Why Twitter’s IPO is looking ridiculous as well as sad

Posted on October 5, 2013 by Nigel Cameron

Twitter 6×6 (Photo credit: Steve Woolf)

It’s hardly news that women don’t dominate technology companies, or indeed most companies, or governments (though the news that Rwanda‘s parliament now has 64% women members is fascinating; I wonder who will be the next president . . .). Point is: While denizens of the C Suite and Board members need to have a really smart grasp of the business, to use the old not-many-women-are-engineers defense against women high-level appointments is becoming absurd. Here, the New York Times points out that now Twitter is in process of going public, the public knows it is yet another men’s group. The board is entirely male (and, ahem, white). One woman, a new hire, Vijaya Gadde, is to be found in the executive office (she’s General Counsel).

This is ridiculous to my mind not become it isn’t “fair” (I have consistently argued that the equity case for appointing women to top jobs is both unreasonable and dumb), but because value will not be realized in this fast, fast-shifting economy without widely diverse expert perspectives at both C-Suite and director level. This is not simply an argument for women or other “diverse” groups. It’s a value-driven case for diverse thinking, including the seriously contrarian.

We have already noted that the IPO is also sad. Sad, because at some point a major social company will wake up to the fact that the logic is for social companies to be social in their governance. We need smart thinking on governance as well as technology, and smart mechanisms that will reward founders and other early risk-takers without locking up the results of their efforts with Big Oil governance. (See Facebook‘s share system, which together with its board membership and the role of its founder locates it clearly on the Carnegie/Murdoch side of history; and Twitter’s plan for a classified board. Sigh.)

We’re waiting for the tedious old-economy governance and financing approaches of these smart, C21 companies to find alignment. It has yet to happen.

http://nigelcameron.wordpress.com/2012/04/15/we-need-to-talk-about-twitter-reciprocal-knowledge-engine-plus/

https://futureofbiz.org/2012/12/11/please-may-we-have-a-social-social-network/

Curtain Is Rising on a Tech Premiere With as Usual a Mostly Male Cast – NYTimes.com.

The Tragedy of Twitter’s IPO

Posted on September 14, 2013 by Nigel Cameron

Credit: Wikipedia

There is something quite new about social media, and it is not that it’s providing on a huge scale (of hundreds of millions) volunteer contributors of “content” that in weird and wonderful ways deliver huge sums (of billions) to those lucky entrepreneurs whose projects made it big. Well, OK, it is partly that. But if that is how we are looking at the #socmed phenomenon, we give evidence of something between severe myopeia and locked-in syndrome.

Twitter faces a double problem here. First, because of the tendency to group “social media” together (Pinterest and Twitter have about as much in common as the Stock Exchange and a town hall meeting – oh yes, people, large public rooms, engagement). From one angle it is one of the Big Four, with Facebook, LinkedIn, and YouTube. But that is the least interesting angle.

Second, because the world of media properties sees social media as just another one, disruptive in its own way, vacuuming up global advertising dollars and offering new channels for content acquisition and delivery, but essentially same old, same old.

These fallacies – for fallacies they are – are shared by many in the C Suites of the aforementioned companies, which may seem odd. But consider: Facebook, the social media property of social media properties, is is run with all the social sensitivity and engagement of Big Oil, or Big Banking. Or, interestingly, the Murdoch news empire (whatever its latest name is). Look at Facebook’s share structure/governance, and at its engagement with its user base (remember the shananigans over voting for changes? o my goodness). It is one of the least “social” companies on the planet.

Point is: There is something profound and new about “social,” but it is as subtle as it is profound, and it has left many of the engineer-innovators who gave us these behemoths as high and dry as that big majority of Fortune 500 C Suite execs who neither understand nor even use it. The point is substantive and cautionary. I do believe social is revolutionary, for business as well as for government. But these are early days, and it’s not easy to demonstrate.

What I was hoping for from the big social innovators was that they would buy deeply into the culture they were helping create. If that had happened, instead of tedious IPOs exposing these complex ecosystems to traditional market forces, we would see the development of innovative models for governance and financing. Sure, let the entrepreneurs be rewarded, and let revenue models emerge for their creations. But within structures of shared governance, whether within traditional non-profit models (a la Wikipedia, and four cheers for the great Jimmy Wales), or mutualization (users are the stockholders), or something smart we have yet to devise. These subtle products of the new economy are simply treated, when the time comes, as old economy entities. Social media cry out to be handled as our supreme social enterprise companies.

As for Twitter itself, on which have written many times – while it has many uses (and I don’t mind if you want to follow Bieber’s publicist or your favorite brand’s marketing department, really I don’t), at its innovative heart it has developed what I’ve called a “Reciprocal Knowledge Engine” – a core mechanism for handling the explosion of knowledge, at the same time as opening up knowledge networks for much wider participation, to the massive benefit of all concerned. I trust this will survive the handing over of this precious thing to the more rudimentary end of the marketplace.

Twitter Files For IPO – Confidentially – Forbes.

Twitter: The Reciprocal Knowledge Engine

Facebook as the unsocial social network

Five Rules as Facebook Goes Down; and what next?

