Is Social Media a Fad?

In a January 19, 2011 InformationWeek article, Rajan Chandras posits whether the “Social Network Frenzy Signals Another Tech Bubble.” In short….No!

Before I get to why the fundamentals of “core” web 2.0, social media, social networking (insert your favorite buzzword here) are sound, it is worth getting the valuation issue off the table. I have been telling colleagues for months that I think the valuations on some of the high profile web 2.0 companies are absurd. In order of absurdity, I’d list Groupon, Twitter, then probably Facebook.

  • Groupon will go down as one of the biggest investor heartbreaks in history. They walked away from $6B!!!! cash from Google, instead taking $900M in venture money in advance of testing the public markets. Some argue they can afford to do it because all the founders/early investors are now playing with house money since they cashed in early. Still….bad, bad bad. That business is going to get killed, in my humble opinion, not by one competitor, but death by a thousand cuts from the likes of: LivingSocial, Woot, Yelp, Amazon, Tippr, WhitePages.com etc etc etc etc. Anecdotally I don’t know anyone who gives a damn about where their deal-of-the-day comes from. Whoever has the best deals will get the traffic. Some argue the data aggregation and analysis Groupon can perform is what provides the core value. Nonsense! This becomes a commodity function for any reasonably performing coupon shop in the space. Short the stock.
  • Twitter: It’s not a two-way communications tool! Email and Facebook are far more effective and appropriate for point to point messaging. Virtually no one cares about minute by minute updates of people’s lives and thoughts. Twitter is a solid broadcast medium for sharing learnings and information with a wide audience. There is some really good analysis of why the user demographics on Twitter are limited….they spell long-term trouble. Teens, for example, never use Twitter. Additionally, star power was an early driver for Twitter traffic, and the trend shows that all the “A list” celebs have abandoned Twitter like a loser agent at CAA. Again, short the stock.
  • Facebook: Clay Shirky has some really good material on how “new media” is transforming society. It’s not a fad by any measure. Simplifying his research for purposes of this post, after the industrial revolution we divided our days into roughly 3 day-parts of 8 hours apiece: work, sleep and personal time. Old media (magazines, movies, radio and tv) took up the lion’s share of that time over the last 5 decades. The media business was largely built around ad sales. (subscriptions, movie tickets etc are another element)

Old media was one-way. Producer to consumer…no conversation, reaction etc. New media opened up two-way communication between producers and consumers. More importantly, it made production of content easy enough for anyone from 5 years old to 95 years old… amateurish content in most cases, but it didn’t matter. The low cost of content production (a computer or phone) meant there didn’t need to be a financial ROI in most cases. People just want to be heard, to share, to participate. Our pent up desire to be social was unlocked. (there is a very similar social argument for the rapid growth of bricks-and-mortar companies like Starbucks by the way)

[As an aside, new media has been largely focused on consumer orientations or that 8 hour slot of time mostly identified as “personal” time. Increasingly, companies like I’m involved with are taking many of these same tools/models and applying them to the 8 hour time slot reserved for our work-life….(alternative term = vertical markets)].
The revenue model around this new Internet phenomenon is very UNLIKE the Internet bubble of the 90s. The traditional media dollars are being completely re-oriented away from the static one-way entertainment model to a dynamic consumer driven model such as that exemplified by Facebook. Ad dollars are still higher on television than on the Internet despite more aggregate time being spent on the latter.

By the way, the InformtionWeek article referenced $1.2B in revenue for Facebook. The most recent reports have them hitting $4B by year end. While this is not efficient given 600M+ members, but it’s nothing to sneeze at either and it’s early.

The InformationWeek article hits at the very essence of the shift going on in technology and society. Is it a fad? While many of the business models out there are fluff, and there will be far more losers than winners, there is a fundamental shift underway and a huge and real revenue opportunity that goes beyond ordering groceries online and the Webvan busts of the 1990s. (a model that is now working extremely well for Amazon and others by the way)

Social Media Burn Out?

Over the past several weeks I have been a part of discussions with both physicians and non physicians commenting on how social media has overtaken their life. They feel compelled to connect to Twitter morning noon and night. They get sucked into the constant need to post to their blog, they live and die by Facebook updates, Foursquare check-ins and on and on and on.

Technology is supposed to serve us, not the other way around. Social media is no exception. While most of you are just starting to explore social media in all its forms, keep in mind the boundaries you want to attach. It can quickly suck you in.

I am embedding a post by Guy Kawasaki from a few months back in which we highlights his own issues with social media addiction and showcases two products to help tune out from time to time.

Shoot me a note with ideas that have worked to help you maintian boundaries or share how you’ve been engulfed. Either way, your colleagues will find it interesting.

From Guy Kawasaki – How to Find Freedom

Let me confess: I’m addicted to Twitter and email, and my addiction increases the more I have to do something important like write a book. Luckily, I stumbled across applications called Freedom and Anti-Social that really help. I explain how they works here at the American Express Open Forum. If you’re having a tough time prying yourself away from online fun, they could really help.

8 Items Driving This Blog

Starting to today I will begin sharing thoughts, research, insights and quality third party content with anyone who cares to read. Most often my subject matter will be focused on health care, technology, social media and the intersection of the three. Occasionally I’ll veer into other personal interests such as wine, politics, history, flying, restaurants, golf and general business.

For the past year I have been passing along what I consider some of the most useful content on the web using Twitter as the medium. Like any form of communication, Twitter is not well suited for all things. I recall a comment made by @KevinMD in which he described Twitter as a “headline”. While Twitter is effective for “learning” and passing along bursts of thought or links to content, it does not facilitate fully formed thoughts.

As a result, I decided to launch this blog.

Of particular focus on this blog will be the effective use of technology and social media….most notably for physicians.

To ensure readers have a sense of the lens through which I write, here are 8 Items Driving This Bog:

  1. My professional time and focus is on the success of physicians and the institutions around them.
  2. My estimate is less than 2% of physicians are remotely engaged with social media….I am not writing for the 2% for the most part. I want to reach the 98%.
  3. While I admire “e-patients” and all the talk and activity around patient involvement in health care….it is not my expertise or focus. There is inevitable overlap.
  4. I have been professionally involved with social media for the past 4 years and have been deeply involved with technology for over 20 years. I live it.
  5. Over the past 10 years I have been privileged to work with thousands of physicians all over the country in every practice setting and specialty. My efforts have been directed toward technology enabled solutions that serve MDs/DOs.
  6. I consider physicians the most important component of our health care delivery system.
  7. Social Media is new and dynamic, so the rules and best practices are not yet set on stone tablets. That said, there is a lot of nonsense, hyperbole and blind enthusiasm in the space. I aim to guide physicians, whose time is incredibly valuable, away from said noise.
  8. Everything doesnt need or have an “ROI”… some things we just do because they are fun.