The leading Crowdfunding consultancy

The Web, The future of Business and Being Prepared

On Wednesday FutureLearn was launched in the UK. An ambitious initiative which sees a group of Universities entering the MOOC (massive open online courses) learning space offering a range of free courses in flexible formats through a variety of devices.

It’s an extraordinary development and is the logical extension of initiatives like the Open University which tapped into the technical innovations of its time with TV led teaching, distance learning and videotapes.

A fascinating range of courses are on offer, on subjects as diverse as Richard III, Game programming, Branding, Higgs Boson to teeth photography – yes, there is one on teeth photography, I didn’t make it up.

But one that caught my eye is perhaps oddly a nod towards the FutureLearn initiative itself. Called “Web science: how the web is changing the world” it is offered by the University of Southampton and describes the course as being about “how the web has changed our world in the past 25 years and what might happen next.”

That could be fascinating and I hope it looks at the extraordinary impact and possibilities that the web has had on the world of business.

In much the same way as some of us can look back over a period of development in innovation in the delivery of education, we can also reflect on the transformation in our business lives brought about by social and collaborative technology. In my first role in business, at a 50 seat firm more that 30 years ago, we had two phone lines into the building and a manual switch board who might place a call for you if you asked nicely. Manual typewriters, routine casual sexism, bad ties and rigid hierarchy were all de rigueur. Suggesting that everyone in the firm might have had a phone on their desk would have been quickly dismissed as the ravings of a lunatic, had we had the opportunity to speak up about anything. What would my old boss have made of smartphones, social media and wikis? Doesn’t bear thinking about.

But the developments are never ending. Crowdsourcing, crowdfunding, open innovation, social business, collaborative consumption, the makers movement and social knowledge are all founded in the possibilities for interaction and collaboration that technology provides. They force us to rethink many of our most soundly held thinking about how business is done, and consider how the previously uneconomic becomes suddenly economic, the impossible possible and the unthinkable thinkable. This constantly innovates new threats and opportunities for all business on all sector and all locations.

In such a fast moving and disruptive environment it can be hard to keep up. And that is where we come in. We are constantly investigating the emerging waves of the digital business world and love to help our clients understand, innovate and thrive in a world changed and enhanced through the advent of social and collaborative technologies and the cultures that underpin them.

We don’t predict the future, we just help guide people through it.

Crowdfunding and Social Networks

Crowdfunding and Social Networks

Last week we were invited in Brussels to give a presentation at a major  event organised by the European Commission, DG Internal Market and Services to explore issues, potential and risks related to crowdfunding. The event, Crowdfunding – Untapping its potential, reducing the risks – was the first coordinated by the EC and saw the participation of many important players and experts in the field. Our presentation was focused on the role of social media in crowdfunding and the interrelation between the two. Below the major points touched during the presentation. 

The crowdfunding evolution has been developing in parallel with the social media revolution

We’ve approached crowdfunding as a product of social media, and we’ve always been looking at it mainly from that perspective. Social Media reduce some geographical and mental barriers allowing for the rise of crowdfunding, and then served as a tool to facilitate it. The idea of ??collecting funds from various donors or investors is certainly not new, but crowdfunding goes far beyond this, and it does so by adding the power of social networks to collective funding.

Of course, the viral reach of social media has a great impact, but it’s not only about that. Crowdfunding is also about community, engagement, participation, empathy, all enabled and fostered by web 2.0 technologies.

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A new mindset and the sense of empowerment

Crowdfunding is a phenomenon which emerged from and is facilitated by the new behaviours and the mindset that come out from the constant and almost invisible interactions happening online everyday. These interactions are allowing for a continuous conversation with our “peers” at a global level, thus helping on one side to increase our knowledge of society as a whole, on the other side to grow a sense of identification with the crowd, and to get that validation from the masses that empowers us to do something that we would have never thought ourselves to be able of. Everybody can be an inventor or an investor today. Whereas social media lowered the barriers to access (and production) of information, crowdfunding lowered the barriers to access (and sharing) of capital, fostering a democratisation of innovation and philanthropy.

New expectations of return

This mentality explains also the emergence of a new type of transactions on a web 2.0 environment, transactions that are not always activated in order to buy something. In many cases the expectations of return have changed. Already with the emergence of crowdsourcing we have seen the birth of economic models based on reputation and recognition rather than on money. With crowdfunding the same can be true: the rewards are often non-monetary and, in most cases, they represents a collective return rather than an individual one.

Social Proof, the value of relationship capital and the viral power of social media

In crowdfunding, relationships are important, all the social ties, weak or strong, that we have online and offline. We refer to them as social and relationship capital, the first being measured in quantity (so how many friends, fans, followers we have), the second in quality (actual interactions, conversations and reciprocal trust). Again, social media plays a great role here, lowering geographical boundaries and allowing for more of those ties to emerge. Now the social networks of entrepreneurs can be much wider, and this is fundamental to crowdfunding. Social ties provide a signal to the public that the project is worthy, it’s the so called social proof: we all tend to look to the actions of others to guide and validate our actions. When we fund a project, we are more ready to vouch for it and to engage some of our most immediate networks. And so do our contacts. And social media gives an unlimited potential to the expansion of the networks.

