Browsing Tag

chris brogan

9X Effect: Google+ and Netflix looking at changing markets

Image: A. Stiffler


From a product management and product launch perspective the last couple of weeks has provided a good deal of fun for many of us – Google+ launches and Netflix launches new pricing. Each with their own flavor of feedback from the market.  The feedback and insight from the market for each of these activities have been the fodder of 100’s of blog posts and gazillions of tweets (guesstimate) and they both may represent a point in time where their target markets are changing.

Markets move and present opportunities and while significantly different markets, I belief both have put their best foot forward to address the changes in user preferences and technology adoption.  Netflix is transitioning from a legacy market need with DVD‘s and Google looks to be taking advantage of gaps and preferences for users in the social space.

Clearly some segments of the social space are looking for something other than facebook and the buzz in the market from early adopters appears to show significant traction with Google’s launch into social.   The negative feedback and general outrage in the market around Netflix strategic pricing decision is also a launch, but addressing an emerging trend from their user base and the market at large.  A 60% price move is a big lift, so such a decision likely represents a strategic decision in response to research, transactional data and  trends which indicate that streaming is now mass market and maybe DVD’s are on the way out.

10 Million Users, now what?

The momentum with Google+ is undeniable, but the type of content, the participants and available tools are pretty limited: technology focused content (the first week was all G+ content – thank goodness for netflix’s pricing launch!), the early folks from Twitter appear to be the first one to setup shop on G+ and no mobile option on the iphone.

Regardless of the content, network participants or availability of tools – 10 million users in 2 weeks is worth note without a doubt, but what will it do for social networking, users and how we use the internet? Which is something Facebook addresses today for it’s 750 million users.   Olivier Blanchard addresses some of the questions in a recent post:

Will Google+ change the world or the internet? No. Google+ will not change the world. Or the internet…

Will Google+ kill Facebook? No one really knows. I suppose it could…

What about LinkedIn? If Facebook didn’t kill LinkedIn, chances are that Google+ won’t either…

So maybe the question is maybe why is 10 million users interesting?  If I put the 10 million number into context – that’s less than 2% of Facebook‘s 750 million.   So speed to 10 million might be an interesting metric, but what is the point where we all look to G+ over Facebook, Twitter or LinkedIn.  Does Google+ need to kill anything to be successful?  Is it enough to make Twitter boring?  Or as the LinkedIn CEO posits, there isn’t room for another site, since free time is lacking for most.

No doubt there is some really interesting discussion going on online around Google+ and the Netflix pricing move.  So I thought I might add my spin from a market perspective.

G+ is the Bomb!

There will always be fans for the newest thing, but with Scoble and Brogan taking pretty hard stances publically, it’s hard to ignore the noise.  Here is a snippet from my Google+ stream which indicates some people are already  betting on Google+, Chris Brogan appears to be “all-in” for Google+ over Facebook and while others are questioning if that’s a wise decision:

It is clearly to0 early to know what will really happen, ultimately the real answer will come out over time.    Maybe Google+ is the next big platform, but at this point it is a niche as David Armano asserts, but the cottage industry for Google+ is already beginning with “How to Use SeminarsWorkshops” already popping up at $49 per attendee and irritating some in the industry.

If Google+ represents a change in the market, it means some people may not make the transition, just like some products and companies won’t make the transition successfully.  Whether it’s the next big thing for social or a movement to a new mode for movies which mean something gets left behind – memories, references, case studies, investments and experience.  When markets change, the participants can get a little huffy.  Remember when Apple left the floppy disk out of a mac for the first time?  That made people mad.

So what will make Google+ successful or users move to support Netflix in the next market move?

Features? Community? Content? Catalog?

In both the Netflix launch and Google+’s, users have a decision to make.  Stay where they are (Use current tools or pay more for DVD’s), make a change (Augment social with G+ or go to a new provider for Movies) or make a radical change (Abandon previous social modes or DVD’s).  While at different points in market maturity, both of the launches represent choices and change, which is stressful for the community of users/customers.

So is there a magic bullet to make people move?  Depends on who you are and what value you have invested in the previous solution (FB/Twitter, DVD’s…), but there has been a good deal of talk around  Google+ and their really nifty features.

Google has change social much in the same way Gmail used a different metaphor, Google+ is no different with circles (this takes a diagram to really understand), real-time update of the stream (this takes time to get used to), sparks (not sure I really get it or it’s just a bad implementation) and easy access to all of the capabilities we already enjoy from Google, but is that enough?

While the content portability, privacy and ownership at Facebook is an issue for many is this enough to drive change?    Does the value offered around community and content in respect to identity and openness at Google+ help drive commerce and collaboration as Facebook has already established for their stakeholders in the market.

