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Creating value from the overlap between networks and communities

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What does the difference between social networks and communities mean to
business when looked at from both a marketing and an individual participant (customer) perspective?

It’s often said that the single most important feature that distinguishes a social network
from a community is how people are held together on these sites:

  • Why people join networks vs communities: old/new relationships vs sharing common interest with strangers.
  • What grows networks vs communities: social activity (offline = drink with mates) vs cmty: relationships/recognition/reward around common interest.

But what isn’t always explored is how the power of social networks vs communities varies from a participant point of view. So here I go in just two paragraphs:

1. To put it simply the power of community is that of influence with strangers, especially of top contributors/superfans for branded communities.

2. In social networks the impact is viral, that is the so-called network effect, where like
online dating its power is the ability online to connect with networks of networks – also known as ‘degrees of separation’ – that makes online networks especially powerful. Likewise a participant in a social network can have a disproportionate effect when an idea or call to action ‘goes viral’ when it gets picked up and acted on by complete strangers.

So business strategists therefore have to approach them differently. What makes it confusing is that your market may contain both a community and a network, for example at Lego there is a community of enthusiasts which create a lot of content but contribute little relative to the business bottom line. And then there is a large consumer mass market for the Lego product which can be found online through social networks like Facebook. Of course this is an artificial distinction too, as in a real sense which takes time to value for both businesses and participants: “Everyone in the community is a customer.”

At KLM they are harnessing power of social networks to allow people to join up with other travellers and book a seat next to someone with a shared interest – creating a mini-community for the duration of the flight?

So the real objective to create value may not simply be to understand the difference between networks and communities, but in knowing how and when they complement each other when approached from an individual participant viewpoint, and how individuals can create value through their actions in your online community or social network, and how they overlap based on a participant perspective. Make sense?

I’ve jotted down the differences faced with the same challenge to better show what I mean, using the example of a new gaming device, as outlined below:

Mass market: social network  Niche: online community
Business goal: <where fits business goals> <where fits business goals>
Measure: <enter network measurement> <enter community measurement>
acqusition/activation/purchase engagement/purchase
Target activity: Example: launch of a new gaming device Example: launch of a new gaming device
Internal resources: Social media manager together with /design/marketing: reporting to Head of Marketing Community manager together with design/marketing: reporting to Head of Marketing
Market focus: New customers Existing customers
Social tools: Facebook page/top blogs Branded community
Social monitoring: Use tool such as Radian6 to monitor network virality -> conversions Community analytics -> conversions
Key participants: Bloggers/influencers Superfans
Cross-over between network and community: Blogger access to talk with superfans Superfan response to new gaming device
Comfort-zone killer: Allow influential bloggers to talk with superfans Allow superfans to feedback on early stage product design ideas via private community

Background notes

Branded community builders Lithium comes to online community via games which are a natural community where people did not know each other, but have acquired a shared interest!

For definition source see the Lithium post from Dr Michael Wu, who goes into greater detail on the difference between networks and community (wide but shallow vs narrow but deep) in his post ‘Still Fishing Where the Fish Are?':

Social networks
i. Everyone has their own social network (whether online or offline). Everyone has friends, families, and people they are acquainted with.
ii. In a social network, people are held together by pre-established interpersonal relationships, such as kinship, friendship, classmates, colleagues, business partners, etc.
iii. The primary reason that people join a social networking site is to maintain old relationships and establish new ones to expand their network.
iv. Primary ‘enabler’ are a [common activity] in a social network.

Communities
i. Communities are held together by common interest or specific objective in a business setting. It maybe a hobby, something the community members are passionate about, a common goal, a common project, or merely the preference for a similar lifestyle, geographical location, or profession.
ii. Clearly people join the community because they care about this common interest that glues the community members together.
iii. Some stay because they felt the urge to contribute to the cause; others come because they can benefit from being part of the community.
iv. Primary enabler in community is [relationships], as these develop as a result of shared interests.

Yes, I was in the audience wearing an orange hoodie. No, that's not me!

Orange Different Business

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Having been on a lean start-up weekend for budding entrepreneurs, I know how tough it can be to get a great business idea off the ground. I’ve also gained some good experience working with entrepreneurs as a consultant, from online gaming start-up ‘Name That Place’ to a China-based surgical planning software company, to know it’s easier said than done. In thinking through the many issues around getting an idea to product stage and then into the marketplace – from validating the idea with customers, through to seeking investment, each stage requires time and effort. So it’s welcome news that mobile company Orange has launched the Win Your Business competition to give you the chance to follow in their footsteps.

Of course, the business-savvy folks at Orange aren’t just handing out investment cash, (but then money isn’t the key to start-up success). What they are doing is making sure you have the necessary support, advice and investment to get you started on the road to success – and change your life forever!

The competition panel of judges includes some of the UK’s most successful business leaders – Spencer McHugh and Martin Stiven of Everything Everywhere, the name of the combined Orange and T-Mobile business. Nigel Jones, head of one of the UK’s biggest integrated advertising agencies, Publicis Group UK. And Steve Neal, Partner at One of the UK’s top 20 firms of accountants Kingston Smith LLP. So why not tell them about your innovative new idea and you could become the UK’s next different business? They’re looking for a different idea, different approaches, clear strategies – something that is worth funding. The prize is worth up to £200,000 and includes not just investment capital, but legal advice, business planning advice, mentoring, and marketing consultancy.

To speed things up I’ve added the entry guide for you below, or access it online here (pdf). Then once you’ve registered and completed the application using the guide, you need to submit it by 31 March.

idea

What is your different business idea? As a guide, describe your idea in 100 words:

  • What is it that you propose to do?
  • What is your vision?
  • Is your idea innovative? How does it differ from what has been done before?

marketing plan

Take the judges through your topline marketing plan — this is how you’ll bring your strategy to action. As a guide, try to do this in 500 words:

  • Evidence of your market research
  • An understanding of what are your competitors doing
  • What is your vision?
  • Identify your target market — who is it for?
  • Lead times
  • Any regulatory restrictions
  • Marketing penetration strategy

financial plan

Take us through your financial plan — have you identified the level of business financing you will need to grow? As a guide, try to do this in 400 words:

  • Balance Sheet
  • Cash Flow Analysis
  • Profit and Loss Analysis
  • Break-even Analysis
  • Personnel Expense Forecast

why different?

Tell us why your idea is exciting, different and innovative and why it should be considered for the prize. As a guide, try to do this in 200 words:

  • This doesn’t mean the product or idea has to be completely brand new – it may be a different approach to an existing idea or concept

operational plan

Tell us how your business will run and how you plan to get your products/service to market. As a guide, try and do this in 400 words:

  • Who is doing what?
  • What are the day to day activities?
  • How will the suppliers and vendors be used?
  • Who are the suppliers?
  • What are the labour requirements?
  • What are the sources of raw materials?

So that’s pretty much it. Just a reminder that the deadline for submissions is 31 March. So get involved, and share this opportunity with your friends.

 

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