How far has crowdsourcing finance come in five years?


After watching this BBC report on crowdfunding I started wondering how the piece I wrote for ICAEW’s community in December 2008 on the power of crowdsourcing ‘Is web 2.0 enabling a new kind of financing?’ looks now in July 2014?

Certainly crowdfunding startups through investment (equity) has come along way, first with Crowdcube and more recently Seedrs, which was inspired by Zopa.

Screenshot 2014-07-11 17.10.23

Continue reading

How to design large complex online communities using social science


Sorry if I jump around a bit in this blog post but by reading these points, and listening to the video, you’ll have a better idea of how social science can help you design a successful community, using a specific kind of moderation approach. Or at least how to impress to use the difference between a theory vs design-type approach to community building to respond better to new customer needs.

OK, I am paraphrasing here so bear with me, with me taking notes from Robert Kraut’s Stanford presentation above. My aim is to show how social science can inform good online community design. So the first point is that Kraut makes that I want to highlight is that real community design is “highly multidimensional”. And that this is at odds with logic of social science which seeks to understand effects of one variable at a time, while all other variables are else held constant, to discover causality. OK, so that’s some of the fundamentals sorted. Skip to this section on the video to hear the explanation.

This social science approach is at odds with (i.e. online community) design where you are trying to figure out the configuration of all possible variables to have the effect that you want to have. Kraut says that basically with design you don’t want one variable at a time you want ‘kitchen sink experiments which are theory-based experiments which you want to try out in a relatively cheap way.

But they use agent based modelling – allow theory to be tested as models in community environment, change member behaviour, which change environment (see 1:12:56) – where the ‘Identity Benefit’ is greater when agent’s interests are similar to group interests:

Here’s how to simply capture that ‘Identity Benefit':
# viewed messages that match // # viewed messages

In comparison for the other principal type of community benefit to members Kraut identifies, the ‘Bond-based benefit’ is greater when there is repeated interaction. Kind of obvious I guess, but this is social science, so still worth stating!

Agent-based modelling and simulated communities results

And from simulated communities what Kraut found is that the simulated agent models (taking the place of community members) produced results very similar to that observed in real Usenet groups.

So the next step is that if we have a working agent model that shows how community works we can test out different types of moderation techniques, which can test in this simulated community.

From this Kraut found that ‘Personalised moderation’ out performs ‘Community level moderation’, though this really matters significantly when dealing with a large volume of content, or diverse content. In other words ‘Personalised moderation’ works well with large complex communities.


And as an example, I see this personalised moderation functionality  appears to be available in community platform Telligent’s latest version of their analytics, which sounds useful. Be good to know which other major community platforms like Lithium offer such beneficial functionality, and how well it really works in the day-to-day:

Your community can now offer its participants dynamic and personalized recommendations of both people and content. Telligent Analytics looks at your community’s data, compares it with each member’s unique interests, and then delivers personalized recommendations to that member. Telligent Analytics doesn’t just tell you how your community’s doing; it applies the analytics to improve your community members’ experience.

So if you want to go into this study applied in more practical detail here’s Robert Kraut’s paper (pdf) with the graphs and stats:

A Simulation for Designing Online Community: Member Motivation, Contribution, and Discussion Moderation – (pdf:

Or maybe you’d like to read the chapter’s of Kraut’s 2012 bookBuilding successful online communities: Evidence-based social design:

  • Resnick, P. & Kraut, R. Introduction [PDF]
  • Kraut, R. E. & Resnick, P. Encouraging contributions to online communities [PDF]
  • Ren, Y, Kraut, R. E. & Kiesler, S. Encouraging commitment in online communities [PDF]
  • Kraut, R. E., Burke, M. & Riedl, J. Dealing with newcomers [PDF]
  • Kiesler, S, Kittur, A., Kraut, R., & Resnick, P. Regulating behavior in online communities [PDF]
  • Resnick, P, Konstan, J & Chen, Y. Starting a community. [PDF]

How useful is the Community Manifesto for organisations?


Included below is the Community Manifesto created recently at SXSW, but how useful is it for your organisation? For example, how well does it support emerging new forms of community management, such as ‘employee advocacy‘?