Social Media provide the right tools to go beyond our most immediate circle of contacts and get to a broader group of strangers. The strength of weak ties, or social capital, can have a value, especially in the aggregate. But the role of strong ties or relationship capital is often bigger: they are the first helpers, building trust and providing proof of legitimacy to a project, they validate it for late-supporters. The networks, and crowdfunding, expand to the rhythm of community advocacy.

Trust, transparency and crowd validation

The vicinity, the sense of identification and confidence brought in by the continuous interactions on social media also allowed for the rise of a new value: trust. Trust is established because we know each other better, we interact with each other every day, and because all the social media infrastructure allows for a transparency that has never been experienced before. Trust tags are vital to crowdfunding because trust is also what can transform a social tie in an economic tie. Trust, enabled by transparency, in turn facilitated by all the social media infrastructure, is a new currency in economic transactions.

Trust is also what allows to a large extent  this environment to regulate itself. Crowdfunding, occurring in a web environment, generates an obvious worry: the possibility for fraud. But let’s not forget that crowdfunding is facilitated by social tools: the public, transparent nature of it should help identify and stop bad behaviours. Probably, transparency could have a great impact in weeding out fraud, and the use of social and public components in a crowdfunding campaign can provide a high level of protection in what is essentially a self-regulating and self-monitoring environment.

 

Social Capital and Relationship Capital

Social Capital and Relationship Capital

When I started working in the field of intangibles, I immediately learnt to appreciate the immense value of one of the assets that form part of the intellectual capital of a business: the Relationship Capital. The transition from my work with intangibles to working with social media was a natural development for me: I’ve always considered social media as the perfect vehicles to build, exploit and manage intangible assets. The most obvious example is indeed with Relationship Capital: we are promoted by word of mouth reputation, and our networks grow at the rhythm of community advocacy. Social media gives us hundreds of tools and technologies to develop and harness those dynamics, allowing for a continuous and spontaneous social interaction that should add value to our business. I say “should” because it doesn’t happen by itself. Social Media introduced infact another type of capital, the Social Capital, formed by all those contacts, fans, followers that we meet during social wanderings. It’s the result of serendipitous discoveries and occasional meetings and there’s a clear distinction between that and what we refer to as Relationship Capital. The latter is measured in depth and strength, the former in reach and breadth: this often means that the latter rightly belongs to the realm of intangible assets and, as such, it’s hardly measured; the former is measured by sheer numbers, which give us an immediate feedback.

Whereas social technologies are allowing for an ever growing Social Capital without too much effort from our side, Relationship Capital is still to be merited, and it needs the same commitment that an offline relationship requires, if not more. When we meet a new friend, and we add their number on our phone, if we don’t phone them and invite them for a coffee or a walk, their name will be left in our contacts and probably deleted at the next contacts clean-up. The same thing happens online, within the different social networks we’re on. How many LinkedIn contacts do we actually know, and with how many of them have we exchanged a meaningful conversation? Not to speak of twitter followers, or Facebook fans.

I was at TEDx Glasgow at the beginning of the month, and I had similar thoughts about the huge amount of content we continuously share online. Joe Tree from Blipfoto was one of the speakers and as usual he captured my attention talking about the simple and successful concept at the basis of his social network: 200 millions of pictures are uploaded on Facebook everyday, we can only upload one photo a day on Blipfoto. Which one will succeed in leaving some meaningful contribution to human history, and also in leaving us with most memories? Most certainly, the latter. It’s one pic per day, it is personal, we curate it with metadata, we tell a short story about it, we care about it, we don’t just upload 100 pictures a time straight from our phone, and then forget the how, who, when, where and why. In the same way, Relationship Capital has to be derived one contact a time. Who’s ready to say that they have a meaningful relationship with their 500+ LinkedIn connections, 1200 Facebook fans and 300 G+/twitter followers? Dunbar’s numbers are there to demonstrate that we can only maintain a stable relationship with 150 individuals.

So, does this all mean that too much equals to nothing? No, absolutely. Social Capital has got its value, but it’s not the same value as our Relationship Capital. If we think “viral”, if we think of ‘the long tail’, the value of Social Capital can be immense, but the distinction we made above is not just a speculative one, we need to keep it in mind when we develop our business strategies, social media plans, crowdfunding campaigns and so on.