It’s not the Numbers, it is the Value for the Users

So where is this post going?  Well, I think the real question is when will Google+ have enough value for a people to abandon their existing investments/endowments in Facebook and move to Google+.   Investments in time, content, relationships…  Has streaming crossed a threshold where we as owners of 100’s of DVD’s are will to start investing in the new medium for our movie catalog?

For Google+ to achieve a “kill Facebook/some existing thing goal”, it needs to break through the 9X effect for perceived value delivery.  The 9X effect is a concept from John Grouville’s paper, Eager Sellers and Stony Buyers, which posits innovation with significantly better value may not actually mean success in many markets.  Success comes in many segments when a previous solution/endowment is abandoned for a new solution.

Below is a graphic which outlines the challenge ahead for Google+ and perhaps a driver in the pricing increase on the legacy endowment of DVD’s at Netflix.

FWIW: The 9X effect relates to displacing any platform/investment in technology, not just Facebook or DVD’s:

Essentially just because it’s different, better and seen by some folks, like early adopters it doesn’t mean success.  Tivo is an example of a business which delivered an innovative product, the incremental value over DVR’s from our cable providers is proving to be a central challenge for Tivo today.

Tivo – Great product, early inertia and a business model which is currently struggling to work,  much of which is rooted in the 9x effect conundrum.   With the catch up of cable DVR’s, existing DVD collections and on demand options most users don’t see a 9X+ lift with Tivo, even early adopters have dropped of the subscriptions, like me.

Markets are People

Businesses often opportunistically try to leverage market change to wedge in new offerings and approaches for folks in markets. The challenge is that each person in the market has different experiences, successes/failures, investments and world views which impact how they view market changes.  I mean my dad still is mad about 8 track’s going away and he’s 73.  So when understanding the 9X effect,  Andrew Macaffee set’s  forth 3 considerations as it relates to how given users look at their options around technology adoption/usage:

  • We make relative evaluations, not absolute ones.  When I’m at a poker table deciding whether to call a bet, I don’t think of what my total net worth will be if I win the hand vs. if I lose it.  Instead, I think in relative terms —  whether I’ll be ‘up’ or ‘down.’
  • Our reference point is the status quo.  My poker table comparisons are made with respect to where I am at that point in time.  “If I win this hand I’ll be up $40; if I lose it I’ll be down $10 compared to my current bankroll.”  It’s only at the end of the night that my horizon broadens enough to see if I’m up or down for the whole game.
  • We are loss averse.  A $50 loss looms larger than a $50 gain.  Loss aversion is virtually universal across people and contexts, and is not much affected by how much wealth one already has.  Ample research has demonstrated that people find that a prospective loss of $x is about two to three times as painful as a prospective gain of $x is pleasurable.

These three drivers are significant barriers which innovators and marketers need to overcome to call something a success.  The relative reality of value just may have caused the negative feedback on the new pricing launch from Netflix.  While the outrage was swift and loud online,  the real question is how many of us are really willing to make a move?  The move to another provider?  The move to the new package for 60% more? A move to streaming only?

As a avid user of social media, I haven’t really even thought what it will take to displace Facebook, as a user I actually am pretty tethered due to friends and family I’m connected to and this is the only place they really invest online.  So I’m not sure it’s what would make me move that matters, it is more about delivering enough value to make my network move.   Same thing with my Twitter usage, so that’s a pretty big bar, but I might make G+ serve a specific segment of my life.

When is the mass market of users and the businesses which use Facebook willing to make a move or to even adopt an additional platform.    While the early adopter buzz is interesting, it doesn’t represent the typical user in the market and is almost meaningless.   For right now it is more than likely shiny object syndrome more than anything and may best be a niche platform.

I consider myself a fairly early adopter and usually somewhat susceptible to shiny object syndrome, because what if the next one is it.   To that end, I’ve gone to and started using the platform du jour over the years (Friendfeed, posterous, tumblr, Quora), much like I’m trying Google+, but none of them have really taken off or at least they haven’t been integrated in my life as Twitter and Facebook are.  This early adopter mode which I often find myself in was probably one of the reason I had a Tivo years before DVR’s where common and a several streaming accounts early on (Amazon, Netflix, Hulu..).

Escape Velocity is more than Buzz, it’s a Business Model and Strategy

While I don’t have a crystal ball, I do know that time and value delivery are the key variables which will determine if a product will be a success.  Netflix’s investment in streaming has been significant over time – infrastructure, catalog of movies and strategic partnerships with content providers has changed the market for many who previously didn’t even think streaming was an option.  For many, streaming was a value add around the DVD offering – is it possible both Netflix and Google are both looking a situation where a 9X effect will dictate a move for their business and the products they offer to market.