And here’s some real community managers at the event talking about what it is to be a community manager:

How your community can help SEO (and vice versa)


I recently contributed to the discussion on the community manager forum e-mint on ways to make money from your community, and still keep your members happy. Today I was contacted by Peter Belden at Extole with a way which I’d tried myself when I worked at after the impact of Google’s search algorithm changes. Namely using user generated content to improve your site’s search rankings, and thus your ability for people to find you and shop if you have a store. So without further ado, here are their 3 big tips:

There are three tips that marketers should keep in mind when launching C2C social marketing programs to help impact and improve their SERP:

1. Engage your customers wherever they are: Customers engage with brands across their websites, social networks, purchase and post-purchase environments, in-store and more. The most effective way to drive participation in a C2C program is to promote it across channels; via your corporate website, email blasts, and on social networks to drive the highest awareness, participation, and amplification rate.
By giving consumers the option to decide where they want to engage, you will drive higher participation and foster more creation and sharing of stories.

2. Make sharing easy: Make it easy for customers to share stories about your brand, products, and services with their friends. Include relevant sharing options (email, Facebook, Twitter, Google+, etc.).

3. Increase participation through incentives: Give customer advocates a compelling reason to share with their friends. This could be an internal offer (free goods, discounts, or loyalty points), gift cards, or charitable donations. Make sure there is an incentive for their friends to make sharing more attractive. With relevant and appropriate incentives, marketers will see more sharing from their advocates, which will produce more social signals that can be picked up by the search engines.

The Bottom Line – Cultivating Consumer-Generated Content About Your Brand Is a Must

By implementing C2C social marketing programs, brands can cultivate advocate sharing of stories with their friends and social communities. These stories will be amplified across the social web and pulled into search engine algorithms, which improves brands’ SERP. With the ongoing updates to search engine algorithms, consumers have increasingly more power over brands’ SERP, making one thing abundantly clear for marketers—harnessing the power of customers advocates to create stories about brands, products, and services is not a nice-to-have, it’s an increasingly critical element of brands’ marketing strategies.

I just ferreted out a community marketing plan I wrote for back in 2011 where I tried to sketch out a strategy to use community-driven SEO to drive revenue and fund incentives to attract more members. Have a read of how I tried to implement that strategy, or simply drop me a line if you want to know more in detail of how I can help your community:

How members attract members via SEO!

How members attract members via SEO!

Thanks to a re-tweet from Blaise Grimes-Viort I recall an aspect of this SEO community optimisation I suggested to the software guys at the time, which was to allow the community administrator to ‘tag’ reviews and guides with SEO friendly keywords. That way we could legitmately add value by making useful content more visible to customers via search engines. And we could use free tools like Google Adwords Keyword Tool and discussion with our head of SEO in light of business priorities, where to focus our efforts, not to mention where there are opportunities not spotted by competitors which make it easier to rank more highly for keywords. Hey, I even sat in a workshop with Google where they flagged up such opportunities for under-used keywords to attract people.

I don’t mean editing people’s text content to make it more SEO-friendly, which is hardly going to make community members more amenable to making contributions! Rather tweaking your software platform to allow for ‘tags’ to be added, much as WordPress does for this post. You could even auto-generate a set of suggested relevant tags for the community member to choose from, the way you approach it is up to you. But it does take some research, and it’s worth working with your head of SEO, or SEO consultant to get the right. For example in using WordPress tags for SEO I would heed this advice from wpbegineer:

Often people mistake tags to be like meta keywords for your blogs. This is the main reason why they try to add as many tags as possible. Tags are NOT meta keywords for your blog. At least not by default. Popular plugins like WordPress SEO by Yoast allows you to use your tag values to be in the meta keywords template. But if you don’t have these plugins configured to do that, then your tags DO NOT work like meta keywords.


How to make money out of your online community (and keep them happy)?


In answer to a question on the community manager’s Yahoo group e-mint I came up with a quick suggestion:

One non-intrusive way might be to allow relevant companies like Sony access to your community for a set fee to ask questions for a set time, for example.

I know this can work as I have done community management training for a company in London which sets up communities on that very basis, for market research purposes.

