All posts by Anthony Nemelka

Is Facebook a Bubble?

Today’s post is brought to you by Anthony Nemelka, a long-time veteran of the social business technology scene and currently the CEO of Teleplace, Inc.

The best, most easily actionable investment advice I ever received was from my economics professor at college. He told his students that his investment strategy has always been to bet against the cover of Time magazine.

By the way, he was the only professor on campus who owned an S-class Mercedes.

My eyes have been drawn to the cover of Time ever since. And while his principle has proven to be less useful in the world of politics, it has proven to be eerily predictive in the world of business.  If his principle holds true, Time magazine’s 2010 Person of the Year is in for some trouble.

I for one am not celebrating. In fact, I’m very worried. Many in Silicon Valley would suffer immensely if Facebook turns out to be a bubble.  A lot of time, money, and energy have been invested in the Facebook ecosystem. An implosion of that ecosystem would have enormous negative consequences on everyone living here.

But if we apply Peter Thiel’s definition of a bubble (a true bubble is when something is overvalued and intensely believed), it certainly looks like Facebook is a bubble. Judging by the number of investors desperately trying to get their hands on Facebook stock at any price, the bubble is only getting bigger.

Of course, a bubble getting bigger is another sign of a bubble. But the ultimate sign of a bubble is its bursting.  So what are the signs of a Facebook bubble burst?  Here are my top 5 (and notice I left off their inability to penetrate China):

  1. Failure of Facebook to impact how businesses operate
  2. Negative coffee shop chatter among high tech professionals in Silicon Valley
  3. Apple’s embrace of Twitter
  4. Google+
  5. Facebook’s penchant for stealing

Working backward, it’s not ok steal. Yet Facebook seems to be practically built on the premise that it is. The traditional punishment for stealing was to cut off a hand.  Now the punishment is to divert our eyes. Talk about a valuation killer for a consumer Web company!  This will be like gasoline on a fire if a bubble ever begins to bursts.

What Google is about to deliver with Google+ looks spot on. Others seem to think so too. The Chinese government apparently concurs as well.  That, combined with Apple’s passionate embrace of Twitter, puts a pretty wide moat around the exploding mobile apps market. Mobility will likely prove to be the ultimate value creator for social networking. Yet Facebook is designed, literally, to replace a book with faces. Not much mobile about that. And now the two dominant mobile OS vendors will be actively working against them. Bubble, bubble, bubble, bubble, bubble!

Then there’s the Silicon Valley coffee shop chatter. To get an early idea of what high tech insiders are sensing, there’s nothing like going into places like University Café, Coupa Café, or some of the dives in the inner mission district of San Francisco, sitting down, and just listening. I do it all the time. And I’ve heard a lot of negative comments about Facebook for months now. The common theme is a sense of user dissatisfaction with Facebook. At first I couldn’t quite put my finger on why people think users are dissatisfied. But the picture is becoming more and more clear. People think of the Web as an unbounded, constantly growing and evolving ecosystem. Yet Facebook constantly works to try to keep users firmly planted in its own walled garden. That is leaving users with a sense that they’re missing out on something on the other side of the wall.

I can’t imagine a more dangerous feeling among users. There is nothing that high tech entrepreneurs enjoy more than knocking down walls and showing users what’s on the other side. Eventually, and probably sooner rather than later, what’s on the other side is going to look a heck of a lot more interesting to users than Facebook. And that will be the pin on the Facebook bubble.

This brings me to the world of business. Unfortunately for Facebook, the tendency for businesses to continue to use legacy technology long past the point of obsolescence won’t come to Facebook’s rescue. It saved IBM, it is saving Microsoft, and some day it may save Google. But Facebook has had little impact on how businesses are run and on how people actually do their jobs. As Esteban has argued many times before, Facebook’s role to business is largely limited to that of a channel.

For many in the social business community, this has proven to be a big disappointment.  Many companies have been built on the premise of “Facebook for the Enterprise”.  But as I discussed in a previous post, things aren’t working out that way. That leaves the social business community yearning for a new paradigm to hitch its wagon to. It needs a social paradigm that businesses will relate to.  And Facebook is not it.