Posted on May 1, 2013 by Nigel Cameron

Image via CrunchBase

We’ve now had a number of these stories. Is Facebook really on the verge of becoming MySpace? It seems absurd on the face of it, as global numbers keep climbing and any company which can recruit over 1 billion users is in an enormously powerful market position. On the other hand, when numbers plateau or drop slightly – as these latest stats drawn from more than one reliable source suggest – it’s a handy reminder that not even Mark Zuckerberg’s clever creation lies beyond the effect of market forces. And, very specifically, beyond the logic of disruptive innovation.

Five observations, nay, emerging rules.

1.Whether seen as a bubble or not – the current crisis in the U.S. Postal Service offers a slow-motion parallel – Facebook is not forever. It is not “different this time.” True, some companies stick around for many years (though a comparison of top listed companies decade-by-decade is a revealing and sobering exercise). And we do need to face a special factor that I have suggested on more than one previous occasion: that the extent to which a company’s core technology and/or business model is digitally derived, that company will “age” faster. A disruption variable, perhaps. Think Built to Last – and add an accelerant.

2.Of course, Facebook’s very dominance has set it up as a target. Around the time of the IPO, I recall observing that the various global governance authorities in telecommunications, and indeed back of them the governments themselves, are unlikely to sit back while a single American company, controlled Murdoch-like and more by one individual, develops an essential monopoly of a major slice of global communications. Meanwhile, we have begun to see the slow growth of interoperability, which seems to me to ensure the doom of economic profit in social media – at least in so far as the business model depends on “social.”

3.While the lock-in impact which is the obverse of the network effect remains powerful –at least, sans more comprehensive interoperability – the entry of very large numbers of users into a multiplicity of platforms has begun to chip away substantially in this advantage which Facebook the first-mover monopolist has built. So, I was just chatting with my daughter in Google chat. She actually thought she was using Facebook. Whatever.

4.I have argued repeatedly that it is a thoroughly bad thing for Facebook and other social media to have chosen the IPO route instead of seeking innovative governance and financing models which would preserve the integrity of their alignment with their users and with their proclaimed social goals. Market pressures, and – as in this case – the increasingly intrusive and sometimes offensive presence of advertising, now interposed with messages from friends as well as making up that margin down the right-hand side, are substantially altering the Facebook experience.

5.It is of course the case as Facebook and others will argue that Western and some other markets have matured, which is a proper explanation for numbers in a report such as this. This raises various questions. One is whether “maturing” explains the drop in minutes of exposure to the site on the part of those who continue to use it. That is, does maturing mean that our interest has matured and is now declining (that is, we are getting bored)? For other, the success in China of alternative social media in the context in which many Western companies are blocked suggests that network effects are still largely confined to homogeneous language/cultural/social groups.

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The bubble, at least, is contorting. We may feel for the people at HQ who live under market pressures to grow and grow and grow at a time when, that a remarkably, they have grown and come close to saturating the markets most accessible to them and in which there is a strong cultural match.

Next up?

Meanwhile, some of us expect before very long there to be the kind of services Facebook offers available either for a modest subscription or free of charge from entities designed on open principles for global interoperability, using innovative finance/governance models in which users have ownership, which will replace the flailing US Post Office and much else from the old economy with organizations that do not look as if they were built and governed by the high-tech grandchildren of Rockefeller, Vanderbilt, and Chase.

https://futureofbiz.org/2013/01/15/state-of-social-a-report-card-for-2013/

Numbers don’t lie: The Facebook bubble may finally burst | Digital Trends.

Facebook Crashes. My 5 Questions.

Posted on August 7, 2012 by Nigel Cameron

(Photo credit: Wikipedia)

As Facebook settles to just over $20 and all kinds of problems emerge for the company as a result (chronicled here at length, including lock-up releases, tax issues, cash issues:�http://www.businessinsider.com/facebook-lockup-release-2012-8#ixzz22mj8cB6e) we keep coming back to the basics.

My 5 Questions, following up my earlier post Is #Facebook Doomed?

1. How do we value such an effort in terms that synch with Wall Street when all digital companies are fragile if wonderful things? (Answer: Dunno)

2. How do we project value into the future when (as I keep saying, over and over) interoperability looms in the social space, and with it the end of economic profit? (Answer: Modestly)

3. How can it be that our definitely “social” company shows less interest in social engagement (and diversity!) than almost any other on the planet, when it is probably the company most in need? (Answer: A Dreadful Mystery)

4. Why did Mark Zuckerberg and his buds, who claim serious social purposes for their enterprise (which I have no reason to doubt are genuinely held), not explore innovative financing and governance techniques instead of chanting IPO and setting up a governance structure that a C19th steel baron would admire? (Answer: A Curious Lack of Imagination?)

5. When will a major “social” effort decide to fund itself, in part at least, through subscriptions from its user base – with commensurate accountability – in place of the vortex of ads/analytics/privacy into which our premier social network is being sucked? (Answer: None too soon)

Facebook Crashes To End The Day – Business Insider.