I also know in the movie industry of a site like which gives fans the chance to follow news about specific movies before they premier, and in return builds a fan base for those movies;-) UK featured members

But don’t just take my word for it, check out Sue’s response to this question raised by Patrick O’Keefe:

Forgot to add: A Vendor section in the forum can work well too. In order to keep the vendors contained though it should be stated at the beginning of the agreement that their own Vendor section will be the only place that they would be allowed to personally interact with the membership. I think a Vendors section can be quite helpful in many ways, including:

  • Community members will have a direct avenue to the advertiser to ask questions about the vendors products and services.
  • Allows the “vendor” to be in charge of moderating their own section giving them complete control over the type of postings/topics made in their section (within community guidelines).
  • The vendor’s products/services are easily found within the community, but they do not infringe on discussions that are taking place elsewhere on the site.

I think the interesting concept that offers though is for an enterprising agency to offer a service to companies to find relevant fans/influencers on niche communities. And to work with community managers to help generate income for them that helps sustain their growth. Kind of how Lithium currently sells the value of its community platform to potential customers, by making it the ‘hub’ for social commerce activity:

“Lithium helps you bring your static website alive with social conversations. Deploy Lithium Reviews and Q&A on your product pages to increase conversion rates and average order value. You can also draw customers into conversations by promoting Lithium Blog posts, Knowledge articles, hot Forum topics throughout your site.”

Which is great, but for a company like Sony it’s a case of ‘belt and braces’ of having both such a branded community, and also for specific campaigns being able to reach out to target communities to promote new products, ask for feedback, etc. And that’s why community managers can potentially both help their revenue and benefit their members.

Will the Winklevoss twins’ new community succeed?


This caught my eye today, in an email from Richard Millington, who runs the community management training business The Pillar Summit in response to the news of investment by the Winklevoss brothers (oh, and Divya Narendra) in a new financial community.

Part of the reason it stood out is simply that I started off my professional life in community management setting up..drum roll..a new community for financial professionals! Well accountants, to be precise. And then worked on the FinReg21 community for a short while.

But enough from me, over to Richard to express his concerns to members of The Pillar Community:

Here is a quick challenge for you all.

Yesterday, the Winklevoss twins invested $1m in SumZero – a community for financial professionals.

I can imagine them debating the math: “Too bad we only made $65m from that Facebook idea, but this community for financial professionals sounds much smarter (and more original!). Financial professionals are rich, so let’s charge $1000+ per year for membership. If we can get just 5000 of the 5m in the USA to join, we’ll be making $5m per year!”

Do you know how many entrepreneurs have approached us with idea to build an exclusive, paid membership, community for financial professionals? 6.

That may not sound high, but these are just the tiny number of people that approached us. It’s a slither of the pie. I’d estimate there are 100 to 200 people in the USA working on this very idea right now.

Here is an open challenge to you all.

Based upon what we’ve covered on the Pillar Summit so far, tell me what’s wrong with SumZero?

Why is it unlikely to succeed? What do you think they are doing wrong?

Now without being on Richard’s course I can’t directly comment. But I get the drift, that the SumZero idea is unlikely to take off in terms of probability. But enough from me, over to Divya to explain the proposition:

Creating value from the overlap between networks and communities


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.

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!

The simplest community manager training plan ever


OK, is this is simplest ever community manager training plan you’ve ever read? Note, this is designed for  a one-off one day workshop, with a couple of people new to community management.

1. Essentials of online community management:

  • Prerequisites of growing a successful community
  • Tactics for supporting member conversations – seeding discussions; rituals & events; content and curation using a mix of user generated media; rewards and recognition; responding to first timers;
  • The importance of top contributors – why & how to nurture them
  • Dealing with conflict – value of a community guide; how to moderate; why and how criticism can be good for your community and the insights created
  • How to develop community over the course of the year – the value of champions; what success looks like

2. Creating a daily/weekly community management plan

3. How to measure and record community insights, both qualitative ‘golden nuggets’ and quantitative.


Is your community designed to get answers to questions?


I have scribbled a few notes from the Stack Overflow community presentation below, so excuse the style of writing; there’s also times for where the points are made on the video if you simply want to jump to them. Hope it’s useful.

Joel Spolsky – Cultural Anthropology of Stack Exchange from HN London on Vimeo.