Maybe Google+ will be niche as Armano asserts and could do this very successfully by many metrics or it could be the next Platform we all use and engage in as Brogan believes it may be.   The current global facebook endowment is pretty big:

  • More than 750 million active users
  • 50% of our active users log on to Facebook in any given day
  • Average user has 130 friends
  • People spend over 700 billion minutes per month on Facebook
  • More than 30 billion pieces of content shared each month.

Add to the users investments, there are businesses as well investing in Facebook – a cottage industry of app developers and a global spin machine of marketing consultants who are focused on FB it’s a really big endowment, but not unlike the investment many of us have in DVD’s.

9X Effect: Mileage and Strategies Will Vary

The main difference between the challenge both Google+ and Netflix have which each of their markets is the adoption of users, while Google is hoping that social provides an opportunity to displace many people and businesses social investment and Netflix just might be hoping that DVD’s are done or near done.

Maybe the price increase is based on Netflix looking at their market and believes streaming has finally achieved enough value that DVD’s are no longer relevant for a majority of the market.  And if you want to be part of the laggard DVD market, you can pay more – makes sense to me.

Strategically, Netflix’s decision may have changed the market with the a $6 price increase.  This decision may actually accelerate the abandonment DVD’s endowment in the market.  When I first got notified on the new pricing,  I looked at the $6 dollars not a price increase, but a continued investment in my existing DVD endowment.  For me, I’ve chosen that now is the time move on from DVD’s, not Netflix because the streaming fees are still worth it from my perspective.

So where is the point in time that some social platform displaces our Facebook investment?  I suspect it is some time off and requires a significant amount of value for all constituents on the platform – users, advertisers, app developers and marketers.

It may well be that Google+ never will never successfully address the 9X effect for displacing Facebook/other social platform, but does it have to be successful?  Does Netflix have to kill the DVD to be successful?

Identity: Identical Choices and Opposite Positions

On Thursday, the Social Media Club Atlanta met – Peter and Tessa continue to maintain the momentum with the re-launch of the group in late 2008.  Thursday’s meetup was a very interesting discussion on how folks manage and view their identities online.  There were several key areas of examination on the agenda which the panel discussed, while moderately engaged in buzzword bingo – which had Chris Brogan as an square:

  • Is your online identity different from your IRL identity?
  • What does it mean to “manage your online identity”?
  • Are there any off-limits topics on blogs? Who decides?
  • Rethinking the personal/professional dichotomy and tearing down the walls of compartmentalization yea or nay?

I basically have been thinking about this consistently for the last 36 hours, thanks to the engaging discussion. This is why I thought I might write a piece on it.  The premise that you should be able to express and share online without fear is definitely a freeing concept.

Everyone WAS Correct

  • Folks should be who they ARE online
  • Online activities should not impact careers
  • Not hiring someone because of online content is bad
  • Folks should be able to blog about what they want
  • Sharing and developing ideas is a good thing
  • Your ability to develop deep relationships should be seen as a good thing

No doubt all good things.  There however was a the feel of a naivety which themed across the general conversation.  It had that college coffee discussion feel – theoretical and altruistic views of how things should be and encouraging “action”.  An intellectual/theoretical discussion on the merits of social media, identity, access and the potential offline impacts with a bunch of blogger types is always a good time.

Very few things are as rewarding as in depth conceptual discussions with like minded folks – ya find that common thread and GO!    Great ideas, but somewhat unsustainable concepts since choice, participation and freedom is bi-directional.  I draw the personal parallel to my participation in the Workers World Party in college.

The Parity of Rights

The most common theme across all participants was the impact on social media and their careers.  In principle, I think that social media offers an interesting differentiation for job seekers.  That being said, a general concern surfaced on the unjust use of  Google during the job hiring process, leveraging online content in hiring decision cycles and the potential reality of job loss due to online content.  Compartmentalization, management and tolerance peppered many of the responses.  After all – a good worker is a good worker, sorry to go all Workers World on ya.

Again a great discussion around how ideological constructs can conflict economic decision criteria.  The problem with rights – they cut both ways.  The same decision making ability one has on how they manage their online identity online is the same right/ability enjoyed by those that are making a given decision.

Freedom of expression and the parity of rights is an interesting thing.

Join the Atlanta Discussion, every second Thursday of the month @ Manuel’s in/near L5/Highlands/Inman Park edge area @ North and Highland.

Join Social Media Club

Join the Atlanta Social Media Club Facebook group

The year in review blog style…

New York Times Square New year celebrations in...
Image via Wikipedia

So I always like to take the time and read stuff I wrote earlier in the year to see if I have gotten any better and to see if there are opportunities for improvement.  As part of this annual continuous improvement exercise I find pieces I like more than others and numerous areas for improvement.  I really should do it more often, but this is time of year when I have the time and the inclination.

