Instagram Acquisition Brings Bad .com Flashbacks

InstagramAcquisition

You probably thought my Instagram post would be about the evils of Facebook, but instead I wrote a post with Jennifer Leggio on Forbes about how to survive a tech bubble. No matter what impact the Instagram deal has on my personal social media (and even on the fledgling network), what is becoming clear is a return to dangerous financial valuations for venture-backed tech start-ups.

Paying $1 billion dollars for a 12-person company with zero in-bound revenue makes absolutely no sense. Even worse, the acquirer Facebook is a company that expects a $100 billion IPO on $1 billion a year of net revenue. It’s clear we are in the midst of another tech bubble. That’s why Jenn and I wrote our somewhat cheeky survival guide.

During the .com era, I was in the middle of the boom as a mid-level manager. I remember getting laid off with the rest of the marketing staff at IPNet Solutions in 1999 (I served as media relations manager), just three weeks before our shares vested. The catch? It was done on my cell phone in two minutes flat while I was on vacation. Nice. Four years later, IPNet was acquired for an undisclosed amount (e.g. a mercy kill).
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CONTEST: Social Business or Social Bullshit?

bull riding
Image by Emmett Tullos III

The sales pitch for social business (see IBM’s definition) has spread from the technology industry to the social media echo chamber. Social media tools will bring a promised evolution of business, but how much of this buzz is bullshit?

Recently, Jason Falls and I visited Dell’s social media command center. We were both impressed with the company’s deepening commitment towards social as a means to facilitate better relationships across the enterprise. Clearly social-media empowered business can become a reality.

At the same time when you start seeing social media experts across the blogosphere setting up social business shingles, you have to wonder. Am I being sold the real deal or just another dose of unicorn powered super conversation?

In that vein, I’d like to invite you to sound off. Is social business a great thing, or yet another overhyped promise from social media experts looking to break into the enterprise? The best five comments pro or con (as judged by me on Friday afternoon) will win a copy of Jason’s book, No Bullshit Social Media.

No Bullshit Social Media

C.C. Chapman holds a couple copies of No Bullshit Social Media

To get you started, I’ve listed three reasons for and against social business. Good luck!

Three Pros

1) Perhaps the best argument for social business is speed. Watching Dell’s team respond to situations by integrating communications, legal and more was impressive. By empowering and encouraging interactions through process and social technology, businesses can better respond to customers and situations. Speed is a competitive advantage in any market.

2) One of the best comments from the Customer Is Not Your CMO came from Ben Kunz, who noted there are three ways to become a great business. One of them is to become completely customer centric. Social business empowers widespread dialogue across enterprises all the way to customers and other stakeholders. This in turn creates the opportunity to become completely customer centric, from sales to operations.

3) While companies like Walmart are leading the innovation wave amongst traditional consumer enterprises, technology players like Salesforce.com, IBM, Atos and more are acquiring social technology companies, changing their cultures, and moving towards the social business ideal. The technology industry is eating its own dog food and leading by example, just as it did with blogs and other initial social media a decade ago. History is repeating itself.

Three Cons

1) Social media experts are beating this drum loudest, and that triggers a big red flag. Many social media experts don’t know marketing basics, and in some cases refuse (or can’t) to deliver return on investment. Now they are suddenly telling the business world how everything must change. So, someone who knows how to game Twitter suddenly understands how to run a multimillion dollar enterprises? Social business sounds like the pedantic ramblings of middle managers ad consultants trying to justify a bigger piece of the pie.

2) Businesses still struggle to integrate social media into marketing, yet, in large part because they don’t see the value. According to a survey of the CMO Council, 66 percent of marketing organizations are not integrating social media into their full marketing outreach.

Facebook Marketing Q5

Social media’s best chance of becoming a part of the regular business mix is through the auspices of the marketing department. But don’t expect it to change everything and transition the CMO’s office into social marketing. Social will only play its role within the larger multichannel experience.

3) The word social doesn’t mean anything anymore. It’s gone the way of other cliched technology and media terms, like “2.0” and “.com”. So what are we really talking about here? Widespread social media throughout an organization revolutionizing business structures?

Isn’t this the revolution of email and intranets argument again? Sorry, but while those technologies facilitated better communications and workflow, and evolved businesses, silos stayed silos. Why will commenting faster and quicker change power dynamics between departments and people? Will social technology fundamentally change people? It hasn’t so far. This argument lacks substance.

What do you think?