So what do you think?  Is Facebook a bubble?  Would you be happy or sad about that?  Oddly enough, a Facebook bubble could be the best thing that ever happened to social business. Even so, it would be very, very painful.

Is Facebook Anti Social?

Today’s guest post is from Anthony Nemelka, a long-time veteran of the social business technology scene and currently the CEO of Teleplace, Inc..

Whatever happened to Second Life?  I asked that question to a group of kids the other day and their response was somewhat unsurprising: “What is Second Life?”

Clearly, immersive 3D collaboration technology has failed to live up to the hype of some of its early advocates and visionaries. Reflecting some of those expectations, I recall a senior analyst at a well-known IT consulting firm once telling me he was certain that Second Life would beat out Facebook as the preferred platform for Web-based social interaction among consumers. That prediction was made in 2007, and he was just one of many who thought consumers would prefer 3D gaming environments over text and pictures when interacting with their friends over the Web. Online multi-user gaming was exploding at the time, and why wouldn’t users prefer a UI that more closely simulates the real world?

By the end of 2010, that analyst admitted he had been completely wrong. “In the end,” he said, “text and pictures won.”

But I think we should stop using war analogies when it comes to describing the business of technology. Winning and losing imply permanence. When it comes to high tech, there is no permanence. Just ask Microsoft and Apple.

Technology adoption is much better understood—and predicted — in the context of how it’s being used. When it comes to immersive technology, online gaming is a great example. I recently observed that same group of kids playing a game with each other over the Internet using Xbox Live. These kids had never actually met in person. They lived thousands of miles apart. But the interaction between them was little different from what would have taken place had they been playing in their own backyard. It was highly interactive. There was a lot of shouting, with a few gestures thrown in for good measure. It was structured yet unpredictable. It demanded tremendous focus. The strengths and weaknesses of each of the players were readily apparent. Peer pressure was rampant. There was a clear pecking order, and alliances ended up separating the winners from the losers. In the end, it was shared experience—not an individual one — and that’s what made it feel highly social even though the users were thousands of miles apart.

What I observed that day was far different from how those same kids interact on Facebook. Though we call Facebook a social network, social networking is not a good contextual description of how it’s used. Facebook is more like a hole in the fence of your backyard allowing you or your neighbor to peek in on each other from time to time. It’s certainly not about shared experiences at all. At its core, the Facebook experience is a clever amalgamation of voyeurism and narcissism. It’s either all about me or it’s about what I’m going to discover about you. In the old days they called that anti-social. Now we call it being social? Really??

Of course, neither narcissism nor voyeurism is encouraged at work, and that may be why the concept of “Facebook for the enterprise” has never really taken off. CEOs understand the concept of Facebook, but they struggle to see how it’s appropriate in the context of work.

Group interaction in the context of work has a lot more in common with what I observed in those kids playing Xbox Live than it does with Facebook. Work-based collaboration is highly interactive. It often involves a lot of talking and gesturing. It’s structured yet unpredictable at times. It demands focus. The strengths and weaknesses of other people are readily apparent. Peer pressure is rampant, and there’s always a pecking order—both formal and informal. Alliances often separate the winners from the losers. And in the end, it’s a shared experience and a shared outcome, not an individual one.

Though I’m a veteran of the social business software market, I’m convinced now more than ever that the asynchronous collaboration technologies most often associated with social business software are falling short of what’s needed for enterprise collaboration. The technologies are simply inappropriate for the context. Workers need technology that more closely replicates and integrates with how they interact in person. In the end, the technologies best suited for that will likely have much more in common with Xbox Live than with Facebook.

What Social Business Needs Now

Today’s guest post is from Anthony Nemelka, a long-time veteran of the social business technology scene and currently the CEO of Teleplace, Inc..

I have a lot of young friends. Many of them turn to me for both personal and professional advice. It’s kind of scary, actually, when you realize you’ve become the mentor rather than the mentored.

Because of that, I’ve been thinking a lot about the future and how to best prepare oneself for a world of rapid and constant change. It’s a difficult environment for good decision making and a reminder of why social collaboration is transforming the way we make decisions every day. It’s the only way to cope.