Stack Overflow/Stack Exchange gets close to 180m pageviews a month; it’s been in business 4 years; I am looking at community from cultural anthropologist viewpoint – we’ve tried to create a society specifically to meet the goal of getting answers to questions

1. Usenet was designed so that there was no central server, to discuss you hit reply, and the post quoted the previous discussion item – which led to a culture of ‘nitpickyness’ – or ‘Fisking’ as bloggers call it.

In fact world’s very first troll was on Usenet, someone who created a strawman in order to generate a heated argument. Were other online forums though that did not have the culture argument of nitpicky argument (05.40).

So a design decision taken by accident, where the reply button quoted everything, that was enough to create the culture of usenet.

2. So these lessons were used to create the culture of Stack Overflow, designing every single aspect of the user design.This lesson well understood by architects in terms of design of a room influences how people use it, sometimes accidentally – eg the famous Spanish steps in Rome. (07:53)

3. And most forum software follows Usenet, response to a response, threaded or linear (08:40). Problem is that is a terrible way to get answers to questions – copying email from the era of the mainframe.

4. First impressions (09:40) – another important factor is to get rid of ppl you don’t want rapidly – puts up a pic from @occupy Wall St’ – allows you to make an immediate judgement as to whether want to join that protest.

5. When started off looked at communities which provided questions and answers – starting with Yahoo Answers (11:00). And realise from looking at it that actually a chat room for teenage girls..and because Yahoo did nothing to repel the wrong ppl they got who they got and they are repelling anyone who could answer a question..Same applies to, same with Askville bought by Amazon that a no ones pays any attention to whatsoever “What is the 21st largest (US) state?”.

6. With Stack Overflow designed to attract expert programmers and repel ppl who are not..(12:58)

7. One of first ways designed for the site to stand apart from traditional forums is to allow ppl to vote on *questions* (16:28)

8. More valuable is being able to vote on answers…why?..prob with online discussion traditionally is that it provokes a response, rather than an answer..but instead voting brings all the good stuff to the top (17:40) you can immediately see what is the peer-reviewed answer..

We're not in Kansas anymore!

9. Other important thing about voting is that flows into reputation..and have a badge or ‘flair’ that reflects reputation (18:00) – get points for giving and answering questions – nice mechanism where is a % accept rate – higher the accept rate makes more attractive to answers his questions as he is more likely to accept your answer as right and thus give you points – [a ‘co-reputational’ system].

Moderators at Stack Overflow

10. The highest level of rank is a moderator, each of whom are elected..[Check out their document A Theory of Moderation for information on  moderation philosophy].

11. Makes the point that ppl in offline world portray a type of person they are through visuals too.

12. So taking from Xbox 360 can get badges (21:44)..

While admits ppl wont admit to being motivated by badges it does work…as it works if just one other person notices it..

And if only a few ppl care about badges out of a large community they establish cultural norms…this reinforces these norms..which then adds up to being able to show that on the career section of Stack Overflow [a smart example of community monetization] – and it’s by invite only which keeps the quality reasonably high

13. (25.18)
In terms of governance to save time, pushed down as much of this to members of the community; as you get points you get powers to do things.

14. meta.stackoverflow – behind the scenes govt of the site; deeper than that are the chat rooms..which is only for moderators with 275 people with access to it..all voluntary based

15. And when we change something we have a blog where we inform the community of changes

16. (27.33)
In terms of laws early on thought community be allowed anything, filter it using tags so could avoid by setting up feed to exclude for eg homework questions..realised this was not the right way to do it, and didn’t implement that way.

17. (27.40)
That leads to the philosophy of Stack Overflow – “We hate fun” – all that discussion stuff that ruins questions and answers. The clown image represents that philosophy.

18. Which is around fact that they want correct answers – despite fact ppl get upset when their answers get are five reasons that can get a question closed..this is the system that makes us get a 82% answer rate on all questions

19. When a question does not meet standards can close it, though still visible for a couple of days; use that like a decapitated head, to make an example of what is not tolerated..

Five reasons for closing questions

20. First = duplicate; question can be closed if its duplicate. We are not a discussion forum. We are here to create a permanent record of answers to questions, like Wikipedia, but on narrower range of topics. so if get duplicate will merge it into one place – so answer just in one place.

21. Note Stack Overflow not designed to serve ppl who ask the question, or those who answer it. It serves the internet at large, people who put question into Google and who find the question already on our site. Reason is that 100 times those ppl as those asking questions.

