Joseph Schumpeter popularized the theory of creative destruction, that in a healthy free market system, it is natural and necessary for companies and industries that rise to virtual monopoly status to be transformed or replaced through entrepreneurial innovation. Although Wall Street investment firms might be considered "too big to fail," social media companies are not.
Now punchlines and cautionary tales, AOL, Friendster, and MySpace were once considered inexorable juggernauts. But it wasn't a bonfire of superior technology that undermined them. Over time they all fell short of user expectations in various ways, allowing alternative value propositions, service models, and providers to gain a foothold and eventually surpass them.
Facebook and Twitter rose to their preeminent status by capitalizing on the shortcomings of their predecessors, then relying on the difficulty of moving/replicating personal networks to keep users in place (if not entirely happy or active). But even as these new hegemons enjoy seemingly limitless growth, they themselves are not immune to the creeping forces of creative destruction.
Recognizing the early signs and devising provisional strategies and tactics to address them could create new opportunities for social media marketers.
Seeds of Discontent
- Privacy erosion - Recently described as "step on toes until people scream, then apologize," Facebook's policy has moved in the minds of many privacy advocates from a tolerated tradeoff to a genuine threat.
- Lack of control over personal information and content - The more creepy "how do they know that about me" ads show up on our home pages, the less likely we are to trust our networking platforms.
- Poor usability - Famously byzantine and inscrutable, Facebook's user interface not only is a chronic problem in its own right, but also compounds its privacy issues by making users fearful that altering their account might undo other preferences and settings. And how well can it bode for Twitter when a symbol for its shortcomings, the Fail Whale, becomes a cultural meme and core users prefer clients like HootSuite and TweetDeck over the Twitter site itself?
- Hubris - The classic. Ignoring how the open source movement begat Linux, which begat Android, today's social media mega-networks appear to underestimate the power of a highly skilled, highly motivated community of true believers to effect transformational change over time.
New Approaches, New Opportunities
- Diaspora - More of a guerilla movement than a frontal assault on Facebook, Diaspora, is setting out to become "the social network that puts you in control of your information. You decide what you'd like to share, and with whom. You retain full ownership of all your information, including friend lists, messages, photos, and profile details."
- Niche private networks - For the legal community, Legal OnRamp is collaboration system for in-house counsel and invited outside lawyers and third-party service providers, and Law Pivot matches general counsels at tech firms with outside subject matter experts for crowdsourced answers to legal questions.
- Gist - The love child of database marketing and RSS readers, social CRM service Gist lets individuals manage and interact with their personal and professional networks by aggregating contacts from various sources in a single place and providing tools for content sharing and listening.
What Social Media Marketers Can Do to Leverage Creative Destruction
- Develop a "niche" niche - The profession is full of Facebook and Twitter marketing gurus. How many "new and emerging social networking platform" experts can you name?
- First mover advantage - Getting involved in early-stage networks to see what works, what doesn't, and why can pay big dividends in influence if/when the community or service takes off. Look what it did for Twitter's early adopters.
Post by Jay Pinkert, a principal with Shatterbox, a marketing and communications consultancy that helps professional firms distinguish their brand and build referrals through content-driven programs and niche development.