Business Models for Social Networking Sites

As a follow up to a previous post (here) on the need for social networking in sustainability communities, and the potential of social networking on a personal / individual level (here), there are some business strategies that may be followed for growth in this space.

Companies such as Viridus, Celsias, Ning groups, and others need to leverage their most important attribute: their network of users. The challenge is how to grow the network and retain & engage members; without alienating them. Facebook, for example, has growth exponentially; has attracted demographic groups beyond that of the college crowd, but still had a revolt on their hands when they reduced the (perceived) privacy of their users with new tracking applets. They are big enough, so that this was a minor bump in their growth; for a start up, that error could be disasterous.

How do we leverage the community? Here are some revenue building initiatives that may apply in the sustainability sector:

• Provide market research opportunities to outside corporations (allow corporations to test their brand image; new product releases, or to attract new talent via surveys)
• Allow targeted ads for user pages, profiles, groups, etc
• Design for internal use on a company's intranet
• Set up job posting (similar to E-lance and Guru.com) and job searching service
• Build in knowledge management (i.e. search, knowledge sharing, virtual communities, groups) and license third party access from vendors who may provide specific content and expertise

One area that intrigues me is building an internal site for a corporation; essentially creating a virtual community of sustainability professionals inside the firewall. The social networking company might also provide access to 'federated' data; profiles and groups outside of the firewall, with voluntary 'opt -in' procedures for users. This would minimize / eliminate any privacy concerns, and also motivate specific users groups to join, if they thought there were advantages to do so (job search inside a company, internal networking, specific content they were seeking).

A key challenge for this scenario would be how to integrate into other KM and intranet systems, so that the social networking site was not a siloed application.

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Social Networking column published on ENN

ENN (Environmental News Network) has published my column on "Why the Sustainability Community needs Social Networking"; originally published at TriplePundit.com

Link for the ENN article is here. Read more!

Another twist on social networking....

I read a blog by Maguerite Manteau-Rao, who provides some thought provoking questions around whether 'social networking in green is dead' in a recent Cleantech blog post.

(At the personal or individual level this is probably true, but not necessarily at a business / corporate level). In particular, she also asks: "what type of behavioral strategies are needed in sustainability"?

I think that there is far too much pressure on individuals to be sustainable; there are certainly specific opportunities out there (saving energy, minimizing GHG impacts), and there are those people who will serve as thought leaders and take it upon themselves to drive change. But for the mass of people (i.e. to 'cross the chasm'), daily life and getting by are the key drivers of day to day behavior. There are regulatory, brand mgt, revenue generation, and production cost drivers that need to evolve, until individual behaviors evolve.

So, from this standpoint, 'behavioral strategies' should be reviewed and modified (if necessary) by those groups (industry, government, education) who want to modify manage behavior (i.e. buying products, getting involved in social initiatives etc) on the part of individuals.

From a 'professional' standpoint (that is: those individuals who will make their living in the sustainability field), there are ample opportunities to change behavior; if for no other reason than to live a lifestyle of choice (and to satisfy intellectual and moral needs). I just wrote a column on TriplePundit on this opportunity. Read more!

Column on TriplePundit: 'Why the Sustainability Community needs Social Networking'

This column is a re-post of a column I wrote last week; click here to get to the article. Read more!

The Need for Social Networking within the Sustainability Community

Over the course of the past 4 years I have had the opportunity to work with or share market strategies with executives at social networking companies such as LinkedIn, Spoke Software, Visible Path, and BranchIT. Of particular interest to me was the ability to develop and leverage what I referred to as "Relationship Capital Management"; the opportunity to develop, foster, and share relationships within an organization (or ecosystem) for the purposes of optimizing knowledge management and revenue generation. (I posted some columns on this trend a couple of years ago on "Relationships as Assets" and Relationship Capital Management and CRM).

Viewing the challenges and opportunities in the sustainability market, it seems that social networking (both process and underlying technology) could play a large role in accelerating both awareness of key issues as well as potentially accelerate adoption.

