Matrix: Challenges of the Social Technology Industry, July 2010 Edition

While the opportunities for social technologies to change the world, business, and our individual lives continue to unveil, it’s also key to focus in on the challenges that impact the industry.  For many folks who have decided to invest in social technologies to improve their careers and business, it’s even more important to pay attention to these challenges.

First of all, have the right mindset. The savvy person will realize this isn’t a list of gripes, but instead an opportunity list.  Leaders at vendors, agencies, or brands will see these list of challenges of problems to fix and monetize.   If you’re in this space, you’ll want to send this list to your product teams, or strategy teams so they can think about how to solve many of these issues –or at a minimum, be prepared for it.

Matrix: Challenges of the Social Technology Industry, July 2010 Edition

Challenge Description Why it’s Painful How it will be Resolved
1. Noise overwhelms signal With over 50mm tweets each day (more stats here), and more coming, there’s an excess of noise. Expect this to increase as the ‘Internet of things’ and inanimate objectives emit signals. A compounding problem. Finding the needle is an incredible challenge as the haystack continues to grow.  As a result, individuals and companies will rely on analytics tools to derive what’s important, meaning they have less time digging in deeper as their viewpoint becomes larger. Expect social inbox aggregators to filter signal like Facebook, Google, Bing, Salesforce, and eventually social analytics and then social insights vendors, We’ve mapped our a roadmap in our Social CRM report, but expect companies like Crimson Hexagon, Crowd Factory, to be the filter and conduit for advanced listening and analytics.  On the consumer side we can already see the Facebook news feed pruning the most relevant information from our average of 150 contacts.
2. Amateurism threatens expertise The social web is like a vuvuzela, everyone has one, blows it, resulting in a pure buzzing sound. Now, this means that non-experts are commenting and asserting influence in areas where only experts had voices.  Andrew Keen has explored this topic at great detail. Media, journalists, photographers, videographers, and all other IP or media based industries are impacted as everyone is on the game.  The challenge is, with amateurs and prosumers in, it’s created challenges.  For example see keynote panel at SXSW debating crowdsourced graphic design vs the elite professionals New markets are being developed that meets the needs of both the expert elite class as well as those of the masses.  We’re seeing experts adopt these same tools of the masses, for example, nearly every online newspaper has integrated social technologies.
3. Power shift to participants Those who use social technologies like ratings and reviews are sapping power from those that don’t.  Furthermore, voices from those with simple tools like blogs, score well in search engine results pages, a common starting place for information seeking. Research on trust, such as Edelman’s trust barometer indicates that people trust others like them, in almost every situation.  As a result, institutions and organizations are being cut out as an unneeded middleman. In order to get back trust, these institutions have to use the same tools as the commons.  The challenge is developing a significant shift in mindset and deployment.
4. Fast moving industry creates confusion There are few other industries that move as quickly as the social space. A combination of low barriers to entry of commodity technologies fused with injections from venture money there’s constant innovation. The technology is innovating faster than companies and institutions can’t keep up.  Furthermore, the list of choices is staggering, such as the 145 brand monitoring vendors and 125 community platforms. In the end, consumers will define which technologies are adopted and at what rate.  To keep track of these trends, a combination of research from analyst firms and vertical specific media sites like AdAge and News blogs like Techcrunch, Mashable, RWW will provide illumination.
5. Risk of overhype Fast growth, consumer adoption and celebrity adoption of these tools has lead to a media frenzy.  Yet this space can quickly get overhyped as small changes in Facebook features yields huge news coverage. Perspective is lost when we’ve over focus on the disruptions from such simple technologies.  If there’s excess hype, then there will be a continued flood of investor money spurring more cloned companies –exasperating the situation. Decision makers should focus on business needs and business goals before succumbing to the latest headlines about Facebook changes and look at the long term aggregate view. Use data to construct a long term view.
