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TechWatch: Social Networking for Business?

One of the hottest areas in technology today is social networks. Almost anyone who is under 25 years of age knows about tools like MySpace and FaceBook. But does this have anything to do with business, or are these applications just toys for the younger set? That’s what we will explore.

Social Network Background

First, a bit about social networks. The goal is to provide a cyber-meeting space for people wanting to “network.” Tools such as Facebook provide a place where individuals (primarily college and university students) can describe themselves and connect with others. Wikipedia reports the following astonishing statistics for usage:

According to TechCrunch, ‘about 85% of students in supported colleges have a profile [on the site]. [Of those who are signed up,] 60% log in daily. About 85% log in at least once a week, and 93% log in at least once a month.’ according to Chris Hughes, spokesman for Facebook.

There are a couple of challenges in this environment. As someone who does not regularly use these applications, I acknowledge surprise at the way some of the students describe themselves. I am not the only one.

“Facebook, the fashionable online college social directory, may be connecting more than fellow classmates. With the growing popularity of the Web site, and the sometimes controversial content on student’s profiles, schools across the country are struggling with decisions concerning administrative and disciplinary actions pertaining to this new technology,” according to Physorg.com, December 2005.

Cyberspace opens the door for predators posing as other students, and has raised the challenge for privacy protection. It also is an employment check for many companies sifting résumés.

MySpace is the most popular of the social network sites, appealing to a more general audience. It was started in late 2003, and now claims 182,000,000 users. And while Facebook and MySpace are the most recognizable names, Wikipedia lists 93 social-network sites (and they don’t have them all).

Connection to Business

There are two ways social-networking tools impact business. First, social networking tools are growing businesses themselves. MySpace co-founders Tom Anderson and Chris DeWolfe were featured on the cover story of Fortune in September 2006. “When Rupert Murdoch paid $580 million for MySpace’s parent company, Anderson and DeWolfe — though reluctant to do the deal — each made millions,” according to the article.

The business of social networks is in its infancy, so the inevitable sorting out is ahead. David Needle argues this point in his Ecommerce article “Pitfalls Ahead for Social Networks,” May 4, 2007. In that article, he raises the question: How many social networks can any individual belong to? The answer will be part of the sorting process.

At the Technology Alliance luncheon in Seattle on May 31, Steve Balmer, Microsoft CEO, argued that the future of social networking is not one large site, but many more specialized sites — a gathering place for bird watchers, book clubs, etc. Looking over the 90-plus social networks on Wikipedia supports this: Classmates.com connects graduates from particular schools and the military with each other and has 40,000,000 registrants. CarDomain connects car enthusiasts and has 1,600,000 registrants. There is Flickr for photo sharing, Playahead for Swedish teenagers, etc.

I am sure there are great stories behind each one of these ventures. Randy Conrads quit a secure job at Boeing in 1995 to start Classmates.com to reconnect people who once knew each other. It is often called the first social network on the Internet. He did it without venture money, and he brought it up by its bootstraps through a fee-based model that most people said wouldn’t work. Randy is involved in another business now after Classmates was bought out, and is able to work virtually, spending half his time in Hawaii. “It was a good business,” he told me.

A Tool for Business

There is a second connection between social networks and businesses that I find even more interesting. Can social networks become a useful tool within a business? A quick tour of the sites might draw a conclusion of “no.” But before passing this judgment, remember the personal computer. When it first came out, many businesses considered it a toy. Even Bill Gates at Microsoft had a slogan for his company, “A PC in every home,” focusing on the home rather than the business market that lasted into the mid-1990s. Yet today, serious business is done on PCs, and there are few companies in the globally connected business world that could do business without them. How might social networking bring business value?

Perhaps the most well known of the specialty social networks related to business is LinkedIn.com. This network, with 11,000,000 users according to its site, provides the way for each individual to connect his or her network of colleagues to their networks of colleagues, enabling exponential growth for my own network. This provides for the sharing of résumés in job search and recruiting, and also allows connections for business opportunities in buying and selling. I have not seen the statistics on how many jobs or new business opportunities have been found through this process.