Of course we all try to make the best decisions possible. But I for one have found that the pace of change has obsoleted most of ways I made decisions in the past. In fact, I’m down to about 4 solid general purpose tools in my decision making toolbox:

1. The Golden Rule (for basic survival)

2. Maslow’s Hierarchy of Needs (to better understand why people do what they do),

3. Algebra (to help identify the most important variables in any situation), and

4. Walter Gretzky’s admonition to “Skate where the puck’s going, not where it’s been.” (to keep yourself thinking ahead)

I’ve been using these tools quite a lot lately. They’re very powerful and easy to carry around with me all the time. I certainly had them with me as I attended the recent E 2.0 conference, and boy did they come in handy there.

By the end of the conference’s first day, I realized that something had fundamentally changed. The evangelical conferences of the past had given way to practical conversations about standards and best practices. It appeared that the Social Business (aka E 2.0, Social CRM, etc) community had accurately predicted where the puck would be and was now in firm control of its destiny.

But it was equally clear that no one was celebrating quite yet. Some, oddly, were even declaring defeat. I found myself wondering what’s going on here? Surely everyone should be thrilled with the apparent progress—not moaning about it!

But as any hockey player will tell you, getting your stick on the puck doesn’t count for much. It just gives you a better chance of shaping your destiny. And perhaps that’s the challenge now facing the Social Business community. Collectively, we are in a great position to shape our destiny. We’ve successfully skated to where the puck would be. But now we face a conundrum:  where the heck is the net??

Being reflective for a moment, I think the Social Business community has done a poor job defining what success looks like. We talk transformation, but we don’t describe it in a way that gets anyone excited. We’re like a bunch of pioneers on our way to California who never talk about why any of us should want to go there in the first place. And that could be why some among us have been sounding so pessimistic lately.

That needs to change. And fortunately it is changing. But it’s not the vendors or consultants that are creating the change. It’s the users. Organizations are transforming the way they operate. They are deploying social business tools and techniques to great success. And they’re doing so because they have to. It’s the only way for them to cope. And the fact is that they are in control of the puck now, not the Social Business vendor and analyst community.  We skated to where the puck would be, but users—large enterprises in particular—are in control of the puck. They are the ones defining success now.

So all of us Social Business vendors and analysts should know exactly where the net is located. It’s right behind us. Our customers are backing us into the net. I know that sounds a bit ass-backward, but that’s how evolution works. Evolution is an exercise in ass-backwardness, and this market is evolving quite quickly now. We’re being pushed by our customers backward into the net. And frankly, we’re beginning to look like a bunch of dorks. It’s time we all turn around and face the net. It’s time for a fresh round of listening to our customers.

So what are users saying to the Social Business community?  A look at some of the newer attendees of the E 2.0 conference lends some interesting clues.

For one, all of the major Unified Communications folks had a major presence at the conference this year. Their message was quite simple: social business collaboration tools need to be deployed as part of an enterprise’s overall communications strategy and infrastructure. Unified Communications (UC) is giving way to Unified Communications and Collaboration (UC&C), with social business collaboration being a core component of the UC&C stack. How do you think these vendors came up with this idea? Yup, they heard it from their customers. They’ve been told that compliance and security requirements need to apply to social collaboration in the same way they apply to other communication and collaboration activities in the enterprise. For those with a lot of experience working with large enterprises, it’s a pretty obvious requirement and one we better get our heads around fast.

HR business process folks also had a major presence at the conference this year. Their message was also quite simple: communication and collaboration need to happen “in the flow of work”—a phrase first coined by the Social Business community’s own Michael Idinopulos a few years ago. Where do you think they heard that? The same place Michael did—from customers. People want and need to communicate and collaborate as they perform their work, which is usually in the context of a business task—automated or otherwise. At the conference, Geoffrey Moore referred to this as live session collaboration, which in his opinion is the next major opportunity and challenge for the Social Business community. Whether that’s true or not, it’s easy to understand the benefits of making real-time communication and collaboration tools seamlessly accessible from within business applications, email included.

Social CRM advocates and Community Managers also turned out to the conference in large numbers. Their messages, too, were clear: stop erecting barriers between internal and external collaboration, and recognize that there is a science behind maximizing the effectiveness of enterprise communication and collaboration. Ignore these realities at your own peril. And yes, they, too, having been hearing this from users.

