Part 2: The Four Facets of an enginet- Programming, Activation, Motivation and Differentiation
SHAHAR: You mention Ebay and Ebay is almost the perfect recipe for a networked media business. Could you talk a little bit about that? How it became that way? And what is the key factor there?
JIM: Well it’s not the only one, but it is certainly a good example. They didn’t do it on purpose; it was just one of those things where they picked a business and archetypal user-behavior (auctioning) that resonated together. By the way, I didn’t derive the definition of an enginet from Ebay. It just so happened when I went back to apply the principals that I’d identified as common to an enginet, eBay had activated more of the characteristics of a quintessential networked engine than anybody else, or as many as anybody else.
There are four components that we look at when we describe an engine of engagement or enginet, and those four things are:
1) Programming: That “stuff” that makes up the engine, and the context through which it’s presented.
2) Activation: What modes of behavior—what “roles”—are you activating in the end user, the audience?
3) Motivation. There are several archetypal forms of motivation that you can employ in these engines that get folks to activate in those roles.
4) Differentiation: Given that the internet is this great commoditizer, there are only a handful of things that you can actually do to differentiate yourself and make and keep yourself distinctive from others out there. Whether that’s others that aren’t n your space necessarily, but they’re still taking up the time of the user, or it’s somebody directly in your space that you’re trying to compete against.
I’ll start with the second one, which is activation. And this is one of the things that have actually differentiated Ebay and that is: if you think of the traditional value chain in commerce, it can be described in five steps with is:
1) Production or creation;
2) Distribution;
3) Marketing—getting people to come—the why, where and how;
4) Vending or exhibition—where you actually touch the consumer; and
5) Consumption.
Typically the user, the end user if you will, we would call the consumer. And that’s exactly what [“users”] did. They read, they watched, they listened to, they ate—whatever [the product being hawked called for]. Industry treated us essentially as farm animals. The entire job of industry was to get people to buy something or to watch something or to listen to something. And what happened was that networked media—again, Web, mobile wireless, etc—from the very beginning allowed the individual to climb up that value chain and start taking on the role of producer, distributor, marketer, vendor and, of course, consumer. Ebay was arguably the first—I mean you had the Yahoo’s of the world out there and the Netscape’s that were allowing people to maybe be a producer (create searches, etc), or maybe be a marketer (recommend a browser, create links for the world wide web to grow, etc), but Ebay [activated] all five roles… instantly, you know. They [enabled] people to become a producer, creator, marketer, vendor and consumer all in one. [A service like eBay represented] a whole different type of multi-faceted animal, and programming to that kind of end-user is entirely different—it’s a paradigm shift and nobody talked about [at the most fundamental, teachable levels]. Even today, what, 12 or 13 years later you still hear people calling [users of sites like eBay] “consumers”; and then maybe you hear rumblings about so-called user-generated content, but that’s only a small facet of the type of individual that we’re really dealing with. If you want to deal with them on purpose, you need to understand their full nature—there’s a famous Ernest Hemmingway quote that [says] “you can leave anything out as long as you know what it is.” You’ve got to know who is the whole being that you’re dealing with before you decide “I’m [am or am] not going to activate them as a marketer. I’m [am or am] not going to activate them as a distributor. I’m going to make conscience choices instead of just sort of “stabbing in the dark”. Does that make sense Shahar?
SHAHAR: Yes, yes it does, and I would say for us “boomers” this is even more difficult, don’t you agree?” To give all this power—
JIM: For who? For the big companies you mean?
SHAHAR: Yes, but not only for the big companies, but as business owners today when I think “I have to adapt to social media, and I have to get what I know of the consumer and give them power and let them become producers.”
JIM: It’s true, [but I also] have to caveat everything I’m saying with “I’m not looking to, or intending to espouse dogma.” My intention is to create a framework so people can actually argue about it, discuss it and make it better and make it smarter so that we can do this on purpose, more efficiently, more economically and more expediently.
I was asked recently by a pharmaceutical company—”can we create a social network around our product, but can we also track our competitors?” Apparently their competitors routinely go in and bash them in an organized fashion. But they [asked] “can we stop them from doing that?” I said “Well, how organized is your opposition?” They said “Very.” And I said “well, then it’s impossible, you can’t stop them from seeding [a social media site] with negative messages.”
