Social Media Might have Value, After all -- If you Understand How to Use it

As a skeptic about the value of social media for most entities, I am now prepared to disagree to some extent with the perspective expressed by many entrepreneurs in the today's article in the Wall Street Journal called "Entrepreneurs Question the Value of Social Media". In the article entrepreneurs have been disappointed in the cost/benefit of social media campaigns. They thought they could accomplish the same kind of impact an expensive ad campaign.

The misunderstanding about social media that leads to this disappointment is that many believe they can emulate the impact of a big, expensive ad campaign by using social media. There are always exceptions to every rule, but we at Roeder-Johnson believe this is the wrong way to look at social media. Once in awhile a company will be able to mount a relatively inexpensive social media campaign that gets them much more attention than they would get for the equal amount of ad spending. But most of the time, that kind of thing doesn't happen.

So what is the value of social media?

The Value of a Blog
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There are certainly some blogs that have become the "modern day press". That is, they include headlines and journalistic (or not) articles that a lot of people read and provide news that is broadly disseminated. Some examples of that in the technology world are TechCrunch, VentureBeat, GigaOm, and others. There are also some in the general press that serve that purpose.

That's not what we are talking about here. For most entities a blog can fall into one of two categories:

*For most organizations, a blog is what we call a "living brochure". It provides customers, audiences, influencers, etc. an ongoing perspective on the views, facts, experiences, questions, etc. of an entity. As such, reading the blog can give interested parties a much greater and more timely understanding than a document or two that are created once a year.

*Some of these blogs can also serve a slightly broader role of helping to educate key constituents about issues of broader interest. These are blogs that might influence a well-informed special interest group, but wouldn't necessarily get really broadbased attention.

The Value of Twitter (or microblogging) is as a replacement for the "Trade Press."
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A lot of people I know are VERY skeptical about Twitter. I am too, mostly. However, the real point about microblogging is that it is unrealistic to expect everyone to have the impact that Ashton Kutcher accomplished.

*But we believe that the real value of microblogging for small businesses and other emerging entities is as a replacement for what has been traditionally known as "trade press". Because of the fundamental breakdown of most media economics, it has become harder than ever to get to special interest groups. We believe this is where an important piece of microblogging is going. And when coupled with a helpful blog and/or an effective web site, it is likely that it can create a pretty effective way to influence key audiences. By the way, we don't suggest that Tweets should be meaningless blather. But rather should be 140 character calling cards to provoke new and interesting ideas and appeal to key targets. A well implemented Twitter strategy is just as strategic as any other kind of communications.

Admittedly, this is an education in progress. We will keep you posted as we think we learn more.

Lessons of the Incas: Necessity is the Mother of "Innovation"

I just returned from Peru. It was a wonderful trip. And, as so often happens when I travel, I came away with some sort of "aha". While these trip-related insights may not be earth-shattering realizations in the grand scheme of things, they are always a great reminder of some basic lesson.

The Lesson of the Incas was a reminder that necessity is the mother of "innovation" (Yes. The wording is slightly changed over the common expression.) It was amazing to observe how advanced the Incas were so many centuries ago. This was particularly obvious in the very sophisticated techniques they had for agriculture. They planted in terraces to optimize the use of their land and then created an irrigation system to fit the demands of these terraces. And there are theories that the Incas created a deep circular terraced crater at Moray in order to provide different micro climates for various crops that were important to their survival. This is just an amazing idea!

I am not an expert on the Incas and won't try to defend these innovations or explain them deeply. It's just that the whole experience reminded me that some of the most effective innovations come in direct response to fundamental needs.

The question this raises for technology start-ups is how can this lesson be applied to optimize innovation today. For the most part, there is no survival issue driving much of technology development, whether it's building a better iPhone, social networking site, or whatever. (That's quite a bit less true of green tech and medical technology.)

We could have a long discussion here about "Maslow's hierarchy of needs" and recognize that today much of the technology work is past basic survival and have moved up the hierarchy. But the drivers are no less important. I just don't think that's true.

So, the question I took away from the Incas was: how do we fuel really important innovation in an environment where our basic survival doesn't depend on this innovation?

Leadership and the Importance of Press Releases

Who knew? The last post on "What about Leadership (Redux)" led to a fair amount of dialog. It also led me to believe that I should probably advocate an unpopular subject: the importance press releases.