Let’s think about a crowdfunding campaign for example: everybody is telling you that you need a big social presence to start with, which translated means a lot of followers, fans, contacts, etc. But when you launch your campaign, you struggle to hit any meaningful sum. Why? What happened to all those followers and fans, are they really listening? In this case the Social Capital has limited value. A strong Relationship Capital would probably make the difference instead: formed with time, people can associate a twitter handle with an email or a shake of hands, not only with an undefined profile pic. Of course, for a crowdfunding campaign to be successful, Social Capital is important as well, crowdfunding is indeed based on the ‘long tail’ concept, and on word of mouth. But it must not precede the Relationship Capital, it has to go through it, and rely on your contact’s Relationship Capital too. Then, in a latter moment, we might have those serendipitous moments when an odd contact who’s part of one’s own Social Capital will be listening to your tweets. But we can’t base a success on serendipity alone, we can build on dreams not on chances.

We now have the right tools and the right mindset to create a meaningful Relationship Capital. Probably we can do it only slightly quicker, because it still takes time to build a relationship that has some value, but we can certainly do it more effectively, because we can tap into a world of possibilities. Let’s not think it’s all about online interaction, above all because we are still in a transition era, there are people out there who “don’t get it” and probably never will. But we all are social ‘by default’, we don’t need to struggle to go social, we just need to stay so and make the most of it. Then let those 6 degrees of separation do the rest of the job for us.

The Rise of Crowdfunding

The Rise of Crowdfunding

When a word gets shortlisted for the OED you can be reasonably confident that it is seeing a bit of use. This year the word crowdfunding was shortlisted for the US version of that august publication. Frankly we at twintangibles are not surprised as it is a subject we get asked about more and more.

The proposed definition is Crowdfunding: The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet. At its most basic, that definition gets to the core of it, but what that definition doesn’t get into is a more detailed analysis dealing with the role of social media or concepts like the The Long Tail, and how these are key components in successful crowdfunding. But it does at least capture the aspect that is causing the word to become increasingly popular, and that is that it is about raising money.

At a time when the traditional mechanisms of raising funding to – say – launch a business, start a project, or even make a film, are increasingly tough, then people start looking for alternatives, and crowdfunding is one of them.

Seemingly everyday we hear of new projects (even the Krankies are involved in one!) and new platforms to raise finance via crowdfunding. In the US, it is apparent that the Obama administration have come to recognise that it has merit to potentially drive entrepreneurship and job creation and so plans are progressing to adjust SEC rules to make limited equity-based crowdfunding permissible. Closer to home, Brewdog have announced that their recent second crowdfunding campaign has been almost 100% taken up.

So, with all this in mind we are pleased to be able to announce that we have been asked to curate a series of articles and debates on the subject of crowdfunding for the Social Media Week global blog. Over the next few months we will be covering many aspects of this emerging trend and look forward to some interesting interviews, debates and comments. We will keep you posted as to when the series starts.

In the meantime, if you want to learn more about crowdfunding and how to put together a crowdfunding campaign, then you might want to attend our workshop in Glasgow on the 14th of December.

[Images used with this blog are supplied by www.pachd.com]

What is a Social Media failure?

I had an interesting chat with Michael Stelzner of Social Media Examiner the other day on what constitutes a “failure” in Social Media. Mike makes a stack of really good information available through the site and is a good guy to have an exchange of view with.

I said to Mike that, in my view, the term “failure” is problematic. If we were to look at it from, say, an Erik Qualman point of view we might reasonably ask “What’s the success or failure of a phone?” For me the adoption of Social Media, in a business context, is not a binary failure/success issue. This is because the approach to becoming a social business is actually a change of mode and mindset therefore it is more a matter of degree. So in that context an organisation can either do it well or do it badly or somewhere in between.

Doing it badly does not necessarily constitute failure. The concept of success or failure is often associated, in my experience, with a single application of Social Media for, say, marketing and not as a more holistic and changed mode of engagement and operation across a business. Taking the somewhat constrained view of a single application for adopting Social Media is looking at Social Media as a one-legged stool whereas, I believe, it is much more of a multi-legged stool. If we take the misguided “one-legged” view of the application of Social Media then if that application doesn’t deliver against our targets it can feel like failure.

As it happens Mike and I agree but Mike made the important point that lots of organisations haven’t even a single leg to their stool as they haven’t recognised or embraced the adoption of Social Media and that this is most certainly a failure, and he is, of course, spot on.

The other matter it raised was the issue of setting targets and monitoring progress. Again we agreed that many organisations had insufficient monitoring mechanisms to establish their progress anyway as this is a common error. It is important to set out some measures that you are to apply as you set out on the journey to becoming a social business. However the choice of yardstick and scale is a complex one if we are judging the progress holistically and should include both qualitative and quantitative measure. But without these measures it makes it hard to monitor progress and review and adjust to improve along the way. Note I said improve not succeed or fail!

So a quick chat around some commonly used terminology acted as a reminder of a few key points:

  •  Social Media has profound implication and opportunity for how you do business, all of your business,
  • You need to get to grips with this and soon,
  • You should set out some indicators to help guide your progress to a social business.

So, do it now and do it well.

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