6. Lack of qualified talent Finding the right talent is a challenge. For example, within the corporate space, companies have only been adopting these tools with great fanfare for a few years (Scoble, being one of the starting block at Microsoft in 2006-2007) Companies are ill-equipped to take advantage of this fast moving pace.  As a result, while those with experience and talent will quickly find an increase in salary, the demand for recruitment will result in a lot of job hopping. Time will slowly give experience to this budding industry, it’s not something that can be rushed.  Yet professionals should continue to tap into education, blogs, books and conferences to stay abreast.  This is an opportunity for publishers, educators, conference creators, and existing experts.  See this list of those in these roles in corporate now.
7. Measurement elusive While engagement (the interaction) of these tools and technologies is high, it’s not an effective form of measurement.  Secondly, while the interaction is high, it’s been difficult to tie back to commerce. While it’s easy to measure pokes, RTs and likes, they don’t tie back to true business measurements or KPIs.  Companies want more fans for their Facebook page but aren’t sure why.  As a result, efforts will spin focused on less meaningful metrics without a clear impact to business. All companies and professionals should measure their efforts based on business objectives.  In our latest report on social analytics, we’ve categorized this into 4 major areas: learning, dialog, supporting, and innovation.   Then, you can work with brand monitoring vendors, insight vendors, and eventually business intelligence software vendors.  Lastly, we’re hosting a conference on social commerce to tackle many of these issues head on.
8. Disparate Data and Irregular Standards. There are many vendors that are constructing their own systems.  Each social network has their own API, and despite efforts to bring standards, the fast moving landscape makes it difficult While the cultural impacts have been severe for many companies, gluing together ever-changing data sources creates confusion.  As a result, data will end up in silos that the CTO will have to glue together later, as well as the ever constant management of data formats. Although foundations have been setup to lead OpenSocial, there are other vendors like Gigya and Janrain are starting to provide technology that can manage the multiple identity systems.  Expect new tools like Social Inbox Aggregators to start to fuse information into one place, and eventually passing to Business Intelligence systems.
9. Culture shift creates an internal rift inside institutions. For nearly every institution, this has caused an internal cultures shift.  A few reasons: Power has shifted to the participants and companies realize they must now participate.  The ‘always-on’ mode means that business doesn’t stop at office hours, and now employees can choose the technologies to be used over the CTO. As a result, companies are struggling to get organized internally, and formerly silo’d groups (like Marketing and Support) must come together to support the same customer.  Furthermore companies who stem from command and control must give way to anarchist Cluetrain talk in order to stay relevant. The biggest opportunity is for internal evangelists and change management teams to lead the charge.  However they won’t do it alone as analyst firms will provide education and guidance and an emergence of new types of consulting agencies like Dachis Group, Ant’s Eye View,  will enter the fray along with traditional agencies like Organic, Razorfish, Ogilvy, and Edelman.  They won’t be alone as consulting firms like Deloitte and McKinsey will quickly come on board.
10. Privacy Woes scare companies and consumers. As more individuals share information the greater the risk that this content can cause harm by malicious parties.  Furthermore the more brands use this data to do accurate marketing, the fear of ‘big brother’ will increase. Facebook is the most telling example, as information that was first promised to be ‘just for your friends’ continues to be more open. As they slowly shift towards a more open model, you can see the reactions from consumer, press and media. Over time, society will start to normalize (look at Generation Y’s openness) and sharing will often be a default norm.  Expect services to emerge that will remove and hide information from the internet in order to keep consumers safely tucked away.

How to Overcome These Challenges
Taking on issues head on is a powerful way to take control over your own destiny. Use this list and develop strategies to hurdle over them.  Send this list to your leads at your company who focus on the future direction. If you work at a social technology startup or agency, send this to your executives now.  Secondly, print out this list and identify which challenges you’ve already taken on, and which ones that haven’t.  The savvy corporate social strategist or the smart entrepreneur will recognize the many business opportunities and models this list offers.  The truly smart folks will figure out how to improve their careers, add more value, and even profit by taking these challenges on directly.

This is just a partial list, and you can feel free to leave a comment with what you see as the biggest challenges in this space, I’ve kicked off a discussion in Twitter, and you can see more folks add to the list of challenges, see the tag #SocialChallenge.  Disclosure, some of the companies listed above are Altimeter clients.