In short, we believe that a well-crafted press release is a big opportunity to clearly and effectively tell a company's story. And that's true whether the news hook is mundane or earth-shattering. Along with the many other means of communications available today, press releases are part of the entire communications architecture.

This is, to some, a fairly radical view. Many "modern" communicators think that whispers, blogs, and tweets are the right way to get a story told. We believe all of these are a valuable part of the mix. But we also believe that it's critical to lay out the story clearly and simply in a few places that are broadly available. Therefore, more than ever, we think press releases are a tremendously important communications tool.

In thinking about this position, you may be interested to know that, in years past, I have been very conservative about press releases: when they were just a tool for communicating to a very limited audience, it was key to make sure you didn't flood people with paper. But today, the press release plays a different and more important role:

1. It is a tool, at the appropriate time, to tell a company's story to the appropriate audiences. It should be written clearly and without hyperbole.
2. It can have a viral benefit.
3. In this environment, many constituencies look for and read press releases (not just press and analysts) and this can be helpful to companies on many levels.
4. It can be very helpful in reinforcing leadership messaging and communications architecture.
5. There are lots of other comments -- let me know if you want to discuss them.

This odd topic arose because I have recently seen a few companies that may be squandering their opportunities to help the market understand who they are and how they fit into the world. Hence, these companies may be leaving their market leadership position unsupported and unexplained -- leaving it to chance that the market will figure it out. And, on the flip side, we have seen when we are working with companies who are leaders, the ongoing explanation about important news and nuances of their stories helps the leadership positioning emerge over time.

A few thoughts/caveats about this viewpoint.

1. A press release should always have added value. That is, it should be interesting and provocative.
2. We are not talking here about press release that have two paragraphs (one with the lead and the second with some innocuous quote.) If you are going to bother, explain enough to be meaningful.
3. The purpose of a press release today is not always just to get "ink". It should be viewed as an important part of the toolset to create leadership in the long term.
4. Of course, press releases alone are not the whole communications mix. They should be built into the plan along with thoughts about the Web site, blogs, tweets, conferences, one on one communications, etc.
5. Some press releases are tactical in their nature. That's fine. But never squander an opportunity to tell the story well.
6. Keep the bar high. Don't tell people "what the CEO had for lunch."
7. A press release should be objective and educational; the more boastful, the less believable.
8. Yes. Some recipients might be skeptical of a press release. Sometimes that means you shouldn't do it. And sometimes if means you just have to move ahead and keep the long term in mind.
9. A well-conceived press release takes a lot of work -- to understand what the news is, why it is important, and how to explain this clearly.

Remember, the goal is leadership. (Oh yeah. I already said that.)

But what about leadership? (Redux)

Ugh! Over the past few days there has been a lot of communications about an article in the New York Times about PR in the Silicon Valley. First, there was the original story, then there were a variety of follow-up pieces commenting on it. Not surprisingly, though pretty amazingly, this discussion was really about "publicity" and none of the discussion (that I have seen) has focused on what we at Roeder-Johnson believe is the key issue: the question isn't publicity, "ink" or "buzz"; it's about LEADERSHIP.

At Roeder-Johnson, we believe that the goal of our strategic communications and public relations efforts is to help position clients as market leaders. That's really different from short term "buzz" or publicity. We can all think of companies that have gotten plenty of attention (either in the press or in the "buzzosphere") and ultimately didn't attain leadership in the long term.

What are the benefits of leadership? The most basic benefit is to enable a company to define its environment, rather than following others that do the defining. And resulting from that core benefit are some fundamental business benefits: companies that lead can:

-Charge higher prices
-Enter into better partnerships
-Hire better employees; and ultimately,
-Lower the cost of capital of the company.

So you probably wonder how leadership is attained if it doesn't come from buzz. We believe there are a few key steps needed:

-First, there is the decision by the company that it wants to be a leader and in what way.
-If the choice is made to target leadership positioning, we believe a basic architecture needs to be defined for how the company wants to be perceived in the long term.
-That architecture includes many dimensions -- from business and product strategy to thought leadership and communications strategy.
-In the communications realm, the first step is to put some language around the vision. We call that a High Concept(R): What is the fundamental disruption we represent and how is it simply articulated?
-Following this, it's key to understand how will we get people to understand the high concept: the need, the requirements and what it will take to accomplish the vision, why the company is in the position to accomplish it, and how it plays out for the long term.
-Then, on an ongoing basis, the communications strategy is implemented and refined to help lead the market to understand the High Concept.

