Above Image: Headcount of social business (circled in orange) slightly decreases before large growth.

Social Business Headcounts Change as Programs Mature
Like the calm before the storm, your social business headcount is likely to decrease 10-20% before it radically expands.  Altimeter found through two independent surveys to enterprise class (Companies with over 1000 employees) survey respondents in different years that they both have a drop off in headcount at year 2-4.  We’ve survey corporations both in 2010, as well as in Q4 2012 to find out how social business programs are structured.  Much of the research was recently published in the report, the Evolution of Social Business.  So why this change?

• After experimentation, unchecked programs get sanitized as a central body takes control.  Many companies I’ve seen inside of have often experimental programs occurring for the first 1-3 years.  Labeled skunkworks, rogue, or sandbox programs, this “wild west” grows out of control, sometimes causing stress or resulting in a social media crises.  Often corporate communications, marketing, blessed by an executive sponsor seeks to wrangle control of these programs, by anointing a working team to build a strategy.  In short, the wild wild west moves from unchecked teams in outposts to a new centralized model.
• A core team consolidates, finds efficiencies in a hub and spoke model.   We often see companies emerge in a hub and spoke model, where a core team is serving the rest of the company in a coordinated fashion.  This leader, the Corporate Social Strategist, leads the charge, often reducing excess headcount deploying social and along with it, rogue efforts.  Interestingly, the data shows this happening in the 2010 early market at year 3-4.  Yet fast forward two years to 2012 and we see the consolidation happen much earlier, in years 2-3, as companies have gotten wiser from their peers.
• Explosive growth occurs as team scales in “dandelion”, multiple hub and spoke model.  After the consolidation occurs in both program strategy and the headcount as illustrated in the above diagram, companies see explosive growth as the company “gets the social religion”.  If the core team has structured their program up for scale, they will have invested in social readiness, as well as have a strategy to avoid massive proliferation.

Social business follows a cycle expansion, contraction, then explosion before maturity. Two data distinct data sets helped to tell this story. Expect to see social business programs hit maturity to consistently spread across the enterprise in a safe manner after 5-6 years with proper care and planning. Watch the patterns in your company, after rapid consolidation and program efficiency occurs, be prepared for radical growth as the rest of the enterprise business groups start to adopt social, including their own social leaders in business lines, departments, geographies and product units.

[Disruptions Summarized: 1) The Internet democratized knowledge, 2) Social Media empowered crowd, 3) Collaborative Economy endows crowd to buy once, share many, 4) the Maker Movement aims at buying from brands no more.

I must honestly confess, I struggle to keep abreast of all the new technologies, and I suspect corporations are experiencing the same.  It's my full time job, I attend these events on weekends, and we've a company dedicated to tracking and helping companies navigate, and I see the disruptions accelerating. Here's what the maker movement means to corporations and brands:

[The maker movement empowers people to build their own products, and share with each other --rather than buying from brands]

Those involved in the maker movement are creating their own goods and products, using recycled materials, or improving on existing products. Some are selling the goods to each other, some trade, and some simply just use for their own personal usage. They use technology, skill, community, and massive fairs to connect and grow. So what are the disruptions to corporations and brands by the maker movement?

Brands are disrupted by the Maker Movement.

• Technology empowers the maker movement.  The movement is already connected on digital communication channels, see Make magazine, social networks and online marketplaces like Etsy that enable individual artisans to sell, trade, or buy unique goods.  Furthermore, the birth of 3D printing is spurring on a new class of goods created beyond jewelry and toys as furniture or home designs emerge
• Several key industries are ripe for disruption.  Energy can be disrupted from biomass converter creates energy from leaves, walnut shells, from a variety of solar solutions. Also, consumer goods, industrial goods, toys, media, consumer electronics, can be impacted from 3D printers, a call out section directly below.  Additionally, even in dense living, food supply chain be impacted as home gardens and solutions become more available.
• The maker movement is accelerating. Having attended a few of these events, I was surprised by the sheer volume of attendees yesterday. As technology becomes mainstay for future generations who are all connected and learning to use technology, our next generation will be more adapt at creating –rather than consuming. In many ways, this is just a swing back to the old village ecosystem where every family had a key skill: smith, baker, cook, and beyond, Yet now, we’re not bound by geographic limitations of knowledge, goods, or materials.

 
 
Opportunities abound: Brands can leverage the movement.

