Social Media « Geoff Corey

So what do you think the goal of these websites are: Flickr, Facebook, MySpace, Pownce, YouTube, etc? Wouldn’t you love to read the original business plan vision, mission and strategy statments? I bet it is full of B.S. and what they stated in there business plans was very specific and they became something else. Facebook prolly had something like, “To recreate the high school/college yearbook online”. Total crap, they became a lot more then that.

Why are some of these sites so successful and others not so successful? Look at Twitter ridiculous growth curve. Do you think they had some vision of becoming a tool for other companies/applications backbone?

I have been reading one my favorite authors, Seth Godin’s latest book. And it hit me that all these websites basically should have the same vision and mission statement. Why some are successfull and others are not is really a case of how close their statements are to the following or just dumb luck.

Vision – Create online community

Mission – To enable users to tell there story, connect with others, and promote discussion

Now you look at that and say, how do you get from that to Facebook? Well, that is a long story but you can look at your Facebook account and the applications you use and look at the ones you passed on. My bet is the ones you passed on add no value to your interaction with others or are just stupid marketing applications.

Speaking of marketing, look how bad companies are implementing it on social networks. I get at least an invite a day to some twitter user that is following 55,000 users. Like anyone is going to follow them and listen to their marketing BS. Definately old school and pretty much completely worthless today. I’m afaid Seth Godin is correct, old school marketing is dead. Move on and use the social web as it is intended. To tell a story, interact with others and garner discussion.

I was having a discussion over the Friend Feed Social-Media room if people thought there were any parallels to the Dot-Com (Bomb) days with Social Web companies. Some great points were made that there is a much larger audience now versus then and one comment that software platforms are more accommodating and the barrier to market is a lot less. Both excellent points and the last one dovetailed into one of my other questions stuck in my head, “Why would anyone develop on the Google Application Engine knowing that they could change pricing within 90 days?” Why? Low cost entry and instant scalability.

Now developing on GAE does not mean success for a business. Let us suppose the favorite application architecture discussion going these days: Twitter. Twitter has had quite a few outages in the last month. Clearly as a result of hockey-stick growth they are enjoying. So the argument and test applications on GAE have been developed, why don’t they just use GAE? Well there is one problem: Money. Twitter is a great application with no revenue stream. So if they developed on GAE and they hit the hockey stick, how are they going to pay for all the bandwidth, CPU and disk? The infrastructure is no longer a fixed cost but a variable one if you want to scale that number of users. I assume Google will place some sort of limitations on billing and application usage. But the problem all comes down to money. Let’s assume Google does limit resources your application can consume. If you app is Twitter, then do you turn off the application when those limits are reached for the month? Surely that will not work for the business, however you can not spend more then your cash reserves allow you to spend!

Once again money becomes the single problem to crack. More importantly, cash flow. If the business model does not a have a revenue model built into the business plan, your dead already. If the business model is spend money and be popular and sell, you best go play poker in Vegas. The business has to have a revenue model that works. If you develop on GAE, the barrier to entry is small but you have to have a scalable revenue model such that you know the cost of each user addition. So when your business does hit the hockey curve, you can increase the resources available without worries of running out of cash.

Writing a business plan is key to the success of the business, the underlying idea for the business does not ensure success. In that regard, there are a lot of social web companies that look very similar to the dot-com days with VC money pouring in and very little revenue coming out. Revenue must be around the corner according to this article on Information Week

Geoff Corey

Business planning, software development, entrepreneurship and technology

Social Media

Social websites and their vision statements

Business and technology planning – do it now before it is too late!