This is a very short description of an alternative view to the conventional wisdom about public relations as publicity. I want to note that ink and/or buzz is certainly a part of any communications strategy. But it is NOT the end in itself.

Start Ups Need to Avoid the "Susan Boyle Effect"

I have been intrigued by the story of Susan Boyle on "Britain's Got Talent." It was hard not to be interested in this shy woman who has the potential of realizing a life-long dream by singing her heart out. And, I admit, I have followed each of her ups and downs over the past few weeks. It's not really surprising that she has "buckled" under the pressure of all the public attention that has come her way.

This "Susan Boyle Effect" is not disimilar from a phenomenon that most start-ups need to be careful of: coming out with such hoopla that they can hardly do anything but buckle under the pressure and ultimately disappoint the expectations that have risen far too high.

By nature, start-ups are somewhat like the shy woman from Scotland. They have the stuff but have not been real-world tested under the glare of Klieg lights. We can all think of a number of examples of companies that have come out with too much attention and then because of the market interest and expectations, they ultimately were unable to meet the demands were placed on them. And they became exhausted in the process of trying. Or worse, the first impressions they made on people were unsatisfactory and they couldn't get customers and influencers to come back for a second look.

There are a few companies that have defied the odds of lots of attention. Google comes to mind and was amazingly able to withstand the pressure of vast relatively early attention. We are all living through the pressures that Twitter is under and the jury is still out on whether they will hold up (though in spite of some technical problems they have done amazingly well). But in general, we recommend a modulated plan for emerging from under the radar.

How should a company do this? Of course, it's different for each company. However, in general, we recommend building credibility and infrastructure and consistently raising visibility. This process enables a company to accomplish its business needs steadily while at the same time building up the strength to support market demands.

I hope Susan Boyle bounces back. Regardless of the next step, she will undoubtedly be wiser.

Speeding Along in the Real-Time World

David Brooks wrote a very interesting piece in yesterday's New York Times called "Greed and Stupidity" about the current financial crisis. I won't comment here on the specifics of his view of the crisis. But he had a very interesting comment in the article that got me thinking:

"To me, the most interesting factor is the way instant communications lead to unconscious conformity. You’d think that with thousands of ideas flowing at light speed around the world, you’d get a diversity of viewpoints and expectations that would balance one another out. Instead, global communications seem to have led people in the financial subculture to adopt homogeneous viewpoints. They made the same one-way bets at the same time."

We have all been made increasingly aware over the last decade of the implications of the world being flat. But i don't know that it was quite so clearly articulated that one of the side effects is, in fact, increased "lemminghood" (my term for Brooks' more polite "unconscious conformity"). But it is certainly the case. I have been concerned about it when reading poll numbers -- they reflect the perceived direction of the moment (sometimes this is valuable and sometimes it can be misleading); it's certainly impacted and been impacted by the news media and what's popular and what we read about; the speed with which 'fashions' come and go; and there are many other unintended consequences of real time communications.

So what is the impact on technology start-ups?

*First, now more than ever, young companies cannot afford to be slow in their decision making. This has been true for as long as I can remember. In small companies, there has never been room for misdirected use of resources for long.

*On the one hand, it is important to listen to the market and ferret out what can be learned from the constant access to information and opinions and real-time responses. This is a very powerful tool.

*But, on the other hand, it's critical now to be clear on your goals and have the "intestinal fortitude" to stick to them. We have always believed that "looking over your shoulder" is a very distracting activity for any company, especially start ups.

*The real time world is one in which entrepreneurs need to have a well-honed sense of balance between their fundamental views and outside input -- both of which are key, when you have an instinct about which to heed when.

Welcome to the Time of Opportunity

It may not feel like it, but we are living in an era of tremendous opportunity. While this blog made this point before, I was reminded of it in reading a very interesting article called "Coke? Oreos? That's so last year" on MSN Money. The message of the article is that in these lean economic times, consumers are rethinking their values and often choose generic brands over "name-brands". The article gives examples of how this has been an opportunity for small, lesser known consumer-products companies that provide value rather than fancy packaging.