22. Backed up by fact that can edit question on Stack Overflow and then answer it if it does not make sense to you. And if that not solve the person who asked the question’s problem then tough, they can ask again.

23. Second = off topic; have 81 different sites/verticals, everyone has rules as o which is on topic and which is not. This is how we reinforce positive first impressions..that’s the only way you can bring experts in, and not feel like they are answering homework questions..

24. (34.00) Third = not constructive; a question that likely to encourage debate and opinion, rather than facts. “We hate conversation, we don’t like discussion” we can vote up answers that are correct. Something you write when you are 13, it’s just ‘heat’ – and you can’t learn anything from them.

25. Fourth = not a real question. Essentially someone trying to start a discussion rather than ask a question..or overly broad like ‘teach me how to programme’ – ie when the question is one sentence and the answer is a book..

26. Fifth = too localised..(37.00) – where a question is not going to help anyone, where only help the person asking the question. But we don’t care about these people, the people who ask questions.

Our great city

27. They are rules of our great city..with some much complexity within a 20m community we help define the rules, shape the culture that works in a way that it accomplishes the goal of getting answers to your questions – as programmers we are not doing computations any more – we are creating entire (online) cultures + societies – we are inventing the future – thanks.v.much;-)

Usenet explained

New research challenges assumptions about Twitter news sharing communities


A new study of tweets spreading news from The New York Times finds that the Internet, while creating an open line of communication across continents, may at the same time be strengthening walls that separate users into ideological camps, and more.

Researchers for the study, “An Exploration of Social Identity: The Geography and Politics of News-Sharing Communities in Twitter,” collected 521,733 tweets posted by 223,950 unique users — all of them posting or retweeting at least three links referring to NYT articles over a fifteen day period, September 14 – 29, 2011. The tweeters were clustered by who communicates with whom, and groups were characterized by the topics they posted most, tweeters’ location, and their biography key words.

What the research team found were obvious and not so obvious connection points along with revelations that challenge easy assumptions about Twitter communities.

While liberal and conservative national political subgroups were identified, other dynamics were teased out in the mathematical modeling performed by the research team.

“A person who is cosmopolitan associates with others who are cosmopolitan, and a US liberal or conservative associates with others who are US liberal or conservative, creating separated social groups with those identities,” said Yaneer Bar-Yam, president of New England Complex Systems Institute (NECSI), where the research was done.

The clusters revealed not only local and national but also global (cosmopolitan) associations. The national group has subgroups specifically political (liberal and conservative) and one that is broadly interested in business, arts and sports. Contrary to frequent media portrayals, said Bar-Yam, the findings in turn suggest that online readers of The New York Times can have competing priorities and are not uniformly liberal.

“A significant fraction of the population has become so strongly identified with ideological camps that those identities drive their social associations,” said Bar-Yam. “For those who are concerned about the polarization of society into liberal and conservative camps, the results have both positive and negative connotations. There are specific subgroups that are polarized into opposing camps, but often associations are local, national and cosmopolitan.”

The study found these dominant clusters in this sample:

  • The cosmopolitan Global Political Group – those interested in international topics, who live in various cities around the world, including New York and Washington DC, are focused on human rights and politics, and may themselves be journalists.
  • The New York Scene – A New York City-oriented group interested in a diverse set of topics including world news, US news, business, arts, fashion and sports.
  • National Business – a group with the strongest focus on business, but also interest in world news, sports, fashion and the arts. It is geographically spread across the US.
  • Two clusters that are also US-based but are specifically liberal and conservative in their political orientation.

The study is available free at

The authors note that more than 100 million tweets are posted each day, and that a significant portion includes links to online information.

Bar-Yam, in assessing the study, noted that “Twitter cannot be ignored in how peer-to-peer and mass media are connecting people separated in space and time—and what that means in the behavior of social systems.”

In a scientific context, each user, he said, “can be thought of as a node in a network, and the relationships as links between them.”

The study authors are Amaç Herdağdelen, Wenyun Zuo, Alexander Gard-Murray and Yaneer Bar-Yam. The work was supported in part by the Office of Naval Research.

Disclaimer: This is post is a press release from NECSI, with which I have no paid connection. While I have used tools borrowed from complexity science in the health sector, my primary interest lies in adapting such insights for everyday use.