Jan 23, 2012
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The business model known as collaborative consumption — where buyers and sellers trade without intermediaries through an online community marketplaces — has been a homerun for Ebay and Craigslist.But a new breed of start-ups like AirBNB, which apply the same model to service industies, where responses times are critical, and relationships matter, may not fare so well.
Here are three examples where service oriented community network business models fall short:
1. When Buyers Need Protection – The more important relationships are to successful transactions, the more risky peer-to-peer transactions are. When there is very little promise of future revenues, sellers are much less motivated to perform. If I chose to purchase raw materials from a vendor based soley on price, and the quality is inferior or they can’t deliver on schedule, that could shut my plant down. And time is money, so I need a relationship with someone who can fix problems quickly. And the same is true in most service industries, which is why they may ultimately fail at collaborative consumption. Take AirBNB for example. Their listing hosts can evict guests without cause, and there’s virtually nothing meaningful the service can do about it. On the other hand, if guests back out of a booking, they could wind forfeiting half the booking fee.
2. When Buyers Need Support - Recurring revenue is what motivates sellers to remedy problems. In the case of a community networks like AirBNB, where the likelihood of repeat business between the same buyer and seller is much lower than it would be for a hotel chain, motivating the seller with the threat of a bad review is defeated by the seller’s ability to slam the buyer with an equally bad rating. And AirBNB does not serve as an arbiter of truth. Given the size of the network and the number of transactions, how could they? Service oriented collaborative consumption business models don’t scale well.
3. When Response Times are Critical – If you’re unhappy with a purchase on Ebay, you can file a dispute on your own time, from the comfort of your home. But if you’re locked out of an apartment you rented from AirBNB, your ride doesn’t show or your task doesn’t get done, you could be looking at 5 hours in dark hallway, a missed flight or no dry cleaning. Mishaps are often nobody’s fault. But when they happen, they do need to be resolved, and that’s what service industries are about. Connecting buyers and sellers to trade services without protecting either side with adequate support is critical. But the expense of providing that support for a community network just may not be scalable for these nascent companies. Adding standards and verification could be the answer. The question is can these companies afford it without sacrificing their profitability?
Social media business models are not one-size fits all. Just because collaborative consumption works for some online marketplaces does not mean it works for all, and services may be too economically challenging for these start-ups to delivery.
The jury is out on whether or not service oriented collaborative consumption businesses like AirBNB, Uber and TaskRabbit will be able to adequately satisfy those customers in an environment where response times and relationships are important.
This post is based on an experience I had renting an apartment through AirBNB. If you’d like to hear a podcast discussion about what happened, click here.
Categories: collaborative consumption5 Comments
With all the talk about the complaint PhoneDog.com filed against Noah Kravitz for “misappropriation of trade secrets and damaged the company’s business, goodwill, and reputation” some companies are liable to update their social media policy.
But those that do are making a mistake. Because if they’re going to be heard through social media, they’re going to need as much help as they can get. And they’re not going to get it by imposing ownership claims over their personal social media accounts
I don’t intend to make any substantial changes to my Social Media Policy Template because of it, and here’s why:
On social networks, crowds direct our attention. If it trends, it upends. And if it doesn’t, it just ends.
What one person tweets matters only a little. What the crowd retweets, matters most. The same social gravity applies on Facebook, Linkedin and G+. An effective corporate social media policy protects the organization and its employees alike. Afterall, why would your employees retweet your message on their personal social networking account if they’re concerned it might get them fired, or if they’re concerned you might someday try and take it away from them?
Imposing strict ownership requirements over an employee’s personal social media account discourages them from using social media for on theior employers behlaf, which means they won’t be retweeting your message. And in nowadays, you need retweets, Likes and +1s to get noticed. So a good social media policy must encourage employee participation.
Sree Sreenivasan, a professor at the Columbia Journalism School, who is paraphrased in a story about the incident by New York Times reporter John Biggs (@JohnBiggs) says it best:
…many industries had policies that required sales staff to leave their Rolodexes behind, but that these policies were as relevant to social media as Rolodexes are to the modern office. After all, social media accounts are, almost by definition, personal.
He also said that the average Twitter account had less clout than many might think.
On social networks, we crowd source news and information. If companies want to get noticed, they’ve got to get crowds talking. And in most cases, their employees are going to be easiest place to start.
Do you intend to update your social media policy as a result of this complaint, or will you wait to see what legal precedent, if any, transpires?