The consumer-products opportunity here is along one primary axis: cost. We believe that while the cost axis presents an opportunity for technology companies, there may also be other axes along which new opportunity can be seized in more sophisticated markets.

Simply put, we are living through a time of great market disruption. In the case of consumer markets, this means that brand names no longer necessarily mean success. For technology start-ups, we believe that within this great disruption, target markets may be willing to challenge their traditional ways of doing things along several axes: not only will they be looking for cost savings; but they may, in fact, be willing to change the way they do things more fundamentally to achieve even broader benefits.

Let me give you a few examples:

-We have all read about the success of SalesForce.com. This is not just because of lower costs. Today's market is leading customers to need to try new ways to doing things in order to make their businesses work.

Moreover, we are working with a few companies that are finding tremendous momentum in today's market:

-One of our clients is providing an entirely new way to deploy web applications in the cloud. While there are some cost benefits to its approach, the savings enabled by this company are as importantly in time and complexity as well. They have acquired 25,000 new applications in a matter of a few months.

-Another of our clients has a very low cost 3-D sensor. This means that computers and entertainment devices are able to do much more than make existing capabilities faster or cheaper. They can actually create new user experiences that will bring in entirely new markets and revenue streams.

We can all think of more examples of how companies are able to capture significant new opportunity in this market. We believe it's important to keep your eyes open for these and seize the moment.

A Return to Passion

In his piece in yesterday's New York Times, George Anders talked about "The Secrets of the Talent Scouts". It reminded me of the need/opportunity to return to passion in the world of start ups.

Mike Moritz of Sequoia Capital was quoted in the piece: "The only people who want to start a company in a time like this are the ones with the greatest conviction.”

That's exciting. Because over the last few years, the fever of money-making has, to a large degree, overtaken the passion to "change the world" that has driven start ups for a long time. For those of us who started in technology awhile ago, this passion has been a sentiment that we found missing. It reached a pinnacle (or nadir, perhaps) for me when, a few years ago, I met a very young entrepreneur who, when asked to tell the story of the founding of the company, answered with the following: "Do you want to hear the real story or the one that sounds better?" Ugh.

But now, I suspect such raw ambition without a foundation of passion wouldn't succeed in getting funded. (Yes. There are a lot of venture capitalists who aren't funding those companies either, but that's another story.)

At Roeder-Johnson, we are fortunate to represent multiple companies that have built and maintained their companies on sheer dint of will and the passion to make their visions happen. Turns out they are feeling the impact of today's economy less than a lot of other start ups.

So, what does this have to do with communications? A lot.

We believe that today, more than any time in the last few years, communications strategy and messages need to combine BOTH that passion and vision as well as the basic business case. That is, whether the founders of the company want to make cloud computing instant, a chip that does many high speed communications functions better than any network or general purpose processor, next generation multi-touch and gestural controls, or breakthrough fuel cell materials, the story that the company tells should combine four key elements:

*The inspiration for the basic idea;

*What is possible when this basic idea is realized (and, in its small way, how it might change the world);

*The business opportunities that are opened because of this breakthrough; and
*The passion that will lead to success -- through thick and thin.

It's no longer good enough to have a clever, opportunistic gimmick to make it through the challenging times we face. We have to believe that the change will really happen.

Living in a World of Knobs

Yesterday, Rush Limbaugh is said to have fired up the troops at a major conservative conference. This, combined with a recent dinner with a friend who absolutely believes that the right answer to ALL of today's economic woes is to let the free market solve the problems, caused me to think about whether we live today in a world of many knobs rather than one big switch.

Let me explain.

If you imagine a dashboard for running the world (or the country, if you want a "smaller" picture), the image that would be conveyed to describe Limbaugh's world would be one with a gigantic switch whose two settings are: on one side is "government intervention"; and on the other side is "let the market take care of it". Limbaugh is essentially saying that the latter is the solution.

Alternatively, another dashboard might exist: one with multiple knobs, perhaps divided up by industry or discipline with varying degrees of government and private sector support represented around each knob. This latter is more of what is being used by today's U.S. government.

So what does this have to do with communications? A lot. It's obvious that in the former scenario, communicating the mission and vision is relatively easy. It's simple and clean.

But in the latter scenario, communicating is much tougher. There are nuances that are being implemented that can complicate the story.