Why? Here are some of the big challenges in the sustainability / cleantech arenas:

• Talent shortage (engineers, executives, scientists) of trained staff worldwide, with increased demand forecasted
• Limited training and higher education programs available today, especially in light of talent demand
• Wide range of sustainability technology and processes mean no single person / entity can be an expert in everything
• Very few sustainability processes have been codified at this point; case in point: the number of sustainability reporting schemes

The early stage of this field means that formal, centralized business models may not be the best organizational structure to follow (whether within an organization, or within a vendor company providing sustainability solutions). The development of virtual groups, social networks and other more flexible organizations may be better aligned to develop and implement fledging solutions. This is particularly important when one considers the range of expertise required to develop and implement a sustainable solution, a process, or even a company: business case development, financial modeling, conceptual and detailed design, construction, manufacturing / supply of materials, operations, etc.

So how are sustainability professionals interacting, sharing knowledge, and organizing for solution development and deployment? Here are some best guesses:

• Discipline - related: civil / environmental engineering (ACEC, ASCE, AWWA), Sustainable MBAs, etc
• Business process - related: supply chain management, process optimization, procurement, product management
• Industry groups: LEED, AIA, AGC, buildSMART, and other buildings initiatives for architects and engineering design professionals
• Regional groups: such as those in NY, Boston, India, and Silicon Valley; where there is an abundance of educated professionals with significant interest and expertise in relevant business processes
• On - line networks, such as groups set up in Plaxo, Ning, LinkedIn, Virid.us, Facebook, and Yahoo.

In the short term (next year or so) we will probably have multiple small networks that will grow organically along with their aligned sustainability / cleantech sectors (i.e. green buildings, green IT, etc). Over time I think there will be significant opportunities for start ups (one or more of the current social networking sites?) to build fee - based networks and integrate knowledge management, training programs, and perhaps certification programs to ensure high quality and continuous improvement / innovation of delivery.

I'm ready to help.

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Relationship Capital Management Software and CRM

The term “Relationship Capital Management” has traditionally applied to the development and management of clients and prospects of an organization. Customer Relationship Management (CRM) systems have been in place for a number of years, originally designed to increase customer loyalty and thus allow for better opportunity and account management. However, these systems do not allow for identifying and managing all potential relationships within the company ecosystem that may affect an organization: customers, prospects, competitors, partners, influencers, media, human capital (or talent), and other third parties.

Traditionally, the focus of CRM initiatives has been on driving down costs and creating richer customer data. As organizations gear up again to drive top-line growth, the need for CRM solutions to focus on customer intelligence and account development increases.

Where relationship capital management has potential to increase the utility of CRM / SFA solutions: by improving sales effectiveness, via identification of broader range of contacts that may affect the sales process; and consequently, the identification of best practice strategies & processes to develop high value customers and market segments. For example:

• Extend the reach of customer care solutions by incorporating more comprehensive business development intelligence gathering; especially important in the development of vertical - specific applications (for the services industry, for example)
• Broaden the network of contacts beyond just prospects, and make inclusive partners, competitors, and other third parties
• Utilize customer intelligence to provide insights into prospect and customer – specific value propositions and appropriate communication strategies

Coming up: some strategies to fully leverage a relationship capital management system....

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The Advent of Relationship Ecosystems

Is the tech world moving away from a hierarchial partner relationship model, to a networked relationship system? In discussions with both start up software firms and the larger ISVs, I have seen the evolution of partnerships and alliances moving from '1 - 1' partnerships to 'Many - Many' relationships.....

(this is not "Manny being Manny" as they say in Boston....as in Manny Ramirez, slugger for the BoSox)

Certainly SAP has stepped out in front with the relationship ecosystem concept: "Industry Value Network" refers to the SAP / partner ecosystem designed for complete and integrated solutions into specific vertical markets. How is a industry value network different than a ISV partner program?

Core areas include:

- Strategic Alliances with key platform & technology vendors
- Niche and vertical specific vendors fill in core white spaces
- Go to Market strategy is completely aligned
- Most importantly, there are inter relationships developed among partners, so that the partner ecosystem in networked and not hierarchial

Obviously, the challenges of developing and managing such an ecosystem are higher in the initial recruitment and developmental phases, and do require a more global and inter-networked management model. For smaller ISVs, the key is to identify those specific white spaces in the business solution and what specific tier 'n' partners to develop, and not worry about obtaining a direct relationship with the 'gorilla' . Read more!

