sold stickers and also sold premium memberships. LinkedIn is one of the few networks that manages to do all three: charges users (Premium profiles and features), selling ad space (LinkedIn Marketing Solutions), and selling a product (LinkedIn Talent Solutions). But if a social network doesn’t do one of these, then in the long term it’s not sustainable.

Ello has made the bold statement that it is an ad-free network, which means that to stay in business, it must do either #1 or #2.

The thing we must know for any new social network, whether it’s Ello or perhaps a new wave of entrants, is simple: show me the money. If it’s not there, don’t place more than a token bet on the network’s long-term future.


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Will your speech be a success?

Lots of different public speaking programs claim the ability to help you be a successful speaker, to be able to make people love you and adore you. With the exception of Oratium (which is more about presentation architecture than on-stage charisma), I’ve not found any that address the fundamental flaw in most speaking programs.

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The fundamental flaw goes back to a direct marketing concept first created by Bob Stone in 1967. Stone simply said that direct marketing was a matter of three things in descending order of importance: list, offer, creative. If you don’t have the right list, your campaign will fail. If you don’t have the right offer, the list won’t respond. If you don’t have the right creative, the offer will not be noticed.

Let’s take Bob Stone’s framework and apply it to public speaking. Who is the list? It’s your audience. It’s who is in the room. If you have a canned talk, a topic that you’re known for (or want to be known for), you have to figure out whether the people sitting in the room even want to hear about it. If it’s not deeply relevant, it doesn’t matter how good a speaker you are or how good your speech is, they won’t care. Choose your audiences with care! Some audiences and some shows, no matter what the speaking fee is or how important the attendees are, simply are not good fits, and you should pass them up. If your topic is relevant to the room, then you’ve cleared the first and most important hurdle.

The offer in Stone’s framework is the content, which in the speaking world is the content of your speech. The best speakers I know adapt their talks heavily to who the audience is, to who will be in the room. Jay Baer is a master of this – he even rewrites entire books for specific industries. I recently delivered a talk to SpiceWorld, an IT developer (and now IT marketer) conference, and it was written expressly for the IT marketer, filled with nerd references, and tailored to the audience so that they would understand the relevance of what I was saying. Make sure that your speech feels like it was written for the crowd you’re with, and that crowd only.

The creative in Stone’s framework is the delivery in the world of speaking. As is the case in direct marketing, the delivery, or how you speak, is the least important of the three areas. It’s still important, but if you’ve got the wrong audience and you’ve got the wrong content, how well you delivery it will be irrelevant. Conversely, if you have the right audience and fascinating content, people can excuse mediocre delivery. This is where speaking programs that focus on tonality, umm and ah counting, etc. can come in handy, to add some polish to your delivery, but a good voice lessons class or acting class can do just as much good (and probably be significantly less expensive). Much of how I learned to speak came from modeling my martial arts instructors.

Audience. Content. Delivery. Get them right, in that order, and your speech stands a much greater chance of being a success!


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Networking for people who hate networking

One of the constant career tips you’ll hear at every level of business and marketing is to go out and “network”. As a former IT guy, I once thought that networking with Ethernet cables and routers was significantly more fun and entertaining than business networking, where you force yourself to go out and talk to people you don’t know and have no reason to talk to, other than “networking”.

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However, that was the wrong way to approach it. A powerful networking trick I learned from one of my martial arts instructors made networking much more valuable AND fun. One night at the dojo, Jon F. Merz was mentioning that as an exercise, he tried to go through his entire high school reunion without giving away any details about his life, always redirecting the conversation back to the person he was talking to. This takes advantage of people’s natural inclinations to want to talk about themselves, and is a handy trick for people who want to gather information without giving away too much.

What a handy, powerful way to reframe networking. What if, instead of viewing it as an exercise in performance and narcissism, you viewed it as intelligence gathering, information gathering? Wouldn’t that change how you acted? Wouldn’t that change your goals, even the questions you asked? Instead of being forced to find a way to talk about yourself (which is difficult to do well), you now have a much simpler laundry list of questions you can start with.

  • So, what do you do for work?
  • What did you think of the keynote speaker’s talk?
  • What brought you to this event?
  • What do you make of (industry trend)?
  • Who do you work for? (if the badge isn’t visible and you don’t want to stare)

Once you get the conversation going with questions, it’s easy to keep the questions coming, keep the information flowing. Listen for keywords and terms that you legitimately want to know more about and have simple conversation prompters ready.

  • I’ve heard of (keyword) but don’t know much about it. Can you tell me a little more about that?
  • That’s cool, I’ve always wondered about (topic). Have you worked a lot with it?
  • Interesting. How did you deal with that?

Finally, have porcupines and words at the ready as well. Porcupines are a question type where you immediately hand back a question to something someone said, as though they had handed you a porcupine. So imagine someone saying, “Are you having trouble with content marketing?” The porcupine would be, “How about you?” Single question words are also powerful ways to get someone to talk more. When they mention a topic, simply repeat back just the topic and only the topic. For example, someone might say, “Oh, and we’ve been really struggling with keywords and SEO ranking lately” to which you’d say, “Keywords?” and the conversation will flow.

Turn your networking game into an information gathering game. Not only will it become much more comfortable for those of you who are introverted, but you’ll also make the people you’re talking to feel like the star of the show – and that will accomplish your networking goals far faster than talking about yourself.


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