Archive for March, 2010

The Strategic Use of Social Data

March 13th, 2010, by Ted Shelton | located in Conversations | No comments yet | trackback
There is a tidal wave coming, or as my friend and colleague Andreas Weigend likes to say, a “Social Data Revolution.” I like the metaphor of the tidal wave because it evokes the image of a force of nature that cannot be stopped whereas “revolution” might fail or be reversed by “counter-revolution.” And I don’t think the change coming can be stopped or reversed.

In the past few weeks since attending a fabulous workshop in Zurich hosted by the Gottlieb Duttweiler Institute I have been even more attuned to the emerging corporate practices in which social data is informing decision making processes. A few examples:

  • A retailer checking to see if your email address is active on a range of social networks as a way of deciding whether or not to clear your online order

  • A credit card company that has realized that customers who have extensive and long standing LinkedIn profiles are significantly less likely to default on their credit cards

  • An insurance company that is making decisions about which insurance claims to further investigate based on the social graph of the claimant

  • An enterprise IT equipment company that has modified its sales lead scoring algorithm to include a variety of factors from activity in social networks and social media

  • An appliance manufacturing company that has reduced the delay in knowing that they have a product defect issue by two months by monitoring online conversation rather than waiting for data from their field repair organization

The list goes on. Companies of all kinds, in every industry and region, are discovering that there is an enormous pool of information — call it social data — that is being created at an every increasing pace from which they can learn more, and make better decisions more quickly.

This trend will only accelerate with advanced mobile technologies. Every individual now has the capability of being a “sensor” in their physical environment, recording and transmitting physical data (location, speed, etc) but also behavioral and emotional data. When people walk into a particular store, say Starbucks, are they happier than before they walked in? How does that one store’s data compare to other stores in the area?

For the past ten years we have been building out a network of sensors in roadways that can transmit data about the speed of passing vehicles and allow us to aggregate that data into a visualization (typically a map) to help us decide which roads we should choose to get from point A to point B. This is an example of data-driven decision making with which we have all become familiar.

Now every person is a “sensor” and is using their computer or mobile phone to transmit information into public (and private) databases. Businesses must learn how to build the analytical models and visualization tools to give their employees the equivalent of a map in order to comprehend this information and use it to make better decisions.

The companies that utilize these tools effectively in their industries will have an enormous strategic advantage over their competitors. The time to join the tidal wave or revolution is now.

The next Facebook

March 6th, 2010, by Ted Shelton | located in Conversations | No comments yet | trackback
Randall Stross offers some useful insights on Facebook and on the phenomena of the “network effect” in his latest NY Times article, “Getting older without getting old.” But he misses the easy one when he writes
Industry watchers constantly scan the horizon for a challenger that could displace Facebook…

The most interesting thing which we should all reflect on in our businesses is the rapid emergence of Facebook from nothing to 50 million users in 2007 to over 400 million in early 2010… and how a bunch of kids have rapidly transformed the business landscape with an idea backed by a little bit of software and the Internet. And how this is happening over and over again in every industry.

The “next facebook” is the wrong question to ask. We should be asking, what is the idea that is going to blow up all of our own preconceived notions of the way our market/industry works and how can the “network effect” be used to create the next amazing transformation? What should you be doing right this minute to change the way your company is connecting with customers, creating value in the marketplace, and changing the way business gets done?

The “next facebook” will almost certainly not be anything like facebook – it will be a new insight into the way in which the Internet removes barriers to our collaborating and co-creating meaning in our world.