On critical thing I did notice was I may have went back on the Less Fluff promise.  To rationalize a little, I no longer define links and videos as fluff, so there.   I know I’m changing the rules a little, but it is always about context and at the time my links WERE FLUFF.   Now that I have finally found a more crisp focus on Marketing, Brand and Product, it’s easier to transition these into value, than random stuff I found.

I guess there is the off chance I’ll publish something in the next couple of which should be on the list, but probably not.  That that end, below are 10 posts I really liked, some y’all liked too, some you probably haven’t read.  No particular order

  1. 10 Tips for Dealing with the fact you will never leave your job – A piece on how to continue to look for ways to improve your job satisfaction, even if you have been there a while.  A little off topic, but one I really liked writing it.
  2. $1 coffee a sustainable model – This might be when I really started to think the economy was goofed.  When an ROI model for buying a fancy coffee pot is interesting to other folks.
  3. Complexity: The context of Identity – A piece I didn’t on the overwhelming burden of identity management and the rewards for engaging in as meaningful a way a possible.
  4. Enabling Persona Based Sales – This is about when I started moving towards a theme here.
  5. Stories in the Village: Everyone Must Understand the Brand – I’ve spent a good deal of time this year working on positioning and the ability to scale positioning and this piece is probably when I realized that the whole org has to be able to tell the story, not just the smart folk.
  6. Principles: Shading Strategy and Execution – Situational definitions and personal world views can change what you do when it comes to principles, but it shouldn’t.
  7. What’s Your CRM strategy? Social media is really interesting, it develops and help enhances relationships, so this piece posits that maybe you need a little social media in your customer relationship management strategy.
  8. Who are these people and why are they Following me – I was goofing with Em and talking about Widespread Panic not being around for New Years and I regurgitated a thing we always say at shows: “Who is this band and why are they following me?”, next thing I know I’m cataloging profiles on Twitter.
  9. Steve Johnson Interview – The whole Marketing IS in the Middle series was great, as I got to connect with friends, thought leaders and former colleagues, which was a great time all around.
  10. Chris Brogan Interview – This is also from Middle series and was an interesting take from an accidental marketer with some great insights.

Hope you find these of interest and there are some new one’s you haven’t read.  Cheers!


Marketing IS in the Middle: Chris Brogan

Marketers are EVERYWHERE and not all are formally trained, I for one am an accidental marketer so I thought it was important to reach out to other folks who aren’t formally trained.  So as I continue to look at marketing and my network, I thought it was important to engage not just traditional markets, but also folks that help drive the overall ecosystem.  Chris Brogan is just one of those folks.  I actually didn’t follow Chris at all until he responded to a corporate blog I participate on and piqued my interest.   I’ve had the opportunity to meet, read and appreciate Chris’ take on social media and the larger marketing opportunity with social media.    Make no bones about it – Chris is a marketer and his new venture as president of New Marketing Labs is proof.  Chris was cool enough to participation in the marketing is in the middle conversation and below is his view:

What marketing roles have you had and in what markets?

None. I was a technologist for the last 18 years, but got into marketing by way of joining an events marketing company (Pulvermedia), and just haven’t left the circus since. Over the last 10 years, I’ve been blogging and using social media for improved business communications. Turns out that *became* marketing when I wasn’t looking.

When you look at your career in marketing, what discipline/component have you found most interesting/challenging?

Interesting: listening. I think that listening and customer service are the new marketing. Screw your stupid tag lines and contests. If I listen to prospective customers’ needs, and I can improve the way a customer works with my company, then I’m doing what marketing really wants to do: acquire new customers and keep the existing ones happy. Have fun with your contests.

What do you feel the most important component of a successful marketing gig?  (Product, Brand, Positioning)

Moving a behavioral needle. Did I get something to change and stay changed from when I started until when I left.

Since you selected something I NEVER would have thought of how has that contributed to revenue?

Building loyal passionate communities is a great way to contribute to revenue. It’s lovely to ask people who are passionate about how you make them feel for money. They like giving. Revenue is a return on influence.

What experiences brought you to this conclusion?

I’ve run some very successful conferences, and I’ve also run some online marketing experiences for people. In both cases, my best proof is revenue. I hate the ROI question, because there’s no easy calculator that shows you what I’m going to deliver. So instead, I show revenue bumps as fast as I can. Seems like a fair trade.

If you could design the perfect corporate environment for a marketer to be successful what would that be?

Small, nimble, and focused on action, not beauty.

How far is this from reality?

Not far in my world. I’m working with some great companies, big ones, who love the idea that it’s as simple as listening, building relationships, and serving those relationships. I love developing quality content marketing for them, like group blogs or email marketing that delivers, instead of the same tired old marketing messages. I’m loving my ride, and looking forward to what comes next!