So what are users telling the market?  Integrate with how we operate. Don’t interrupt. Become part of the fabric. Follow our lead. We’re in control of things now.

What will customer-driven success look like? I suspect that activity stream monitors will begin to be proudly displayed in the lobby of every business in America (I’m only half joking). Certainly the press will begin to talk about social businesses in the same way it talks about Web businesses—huge disruptors to old-style businesses. Social Business management consulting practices will become highly strategic to all the large consulting firms. Tightly integrated, cross-enterprise Social Business collaboration tools will be as accessible and easy to use as a telephone. Visionary investors will make billions of dollars feeding this mega-trend through wise investments in the ecosystem.  Entrepreneurs will make wads of cash and blow it all on exotic sports cars.  And the government will institute a Social Business tax because social businesses will be the only ones making any money.

So that’s my vision of success for the Social Business community. What’s yours? If nothing else, I hope you have your skates on!

What Social Business means for Cloud Computing

Anthony Nemelka is a long-time veteran of the CRM industry, having previously served as a senior executive at both Peoplesoft and Epiphany and most recently co-founder and CEO at Helpstream.

At a well-attended Salesforce.com event at Oracle Open World two weeks ago, Marc Benioff delivered, in his typical style, a very well articulated argument for why Salesforce is poised to dominate the shift from client/server computing to cloud computing in the same way that Oracle dominated the shift from mainframe computing to client server.  It was a strong argument, graciously delivered given it was on Oracle’s stage. Shortly thereafter, Michael Dell joined Mr. Benioff and threw his support behind the shift to cloud computing, saying this shift is one of the reasons why Dell recently purchased Perot systems.

While many folks continue to debate whether or not cloud computing represents a migration or a transformation, those who have the most to gain or lose seem to be voting with their wallets. For the time being, Larry Ellison seems to be having fun poking holes in the cloud computing argument, but I don’t think it’s an accident that he allowed Mr. Benioff’s message to be delivered on his stage. This is one major trend he wants to stay very close to, with good reason.

As Mr. Benioff and Mr. Ellison were busy making their cases for and against the merits of cloud computing, a less evolved but equally important debate continued to simmer about the transformational impact of social business software (SBS).  At Oracle Open World, this debate was focused around CRM, the social business incarnation of which is popularly referred to as Social CRM (SCRM).

Sounding very similar to the arguments questioning the transformational impact of cloud computing, a good many incumbents in the CRM space continue to assert that, from a systems point of view, SCRM enablement requires no more than an add-on feature set to existing CRM systems. Add some collaboration and community features, sprinkle in social media support, add integrated alerts from Twitter and Facebook, and you’re all set.

The contrary view, outlined in one of my previous posts and further illustrated in an insightful post by Phil Wainewright, is that securing the competitive advantages associated with socially-enabling your business requires some serious re-thinking and re-design of your business strategies, policies, procedures, and processes. Unless you plan to drive similar projects across your entire business, a social-enablement project performed in one part of your business will chafe against the old ways of doing business in another. Social-enablement projects deployed in a single-process silo will likely fall far short of expected benefits. Because of this, the folks in the social business transformation camp argue that SCRM is best viewed as a critical component of a comprehensive social business enablement strategy, not simply an extension of existing CRM systems and processes.

Whether it’s cloud computing or socially-enabled business, there is a lot to be gained or lost by how these trends evolve in the marketplace.

It strikes me, though, that cloud computing and social business enablement are more closely linked than most people realize. The success of one will likely increase the likelihood of success of the other in the same way that the success of packaged enterprise software fueled the success of client/server computing two decades ago. This time around, it’s the “webification” of business that’s driving the shift, with social business enablement looming large as the next major incarnation of this phenomenon.

