IF YOU’RE NOT PAYING, THEN YOU’RE THE PRODUCT…
Over the years, one of my long-term clients was Andrew J. McKelvey, founder, chairman, and principal shareholder of Monster.com. And during more than a decade of one-on-one contact with McKelvey, I learned a lot from him, not the least of which was some serious truth about the nature of social media.
McKelvey had purchased the Boston-based job site, The Monster Board, from Jeff Taylor. At the same time, he retained Taylor to continue running the company as it morphed into the NYC-based Monster.com, which McKelvey took through a very successful IPO in 1996.
For a number of years, Monster Worldwide was literally a money-making machine. One day, unable to contain my curiosity, I asked Andy McKelvey what the key was to that success. He told me it was pretty simple and that, indeed, it was Jeff Taylor’s vision that had blazed the trail.
According to McKelvey, Taylor’s genius lie in being among the first to recognize that the main asset of a job-search site was its database of job-seekers. And that the right way to go was to make the board free for job seekers (who would load up the database with their resumes and personal information), then sell access to that data to employers and recruiters — over, and over, and over again.
Thus the paradigm was set: On social media, if you aren’t paying, you become the product …
You might, at first glance, think that isn’t so bad. After all, what’s the big deal about trading a small loss privacy in exchange for a “free” membership to Facebook or LinkedIn or Twitter or beBee or the dozens of other extant social networking platforms?
The big deal is that a host of undesirable results flow from the monetization of user/member data, including but not limited to:
- The incessant drive to grow the user/member base as much as possible, using disingenuous gamification if necessary (which it is most of the time).
- The perceived need to keep users/members working on the platform as much as possible during the day (or night) in order to maximize what is known in the industry as “MAUs” (monthly average users) in order to bolster the rates sought for advertising space and access to the user/member database.
- The compulsion to seek the lowest common denominator for content, in order to attract the largest possible audience, irrespective of the effect on the level of content quality.
- The cynical desire to control both content and the distribution of content algorithmically in order to create a user/member demographic that attracts the largest potential group of data miners.
- The constant impulse to manage from behind a veil in accord with hidden agendas so as to avoid active resistance — or worse, rejection and flight — by the user/member base being exploited.
Wow! It all sounds so nasty when you put it that way, doesn’t it? Well yes, it does because it is nasty … and cynical and manipulative.
Social media operates in accord with a conceptual paradigm that has predominated for the past two decades, and will not become user-centric until there is a major shift in that paradigm …
As I see it, the key shift involves eliminating the default universal monetization of user/member data and a move to a business model that is based on universally-affordable payment for services rendered and received.
The results of such a paradigm shift would include but not necessarily be limited to:
- The transition to a user/member-centric management culture that seeks to meet the needs and best interests of its constituency, rather than the vagaries of venture or other investor capital.
- The elimination of any need to gamify user activity in order to keep such activity on the networking platform involved.”
- The release from a constant need to pursue expensive, but largely meaningless “improvements” simply for the purpose of holding the interest of a fickle and uncommitted point-and-click user base.
- The freedom to concentrate on distributing high-quality content that incorporates substantive value for readers, free from any need to find the lowest common denominator in order to artificially boost user/member numbers into the hundreds of millions.
- The ability to achieve the best of what the internet and the “information superhighway” originally promised.
“Whoa!” you say, “That would cost me a lot for something I’m now getting for free.” However, that is not really the case because …
The current SM paradigm is the creation of entrepreneurs chasing the the big IPO or buy-out payday. And as such, it is exceptionally overhead-intensive and wasteful …
Consider, for example, that in 2015, LinkedIn managed to rack up a net operating loss of approximately $151 million on revenues of $2.99 billion. (LinkedIn Archive of Annual Reports)
During that fiscal year 2015 — the last full fiscal year before the acquisition of the company by Microsoft — LinkedIn spent more than a billion dollars on marketing and sales alone, plus more than three-quarters of a billion dollars on product development, much of which was later withdrawn. All whilst user complaints and dissatisfaction continued to grow ever stronger.
Look, I make no pretense to being an entrepreneurial genius. Far from it. But even I can see that there is something wrong with the operational paradigm that was (is?) at work on LinkedIn and a number other platforms.
The fact is you could do much better and be more profitable with a platform that had from, perhaps, only two to five million users, each paying maybe one to two dollars per month for membership …
Especially if you supplemented paid-membership fees with additional revenues from a moderate amount of paid content and straight-up advertising. Not to mention you could put transparency, integrity, and credibility back into the transaction.
What’s that you’re asking now? What would happen to your chances to reach 546 million or more potential buyers with your social marketing efforts? Fact is, those chances never existed in the first place.
The ultra-high member numbers attributed to many of the major social networking platforms are swollen with effectively inactive users, fake users and made-up profiles. To such an extent that, at one point, it was estimated LinkedIn actually had fewer than 20% of its reputed (at the time) 400 million members reported as using the platform on average once a month or more.
Moreover, on LI, algorithmic control and manipulation — nominally dictated by the burden of managing distribution to the reputedly huge membership — prevented the average user from reaching more than about 2% to 5% of his or her connections and followers. Which might amount in most cases to fewer than 100 recipients.
The question really becomes whether it’s better or more effective to reach 100 people out of 400 million or 1,000 people out of only 4 million. Not exactly a brain-buster, if you ask me…
OpenWorldNorthAmerica’s not-for-pofit business model requires only 1,000 early adopters to initiate a meaningful beta-phase test.
During this current alpha-phase development, we’ve been moving rapidly toward establishing a fully-functional networking platform with core services such as a Digital Content Distribution Network (DCDN), a hosting and referral facility for professional and small-business oriented discussion groups, moderated member chat spaces, and channels for sponsored content, including the posting of digital business cards, brochures. and introduction videos. Additional member-centric services will follow in reasonably short order.
Early adopters will receive complimentary premium membership services throughout beta-phase testing and refinement, and then, for at least the first year of post-beta-phase operation.
OpenWorldNorthAmerica.org believes that shifting the paradigm is the necessary precursor for bringing professional and small-business social networking more in line not only with what it could be, but also with what the internet originally promised to be. We also believe that networking will not change for the better unless we all take steps to help it evolve to a higher and better state.
If that goal resonates with you, take a couple of minutes now to join us or to follow our progress. Please, as well, share this information around to your network, to make sure others also know about the OpenWorldNorthAmerica initiative. And do not make the mistake of thinking that if you are not based in North America, you cannot join us. For you can belong to OpenWorldNorthAmerica irrespective of where in the world you live and work.
For more information, go to www.OpenWorldUSA.org.