Not all relationships are created equal, LinkedIn....

Have been using LinkedIn a fair amount for the past few weeks; more for ISV and market research projects; as opposed to checking out how popular I am...

(and don't you think that many of us use LinkedIn to measure our popularity? I mean, how many contacts / relationships can one normal person actually maintain? 100? 200?)

Anyway, one area of concern is the inability to selectively share your contact list with members in your network. Which leads me to the title of this post:

Not all relationships are created equal.

I want to share my list of relationships with select contacts, but not all of them. Like many of us who have succumbed to the ego blast of building a big network, I have a whole bunch of people who are linked to me, but are not necessarily people that I know very well, and are not ones that I am open to having my own network list of contacts exposed to.

So, where is my control of this list? There are a bunch of contacts I would like to allow access to my network, but I want to do that on an 'as needed' basis.

So LinkedIn: let's get some more control of our networks, ok? Read more!

Relationships as 'Assets'

On a broad level, relationships are about identifying & articulating common values & goals; allowing for requisite time and 'event' sharing to building trust, and allowing that relationship to evolve over time. Translating this to a business advantage: you can lower sales costs, shorten your sales cycle, and increase partner and channel effectiveness, by building trusted relationships. This follows a basic premise in developing a growth (and exit) strategy: You can't do it alone; you need an ecosystem of relationships (i.e. partners, advisors, potential employees, strategic clients) to acheive your goals.

Mark Granovetter (Stanford University) developed a concept called “The Strength of Weak Ties”: individuals can maintain a finite number of ‘strong’ ties or relationships, but they also have a much larger network of weaker ties with other contacts. In a large organization, the number of weak relationships identified can be substantial, and can yield significant insights into customers, sales, and market trends. These ‘weak’ relationships may include those that are associated with external contacts, such as prospects, influencers, and partners; but also may include internal relationships: a sales person relationship with product manager, or an internal recruiter’s relationship with an employee, for examples.

The organization that can identify and manage these strong and weak relationships may realize those relationships as assets, and leverage them in a way that increase sales and revenues. Therefore, from a revenue perspective, fully leveraging relationship assets over time may also increase company valuation as well. Read more!

The Primary Components of Technology Relationship Building

Many software firms are driven by leaders and entrepreneurs with strong technical expertise, but perhaps not as much expertise or desire in building & leveraging the necessary relationships to drive growth. Viewed collectively, these relationships may encompass:

• Business Development: acquiring key strategic accounts for alpha tests and beta deployments; also acquiring 'lighthouse' or strategic accounts that will provide early referenceability

• Building the Talent Ecosystem: identifying and developing those individuals who will bring insights, more brand awareness, additional referrals, and management expertise to ensure growth. Talent includes: advisors, customer councils, board members, members of the management team, and key consultants (interim executives, for example)

• Alliances / ISV Development: identifying, developing, negotiating with, and enabling key partners to sell solutions / products in the marketplace. Given the abundance of software firms, the consolidation of the major ISVs, and the desire of most corporate accounts to streamline vendor selection towards integrated business solutions, it is imperative that software start ups fully leverage indirect sales models to promote growth

• International Growth: same as the bullets above, but focusing on select international markets (APAC, EMEA). Relationships required include: talent, technology partners, sales partners

• Strategic Growth: those relationships required to position a company for acquisition or merger, or to identify those companies / technologies appropriate for acquisition. This relationship category aligns closely with building strategic alliances (above); identifying and building relationships with key technology partners that may result in an M&A event necessary to ensure continued growth, and allow for a successful exit for investors

Each of these relationship 'building blocks' have their own methodology and attributes (which I will cover in subsequent blog posts), but viewed collectively, this framework allows executives in technology firms to visualize the set of optimized & leveraged resources (internal and external) necessary to acheive key growth milestones.

Read more!