[Is everyone] familiar with the Wild Oats/Whole Foods thing, where the Whole Foods CEO got on message boards with a “Nom de plume” and he started essentially bashing Wild Oats to drive down their stock and drive them out of business? I mean there was nothing illegal about it, it was just a little unethical, but he went and did that. He was an organized opposition that was unnamed and anonymous. You can’t stop that on the web. So if you’re going to put up a site, you know, a message board, any type of social networking, any type of engine at all that is built around your brand or you product? It’s going to be really hard to have an organized opposition go in there and fool or try to fool the community. But there are ways of course to get around that. That is for example, to build an engine of engagement that attracts the *kind* of people that you want to attract into your engine and then you can lace your messaging within that so there is no framework for somebody to bash you.
But you can create a place where you can aggregate and create a self perpetuating engine for the kind of people—[psychographic, demographic, etc.] that you want to attract and you can then lace your message inside there in some kind of context. Does that make sense Shahar?
SHAHAR: Yes, yes it does. Now in my medium sized business, how can I turn my consumers into producers? This was one thing, when we met the first time that really caught my attention; your concept that we really can turn our consumers into producers in the tools that we use online. How do you see that for a small and medium sized business?
JIM: Well, I don’t know everything that’s out there in terms of resource, but in my current world views the holistic approach has to be self-taught because there is no definitive source. You have to piece it together on your own. It’s not like you can go to a [paint-by-numbers] seminar yet. I don’t know if you’ve ever heard of Syd Fields, he’s a screen writer—you can go to a Syd Fields [seminar] to learn how to write a story, a screenplay. There are a lot of places to go to learn how to write story structure or be a journalist or to learn how to do things that have been done for decades and decades. No (yet) so for building engines of engagement.
The good news is that the cost is [nominal to get in the game]. It’s not like writing a whole book before you release it. You should be releasing it chapter by chapter, and writing future chapters based on audience reactions to the earlier chapters. It’s a technique called “agile-adaptive.” In our case, what you’re doing is you’re putting up something… really anything… as long as it adheres to some core archetypal user behavior. You’re trying to figure out what the whole thing could be, and then you say “let’s build what we can build in two weeks.” You know, “let’s put up what we can build in two weeks, or a month or some short time frame and just watch what happens.” The good news is that the tools are so robust [compared to 13 years ago, the beginnings of the Web]. When I was at Warner Brothers we had to build everything from scratch—every measurement tool, every hosting tool, every ad-serving tool. You know, nobody had been there before when we were serving millions and millions of pages and we had to do everything from scratch. But now, you’ve got everything from Google Ad words, to Google analytics to all the back end hosting and all the tools you have on the back of which to build and the open source software out there. So, there are so many free or very cheap tools that you can get something up there pretty darn fast for little money. For example, one of the first things we built was the Addictionary (http://www.addictionary.org) which was a site for made up words and lingo. We just wanted to prove that we could put something up that would attract people for very little money. And we built the first one for about $3,000. And to date we’ve spent maybe you know, over a year and a half maybe $75,000 total, but reaching tens of thousands of people every month. We’ve spent nothing on marketing. Not a dime. Could it be bigger? Sure it could be bigger, but it’s a matter of looking at your investment and what you want to accomplish with this thing and looking at it—we look at this thing ever two weeks. Review the business value and business priorities every two week.
We’ve put our whole company through agile-adaptive management training. So literally every two weeks we look at every one of our products and we do a retrospective and we say what worked, what didn’t work, what measures, what trends are heading in the right direction and then we re-prioritize everything that we’re going to do with the engine and decide “okay, what are we going to do over the next two weeks?” And then we build that or we change that or we omit that and we keep doing that over and over and over again. That’s really one of the fundamental tenants and it really doesn’t matter how big you are. It’s a benefit to be a little company because most big companies can’t do this. If you’re a small or medium size business, you actually can do this and you actually can take these agile-adaptive techniques in incorporate them very easily. Which is, by the way, one of the fundamental precepts of what we call enginetworking or building engines of engagement that you have to “tweak”, you have to change, you have to iterate your product… by design. You cannot stay still. So if you want to get in this business, you can’t assume that it’s going to be “in the can”, “finished” or whatever. It’s always changing. Anyone who has ever had children out there knows what that’s like. That’s basically what you have to do and fortunately there’s a lot of resource out there that’s around for that particular approach and it actually came out of extreme programming which only started around 12 years ago, about the same time as the internet. And it’s constantly tweaking, constantly changing. Does that make sense?
- more -> Part 3: Activating users, and using Agile-Adaptive techniques to respond to their behavior
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