However, we believe that even in a world of knobs -- which is likely the world in which most technology start ups live -- it is possible to develop as clean a communications strategy. It's what we at Roeder-Johnson call a "high concept". It requires stepping up above the individual knobs and seeing the single common vision that unifies all of them.

It may not be easy to define the "high concept"; but it is very important to do -- at any time of the market, especially now. We are living through a time of tremendous complexity, where everyone has many knobs they have to deal with every day. This means, for a company to raise itself above all of that fog of knobs, it needs to simplify its message.

Whether you agree with those who represent the "switch" vision of the world, there may be a lesson to take from them.

What's good for GM. . .

Let me just be clear. As a former owner of an EV1 electric car that GM subsequently took back and destroyed, I am not a fan of GM. They have made their bed.

That said, GM (along with the other US auto companies) is currently doing some PR that we can all take a lesson from. In short, because they are trying to convince Congress that their futures are worth betting on, the auto companies are currently very proactively showcasing their advanced technology. For the first time, reporters are seeing a lot of auto advancements that are upcoming in ways they have never been allowed to before.

Obviously, these are emergency measures and who knows if these guys will be proactive technology leaders when their lives don't depend on it. But, here's the lesson:

Don't wait till you are fighting for your survival to showcase your breakthroughs and leadership. It should be an integral part of your ongoing positioning strategy and will have broad benefits in the near, medium and long term.

Those of us with a heritage of working with technology start up companies know that technology is often one of the great differentiators for a young company with very tight resources. This means that initially it captures attention of customers, partners, and influencers, over the mid- and long-term it helps you move forward with customers and partners who need to look to tomorrow, and in all cases, when used right, has the potential to lower the cost of capital.

Of course, technology won't get you all the way over the line. You have to show that the technology leads to advantages that customers want. But it's a really powerful tool.

And by the way, I would contend that in this current economic environment it is MORE important today than in the past few years when "the rising tide lifted (almost) all boats".

Walk before you Run to Win the Leadership Race

For some reason, the last few weeks have been very exciting for me. I'm not sure why, but it has felt like a particularly rich time to add value to companies by combining experience with new ways of looking at the world and communications.

As I have said before, one of the most energizing things going on today is that with the Internet, you can try lots of new things: the rules are different today. Yes. It's important to remember that human behavior is still the same. But you can reach people so much more easily and in so many different ways.

Our whole goal for clients is helping them achieve leadership. But leadership does not have a hard and fast definition. It means that a company is shaping its market, rather than having the market shaped for it. Beyond that general guidepost, achieving leadership can differ dramatically from company to company.

But, at its core, leadership comes from systematically thinking about how the market will be influenced and then helping each of those influencer groups to move forward. So often, we see that while having high profile attention can have lots of benefits to companies; focusing exclusively on that kind of attention can be very damaging to a company truly looking to achieve leadership. Sometimes, the core constituency that is going to lay the foundation for leadership, will actually be offended by too much high level attention too soon.

That's where experience comes in. It's important to figure out the "layers" of the market and build credibility. And, by the way, no two companies or markets are the same: A company in the "material science" business needs adoption by scientists if they are are doing provocative and transformative things; a company in the software business needs to be adopted by developers before the big business impact can happen; a company in the communications chip business needs to be accepted by systems designers before changing things; a company in the advertising business needs to influences both the infrastructure developers and the "clients" to get their idea accepted. And so on.

The real message here is that understanding how to achieve that lofty leadership goal takes some thought based on a combination of instinct, execution, experience, and new thinking. It's valuable energy to invest for a young company to have a chance to define its own destiny.

Yes, my dear, Technology Does Matter

I just read a post by Alex Haislip of PE Hub that bothers me. The phrase that most struck me was "I feel like most VCs I write about repeated the 'defensible technology is all that matters' mantra until it blinded them to any other opportunities."

Where are these VC's? My concern today is that so many VCs lose sight of the need for barriers to entry and just focus on clever business models. And, worse, technology breakthroughs are looked upon with skepticism that they will be too expensive, or worse, never become commercial.

We certainly understand that a viable business model is needed to make a successful company. But what about transformational technology? Yes; it is possible to put too much emphasis on technology, but there are too *few* start ups today with that critical technology breakthrough.

And if that happens, where will tomorrow's new business opportunities come from?