LECTURE L19SOCIAL

Eric Schmidt Le Web Conference 2011

before social media?

READ ONLY CULTURE

PASSIVE CONSUMERS

STANDARDISED, INDUSTRIALISED

before broadcasting?

SINGING THE SONGS OF THE DAY

CONVERSATION

RadioCommercial

Radio TV

Magazines

BROADCASTING

1900 20001950

VideotapesCommercial

TV

Newspapers

Films

LPCD DVD

First email sent1971

First online bulletin board

1979

World WideWeb1991

GeoCities1994

Instant Messages IM1996

BROADCASTING

1970 20101980 1990 2000 2010

TheGlobe.com1995

LiveJournalP2P, Napster

1999

Friendster2002

MySpaceLinkedin

PhotobucketDelicious

2003

Facebook2004

Youtube2005

Twitter2006

END OF BROADCASTING

END OF BROADCASTING

Clay Shirky How social media can make history

“We’re all in this together”

And then we got LOL cats…

Network Effect

Occurs when a product or service becomes more valuable to its users as more people use it

Understanding this helps build better products and businesses

Source: Benedict Evans slide deck

Network properties: 1. Whether the nodes are homogeneous or heterogeneous 2. Their type of clustering and degree of connections3. Directionality of those connections 4. Whether they have (or are) complements Putting the ‘network’

in network effects

Network PropertiesNetworks are basically just a set of nodes connected by links

Source: Benedict Evans slide deck

Network Properties1. Homogeneous or heterogeneous?

Homogeneous: Composed of similar types of nodesSkype is an example of a homogeneous network where most of the value is derived from a single class of users, all interested in placing a phone call

Heterogeneous: Composed of different types of nodes OpenTable is an example of a heterogeneous network with two distinct categories of participants: one side is restaurants, the other side is diners

Source: Benedict Evans slide deck

Network Properties2. Degree of connections and type of clustering Source

Degree: Measures number of connections to a single node

Clustering coefficient: Measures degree to which nodes in a graph (e.g., social graph, interest graph, intent graph, etc.) cluster together

Type of cluster: Can range from hub-and-spoke (star) to connected (clique). Example of Facebook friends connections clustering (high school, college, significant other’s, etc. clusters)

Source: Benedict Evans slide deck

Network Properties3. Connections: Unidirectional or Bidirectional?

Friends

Facebook, for example, is one place where connections tend to be bidirectional

Follower

Twitter, for example, is one place where connections can more easily be unidirectional or one-way following, leads to asymmetrical connections

Source: Benedict Evans slide deck

Network Properties4. Complementary Networks

Increase in usage of one product by a set of users reinforces and increases the value of a complementary (but separate!) product, which in turn, increases the value of the original

More usage of the MS Windows operating system, results in more usage of the MS Office suite of applications

Source: Benedict Evans slide deck

Network PropertiesCommon law for assessing the value of communication networks

Source: Benedict Evans slide deck

The Brat Pack Returns

Breakfast Club 1985

BRAT PACKMASHUPS

YouTube's Origins as a Dating Site

The YouTube EffectYouTube is changing the way we Innovate

The Liquid Network

Chris Anderson How web video powers global innovation

TED 2010

CROWD ACCELERATEDINNOVATION

Crowd Accelerated InnovationCrowd - Group of people that share a common interest. The bigger the crowd, more innovation

Light - Clear visibility of the capabilities of the best people

Desire - Innovation is hard, need practice

THE TOOLS OF PRODUCTION IN THE HANDS OF PEOPLE

WHAT HAPPENS WHEN YOU CONNECT PEOPLE?

Clay Shirky How cognitive surplus will change the world

WHY DOPEOPLESHARE?

WHY DOPEOPLECONTRIBUTE?

WHY DOESOPEN SOURCEWORK?

WHY DOES THESE WORK?WE DON’T KNOW THESE PEOPLE AND WE DON’T TRUST THEM

Rachel Botsman We've stopped trusting institutions and started trusting strangers

WHY DOPEOPLECONTRIBUTE?

Sharing is in our self interests

We do it for ourselves

It is in companies best interest

WHY DOESOPEN SOURCEWORK?

THE NEW SHARINGECONOMY

HIERARCHAL NETWORK

20th Century 21st Century

http://www.flickr.com/photos/piet_musterd/

Crowdsourcing

Source:PicutrefromIMDb,FilmJuno

Source:PicturefromAmazon.

Those who control the media control the culture

SOCIAL MEDIA

Social media is the first media network created by consumers

New universe of platforms, how we do business

PLATFORMS

Software SellerBuyer

Software brings the coordination cost to zero

Think Uber, Airbnb etc

PLATFORMS

Software Consumer Producer

Consumer Producer

Software brings the coordination cost to zero

THE NEW MARKETPeople reject consumerism

Consumer-capitalism ate everything, and people are becoming apathetic towards consumer mass-marketing and production

People do not care for being targeted anymore and have even stopped voting as a result of being targeted by politics

Access trumps ownership

Jerry Michalski - Jumping Platforms

Source:http://www.flickr.com/photos/webrevenu/

Source:Facebook

Network effect

1.71 billion people

January 15, 2009, US Airways Flight 1549

Tahrir Square, 2010

Tehran uprising, 2009

JuliaKlöckner,ofchancellorAngelaMerkel’sCDU,toldherTwitter“followers”onthatafternoon:“People,youcanwatchthefootballinpeace.Thevotewasasuccess.”

“four more years”

Inthreehours,themessagehadbeenre-tweetedabout455,000times

770.000 retweets

3 million retweets

Launched October 2010

600 million active users

In 2012, Facebook bought Instagram for $1 billion

Instagram

Launched March 2010

Pintrest

Users: 176 million, active 150 million

84% are women

75% of usage is mobile, 93% of users shopped online

Launched September 2011

Snapchat

Users: 200+ million

First popular with users age 13-23

7 billion videos per day

Launched September 2010

WhatsApp

Users: 1 billion

700 million photos and 100 million videos every single day

55 employees - bought by Facebook for $19 billion

There is actually value in not belonging to a group

Facebook killers?

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