Image By: Dbarefoot
Categories: social media policy, social networksDec 17, 2011
I’ve been thinking a lot lately about how best to conduct social media training online. I do a lot of live training, which consists of lectures and exercises, and I see first-hand how tough it is for anyone to take in reams of information in real time.
Lectures are inhumane. You sit with a bunch of people you don’t know and hear one person share basic concepts. You can ask only one or two questions. There’s not much time for instructor-student dialogue. Everyone’s forced to learn at the same pace. And students are not empowered to apply what they’ve learned.
Tests don’t accurately assess ayour capabilities. GPAs, transcripts or completion certificates say nothing about whether or not you really have the skills that were taught. Yet testing is the main way you’re evaluated, even though projects work is a much more realisitic simulation of how you apply practical skills to real world situations.
With exception of the big name Ivy League schools, academic credentials are certainly no guarantee of employment. Attending college affords you a valuable life experience, but it doesn’t mean you’ll get real skills and be able tp earn a living.
Technology has the potential to change all that, as Khan Academy founder Sal Khan and Stanford AI professors Peter Norvig and Sebastian Thrun discussed in a recent Google+ Hangout about the future of technology in education.
The video, in which students from well known universities ask the three questions about how technology will change education, lasts about 45 minutes, which is not exactly the granular chunks Sal says students need, but if this subject interests you, it is well worth watching.
Here are the major take aways:
- Gamification makes learning more Fun: Scores are more fun and more motivational when they’re presented in a competitive, game-like fashion. What is a report card other than a score? Some people think of their bank account as a score. Why not use game mechanics to encourage participation and improve performance?
- When people are together physically, they learn more through one-on-one mentoring and group interaction than from a passive lectures. Use technology to convey basic principles in granular chunks that students can stop, rewind and replay, and make class time a more human experience through more instructor/student/peer interactions.
- The challenge of integrating technology into education is combining personal and group experiences, where the personal experience is the student’s interactions with the course material, and the group experiece is the student’s interactions with their instructor and peers.
- Educators can use technology to collect more detailed data on student performance, much like Google Analytics collects detailed data on website usage. Grades are too broad a measure of performance to have real value to employers. Online learning allows instructors to use A/B testing to see what students respond best to and improve their courseware, and to capture performance data as well. But more importantly, using the web for personal learning could also let students focus on project work that can form the basis of a portfolio, a more meaningful way for employers to evaluate them as job candidates.
- Just cause something’s recorded, doesn’t mean it has to be perfect. Perfection is the enemy of the good. Use online video to explain things, and break those explanations down in bite sized chucks.
- Everybody has something to teach. Crowd sourcing knowledge online has real value. The challenge is enforcing standards. We may find that crowd-sourcing combined with content curation is the answer.
The other big challenge, as I see it, is getting students to actually watch the content, particularly in today’s online environme with so many distractions. Sal says the relationship between the on-demand content and in class content is the key and suggests wrapping projects and in class discussions around the on-demand content.
Still, I think it might be tough to get someone who is disengaged due to personal or family issues to find the uninterrupted time, which in-class sessions guarantee, to consume the on-demand content. But that’s another issue entirely.
Anyway, I really enjoyed the Hangout. Thank you Sal, Peter and Sebastion for taking the time to make the video. It definitely helps me sort out my thinking on how best to use technology to conduct social media training.
Categories: elearning, gamification
Dec 13, 2011
The biggest search and social networking companies to date were born in America, so it’s easy to be seduced into thinking that the American way of doing things online is the best way of doing things online. But most netizens today are not Americans.
The majority of Facebook, Twitter, Linkedin users reside outside of the US. And in many of those places, commerce is not necessarily the primary objective of business. In some countries, the ambitious are suspecting of undermining the public interest. Profits are like air. You need it to live, but it is not the purpose for living. Surely, you can’t deny that in the US, there are corporations that profit at the expense of the greater public interest.
Maintaining sensitivity to cultural nuances outside the US is key to successful online communications. SXSW, the annual mecca for the global tech community, draws an international audience. But it happens in Austin, so the global perspetive is diluted through an American lens.
Le Web on the other hand, which happens every December in Paris, showcases the global tech scene through a distinctly European filter, which is extermely valuable to communicators residing inside the US. Produced by Loic and Geraldine Le Meur, it is the fastest-paced, most entertaining of the tech conferences — with the best food and the higest production values — and packed with hard newsbreaks.