From an enterprise application software point of view, nothing is hotter than social business software. I’m constantly hearing great ideas for using social media, social collaboration, crowdsourcing, communities, and myriad other approaches for leveraging the Web to improve the efficiency and effectiveness of enterprises. If you’re a high tech entrepreneur, choosing the cloud computing platform for delivering your innovation is a no brainer. Why? For the same reasons entrepreneurs chose client/server computing two decades ago. The APIs are more flexible and forward looking, the development tools are easier to use, it’s the best way to differentiate from entrenched competitors, it’s a lot cheaper for customers, it’s the *only* platform for new products and services that investors will fund, and, probably most importantly, you can do a lot of “cool” things that are impossible to do with the old platform.

During the last big transition, I was working at IBM selling mainframe systems. Sometimes you learn a lot from your mistakes. I certainly did. It’s interesting to see that this time around Microsoft has become IBM, Google has become Microsoft, Salesforce has become Oracle, and Oracle continues to stay perched atop the high point of the technology adoption curve–ready to acquire its way into the most profitable phase of any major technology trend.

So what did I learn at Oracle Open World this year? I learned who will still be around a hundred years from now. And I learned a lot more about how the Web continues to change *everything*.  Social business and cloud computing are here to stay.

What Social CRM means for the IT Department

If he’s not careful, Anthony Nemelka may become the Paul Lynde of guest bloggers. This is his second guest blog post this week and surely not his last.  Anthony is a long-time veteran of the CRM industry, having previously served as a senior executive at both Epiphany and Peoplesoft and most recently co-founder and CEO at Helpstream.

You may have noticed that Esteban’s Social CRM discussion panel scheduled for later today is targeted primarily at CIOs and other IT department professionals. This is the first time I recall seeing an SCRM discussion panel focused primarily on IT professionals.  The Social CRM community has thus far primarily (and rightly) focused on the needs of the customer first and customer-facing business functions second.  But the IT department—particularly in large organizations—continues to be the function primarily responsible for designing, implementing, and managing the business systems required to make things like Social CRM a reality.  Like it or not (and I know that many practitioners in our community do not) appropriately addressing the needs of the IT department is critical to this process.

Though the theme of today’s meeting is “Is Social CRM for Real?”, I suspect that many of the people at today’s meeting will actually be thinking “What exactly is Social CRM and what does it mean to me?”  Of course this question has been asked and answered in a number of blog posts by various members of the SCRM community, but the perspective of the IT department has been largely ignored.  So in preparation for today’s meeting I thought I’d take a pass at trying to explain what Social CRM means from an IT department perspective.

#1  Social CRM represents part of the general trend toward socially-driven business.

From a business systems point of view, becoming a socially-driven business requires that you re-think and re-engineer your business systems and processes in order to take advantage of Web-based social tools, technologies, and concepts.

The general approach is similar to what you’ve done in the past. With each wave of new technology comes a wave of business process innovation. What’s new this time is that getting rid of people is not the goal.  Leveraging people and Web-enabled connectedness is the goal. The people part of the equation is the most critical component now.

#2  Social CRM is different from Enterprise 2.0 in that it’s primarily focused on improving customer engagement.

With Enterprise 2.0 tools the asset being leveraged is employees. With Social CRM the asset being leveraged is the customer.  Done right, Social CRM allows you to do much more than just serve your customers better.  It helps you unlock the power of your customer base to serve the broader needs of your business. Whether that’s helping you identify more sales leads, solve problems for other customers, prioritize product features, identify competitive threats, and so on, it’s about taking an under-utilized asset called the customer and transforming it into an active asset to improve business execution.

The Social CRM toolset broadly enables a) rapid, asynchronous, real-time communication and collaboration, b) social profiles and permission-based access to people and information, c) real-time data solicitation, aggregation, and analysis, and d) assignment and tracking of the activities required to appropriately respond to customers. ROI is measurable and compelling, driven by better and faster decision making and more efficient and effective business operations.

#3  Social CRM is not social media.

Social CRM leverages social media but it’s not a replacement for a social media strategy. Social media are the many-to-many communication vehicles enabled by the Web.  Social CRM, on the other hand, is focused on how you run your business.  Or as explained by Paul Greenberg, the godfather of Social CRM, it is “”the company’s response to the customer’s control of the conversation.”

For most companies, that response today is completely reactive.  A customer has a bad experience, a video about it is posted YouTube, the company feels pain, and people inside the company try to figure out how to respond.