The opportunity for business looks significant, but I think LinkedIn taps only a portion of that opportunity. A large business needs the capability to link its people internally to share passions, start new projects, etc. How might this get done effectively using social networks?

Zoodango

Here’s where a new entrant in the social network space, Zoodango, comes in. The niche they have targeted is that of business collaboration in three forms. One is the creation and management of virtual business teams. Another is the linking of people in a company around a cause (such as a United Way activity that employees can work on). And a third is in connecting business professionals, as LinkedIn does, with some added capability.

I talked with its founder and CEO James Sun recently. He is 29 years old. This is his third company. He arrived in the United States from Korea with his father with less than $100, and he has become the prototypical entrepreneur. This past spring, he was on the Donald Trump program, “The Apprentice,” vying for the position as Trump’s assistant. He finished second, losing out to the eventual winner in the final five minutes of the final episode of the program. All of this is relevant to the future of Zoodango.

Social Network Culture

I asked him why he felt he could set up a new social network when many already existed. He said, “I did a focus group with students on Facebook, asking them if they really wanted to meet other professionals or other students, who for professional reason were starting a company. They said they did, but couldn’t do it on Facebook. ‘You will be ostracized because you would be kind of the nerdy kid. Culturally, you do not do that on Facebook,’ I was told. So this supports the notion of the need for many types of social networks where people do different kinds of things using different networks.

“Each site has a culture, and that is really important. MySpace is about pop culture. And that’s where people show their wild side. If you want to network with young professionals who are actually movers and shakers and doing some real things in business, that’s Zoodango. Our target market is 20- to 35-year-olds who want to create a company or to be a part of a cause, who want to do something good with their lives. You do not see this on Facebook and MySpace.”

One of the keys is maintaining the culture of the site, he added. “We have two human editors and automated filters that go through every profile. We do not allow unprofessional pictures or swear words. So we keep it real clean by monitoring it. We want people to express themselves, but it is vital that we have a culture of business on Zoodango,” he said.

The Role of Face-to-Face

Zoodango has added another important differentiator as a part of its site. “Everything leads to face-to-face meetings. We are connecting with Starbucks, so that these meetings can naturally form in convenient places. Face-to-face meetings in a neutral place do two things: They are an integral part of building a team, and they act as a natural filter to eliminate those who would misrepresent themselves online,” according to Sun.

When I wrote about virtual teams in the early days of Ethix (December 1999) I made reference to the Team Performance Model developed at The Institute for the Future, but now owned by Grove Consulting. This model describes key activities of a team, and identifies those that require face-to-face encounters, those that can be done through technology, and those that can be done individually. Zoodango has fundamentally recognized this feature of a virtual team, and built it into its social network.

But the Zoodango idea opens up a new dimension to the virtual team that the Team Performance Model didn’t recognize. In the model, face-to-face is the first step to build trust on the team. Social networks suggest that technology may be an integral part of forming teams, even before any face-to-face meetings take place.

Sun talked excitedly about a large company launching a new product. Typically, this starts with a leader assembling a team based on the “good old boys” network, whom he or she knows. A Zoodango model might get people discussing the new product earlier, and the team could form organically, opening new ideas to create a more powerful team.

James Sun is an energetic person. On “The Apprentice,” someone described him as always seeming to have just finished about eight cups of coffee. Through “The Apprentice,” he is now well known and well connected. The best technology is not the only factor for winning in the marketplace. Leadership, recognition, and good timing are also factors. Zoodango seems to have many of these going for it, and it will be fun to watch the progress of this company.

Conclusion

In 1999, four authors created a strange and often irreverent book, The Clue Train Manifesto. There is a review of this book under the InReview section. The essence of their argument was that most people have misunderstood what the Internet is about. We thought it was about communication, finding information, or buying and selling. But the real emerging value of the Internet is about collaboration. And they predicted new types of collaboration will come from technology-based interaction that will change the rules of the game once again.

Perhaps the growth in social networking tools is finally achieving the realization of this forecast.
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Al Erisman is executive editor of Ethix, which he co-founded in 1998.
He spent 32 years at The Boeing Company, the last 11 as director of technology.
He was selected as a senior technical fellow of The Boeing Company in 1990,
and received his Ph.D. in applied mathematics from Iowa State University.

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