Here’s some of the announcements at this year’s conference:
- Release of the new, new Twitter with a new algorithm “discovery feed”
- Live demo of Ice Cream Sandwich, the next Andriod OS, with desktop widgets and facial recognition
- Facebook’s committment to HTML5, even though the BRIC nations won’t have the infrastructure to support it for years
- Uber’s $32 million in funding for an app that makes cars services in most major cities available via mobile
- Evernote’s deal with Orange which will give customers access to the premium version for a year for free
But the bigger, more strategic lesson I got came from experiencing the emerging online tech sector in a mature market like France. Consider the history. The French government has long been regarded as overly bureaucratic, contempous of corporate greed and downright arrogant. Here are a few examples:
- Just a few days ago the Autorite de la Concurrence slammed P&G and other soap companies with huge fines for price fixing
- Wirelss broadband is simply not available from any local provider in Paris without a one-year contract
- Last minute scheduling changes at Le Web happen daily. It’s just the way they do things. Shut up and wait.
It’s easy to dismiss the French as aloof. But my take is, they just have different priorities. You may not be able to get online easily, but if you have a medical emergency, they’ll take care of you for free, with or without insurance. The French also have a much lower tolerance for anticompetitive practices and revile unchecked corporate power. They seem to legitimately want to put the public interest before commerce. It’s a noble goal. You don’t get ripped off on soap and you can get healthcare when you need it. But it doesn’t always work, especially when it stymies innovation.
In his keynote, Google Chairman Eric Schmidt said the role of government is to equip citizens with reliable, fast and affordable wireless and stationary broadband, so they can innovate themselves out of the current economic funk. Rome had roads. Then came highways. But today, if you want to spur innovation and commerce, you need high-speed broadband.
Easy, cheap access to the Net in Sweden lead to a number of breakthrough technologies including the peer to peer file sharing, which led to Skype, and more recently Spotify, a social network that lets user share privately, who’s founder also presented at Le Web. Silicon Valley needs a competitor, says Schmidt, and unless you want to live in Berlin or Stockholm, other European governments need to make it easier for people to innovate.
Some say unchecked corporate power in the US has led to an environment where corporations have grown at the expensive of individuals. Last week the Federal Reserve reported said household net worth declined 4% over the summer, while company holdings climbed for the fifth consecutive year.
The bigger lessons from this year’s Le Web is this:
- It’s less expensive that ever to access global markets
- The cost of doing business keeps coming down
- The size of the market keeps expanding
- Access spurs innovation
- Incentives spur commerce
But cultural differences really do matter. Different cultures have different expectations which anyone selling to a global audience needs to be mindful of.
I rented an apartment in Paris through AirBNB while attending Le Web and after getting locked out, l was challenged to overcome a difficult situation without anyone to advocate on my behalf in a timely manner. I have since exchanged tweets with the company’s founder Brian Chesky inviting him to discuss my experience at On the Record…Online, and spoken to the company’s staff, but no one appears to be willing to talk to me on the record about my experience.
In my next post I’ll write about my AirBNB experience. I’d like to acknowledge AirBNB’s point of view of in my post, so I hope Brian, or someone at AirBNB, will agree to a constructive, civil dialogue about my Paris apartment rental experience.
Categories: Facebook, location based, marketing, mobile, social networks, socialmedia, Uncategorized
Dec 07, 2011
Fashion designer Karl Lagerfeld (@Karl_Lagerfeld) will offer a new couture brand “Karl” direct to consumers via the web, and has put up a sign-up page with details here.
The new line will be available through Net-a-Porter as soon as Jan. 25th, it was annouced today at Le Web 2011 in Paris, says Lagerfeld, a self-professed “paper freak” and an early adopter of technology who sketches on the iPad, his 4 iPhones and hundreds of iPods.
Despite his decision to announce his new brand at Le Web, Lagerfeld says he hates promotion. “It’s what people do with my name,” says Lagerfeld, who learns by doing and says in a world where we have access to information, it’s very easy to inform yourself.
Why promote, when you can do? If you do something interesting, people will find it and share it on their own. I love that point of view. I think it’s the future of social media.
Why use social media just to market products, when you can use it for all public communications and leave behind shareable moments? But Lagerfeld doesn’t have time to share on social networks himself. “Just because you’re over connected, does not mean you’re well connect,” says Lagerfeld.
Categories: Uncategorized