But Social CRM done right enables a response to be delivered in a more automated, predictive, and even anticipatory way. SCRM accelerates the process of communicating, learning, determining appropriate actions, and carrying out those actions. Ultimately, the ability to anticipate—not just react—to customer-related opportunities, needs, and concerns is the disruptive competitive advantage enabled by Social CRM.

#4  Social CRM will definitely impact your IT infrastructure and resources.  The time to plan is now.

New tools are always built on the latest technology platforms. For Social CRM that means the Web. Whether you call it SaaS, On Demand, vendor-managed appliances, or Cloud Computing, you should expect that the tools and technologies for enabling SCRM will be available exclusively on these deployment platforms. If your company has already embraced SaaS and its cousins, you’re in good shape from an infrastructure point of view.

But the biggest impact to your resources will likely be driven by the business process re-engineering efforts required to optimize Social CRM for your business. Each company will have somewhat different requirements and IT infrastructure issues to work through to move from the old way of doing things to the new way. Skill and resource requirements will vary accordingly. Think big, start small, and expand as you experience success. That approach has proven effective time and time again in this type of situation.

So what do you think?  What would you add or subtract from this list?  What else do you think it important for the IT department to know about Social CRM?

Social CRM or Social Business?

Anthony Nemelka, today’s guest blogger, is a long-time veteran of the CRM industry, having previously served as a senior executive at both Epiphany and Peoplesoft and most recently co-founder and CEO at Helpstream.

When the CRM community first started talking about the potential for using social technologies to improve customer relationship management, the biggest debate was over what we should call it. Kudos to Paul Greenberg for putting that debate to rest and declaring it “Social CRM”. Since then, the Social CRM community has done a great job defining and legitimizing SCRM as a valid business concept–building a robust community of customers, experts, and practitioners along the way.

The debate within our community has since shifted to issues of execution. One of the more interesting debates is whether or not SCRM tools and technologies represent an extension of existing systems and processes or a completely new approach to doing business—a.k.a. a paradigm shift.

Paradigm shifts are tricky things because, by definition, most people don’t see them coming and only recognize them in hindsight. But this question of whether or not SCRM represents a paradigm shift is a critical one, both for the companies developing SCRM related products and solutions and for the companies attempting to deploy them. The wrong bet can mean the difference between dramatic success and complete and total failure.

Software vendors and solution consultants are aligning themselves on both sides of this debate, along fairly predictable lines. Those who have been around for a while tend to see SCRM as an extension to CRM. Those who haven’t been around as long tend to see it as an opportunity to redefine what we mean by CRM. And some of us simply like change and will vote for anything that causes the greatest disruption—you know who you are!

As the co-founder and former CEO of Helpstream, it should come as no surprise that I am a strong advocate for disruptive innovation. Just as the ubiquity of WANs and distributed computing presented a whole new paradigm for business process innovation in the 1990s, the integration of people-process-technology enabled by the Web increasingly requires that companies re-invent how they operate. Those companies that merely extend and modify what they do will be defeated by those that figure out a new and better way. Think Southwest vs. United.

Though customer-facing processes are a great place to start figuring out how to leverage social technologies, I think it’s important to consider what being social means to a much broader set of business challenges. Will there ever be Social ERP, Social HCM, Social SCM, Social BI, etc.?  I continue to be amazed at how many high tech entrepreneurs are figuring out how to leverage Web-based social collaboration and data aggregation to improve just about everything a business does. Will these innovations simply extend and improve existing processes or do they represent a new paradigm that requires a complete re-thinking of how a business should operate?  I suspect it’s the latter.

So what do you think?  Will Social CRM eventually be viewed as an extension of existing CRM or as just one critical component in adapting to the realities of a Web-connected world? Will companies deploy SCRM as a result of thinking “how can we improve customer relationship management?” or will they deploy SCRM as a result of thinking “how can we transform ourselves into a socially-driven business?” The only thing I know for certain is that it will be a very fun ride.

Join Anthony Nemelka, Lyle Fong, Anthony Lye, and Christopher Carfi in a panel discussion moderated by me, Esteban Kolsky, to discuss the future of Social CRM.  Details can be found here: http://www.meetup.com/CIO-IT-Executives/calendar/11218780/