• Mindset change: become an enabler of this movement.  I spent time with RadioShack  (thanks Cosmin) at the show, who showed they were enabling this movement. They were providing free training for soldering education and hands on work, and also hosted a popup store selling components and controllers like Arduino.  In previous years, Google, Yahoo and other tech companies have sponsored booths to enable future creators and engineers.
• Build a marketplace that builds new products around you.  While I’ll cover this more in depth on my upcoming report on the Collaborative Economy, brands can host a marketplace around them, enabling customers to buy and sell and make their future products on hosted communities.   See how Shapeways enables 3d printed jewelery artists to host, sell, and offer products –now, imagine a branded website from your company. 
  
• Offer customized products directly to consumers.  Rather than become disrupted as consumers purchase 3D printers, instead provide or host them.  The future of Target, Walmart, Nordstrom, or Macy’s could be to host a showroom, then print out 3D products in near real time, or for immediate pickup.  Imagine retail stores shifting from show and sell to show and make.

On a related but broader context, Altimeter has found four major business themes from the disruption these movements are causing, read about the highlights here, and a formalized report comes soon. Below are some select 6 second vine videos and images which help to illustrate the experience

Above: Combustion cars being converted to electric

Above: Turn biomass (Leaves, wood, in this case, walnut shells) into electricity to power your home

Above: Close up of the 3D printed wood

Above: Intricate 3D printed plastics

Above: Close up of the 3D printed wood

Above: 3D printed stainless steel and bronze jewelry

Above Video: 3D printed Concrete, Salt, Composite and more

Above: Rather than buy toys, print them

Above: 3D Printed Wood.

Above: The massive 3D printer pavilion

Above Photo:  Google showcases interconnected screens at Google IO conference in SF.

By Chris Silva (cross posted) and Jeremiah Owyang, Industry Analysts at Altimeter Group

Last year’s over hyped skydiving was replaced by down to earth by grounded product enhancements.

We’re live from the Google IO conference in SF with 6,000 developers, press, and media in San Francisco’s Moscone event center. We noticed a lot of Glass Explorer units (which surprisingly was barely mentioned in the keynote) we’ve purchased two to test, and will write up a detailed post on them after we’ve done a thorough test.

Today’s Google’s announcements were a wreck; a series of products flipping in front of you, rather than a well laid out showroom. To make sense of this patchwork set of announcements from a fragmented company, we’ve identified some top level trends:

Products enhanced and interconnected –no major new products announced.

• Google can coordinate across all of your screens, making multi-screen easier showing its ability to tie together all of your experiences across the Google-system.
• Ironically, Google did not mention Google Glass. We believe this is because it was overhyped last year, failed to meet production deadlines this year.
• Google+ had several enhancements including a new 3 column layout akin to flipboard, deeper content with flippable content cards, Hangout now extended to multiple browsers, Google+ profiles have improved sign on capability–but no adoption numbers were touted in this flailing social network.

Google is virtually replicating planet earth, but “improving” the quality.

• Google maps is becoming a *Virtual World*. 3D experience with our uploaded photos. With virtual goggles like Occulus Rift you can walk through this virtual world, experiencing our world in just a few mouse clicks.
• The company announced the ability to use more granular location to allow better targeting of mobile users with apps and offers, finally bringing the inherently local capabilities to mobile that we’ve been awaiting.
• Retailers and hospitality should take note, Google maps now integrates photos of your stores from the inside. Internal decor matters to the search process.

Google knows what and who you love as we trade convenience for our data.

• Google announced that they could identify highlights of top photos in your albums, they were able to identify important photos based on facial recognition of your family, grouping these as important. Google knows who your family is –and what’s important to your heart.
• Google is becoming more like a media company, music streaming (Google All Access,) photo editing, magazine-ing of the G+ stream. “Google makes the world better with data.” Google+ becomes like a magazine,
• Speech recognition across the desktop and mobile and bringing personal context to all of their services, doing things like making everyone’s view into maps personal, with their important landmarks highlighted.

The big takeaway is Google is trying to let consumers experience as much of your brand before they buy it, for examples a search user can experience the inside of your store, the reviews, the photos and find the fastest way there –before ever leaving their chair. As such, Google or their advertisers, may influence the purchase decision.

In mobile, It’s about the services, not the devices: While leading with mobile products last year to get people into their sandbox. In social the story focused on rich media differentiating the Google+ network and it became clear that social-first products like Hangouts and Google+ sign=in will make a broader play across more Google and non-Google products. , across data and search – whether maps or analytics – Google wants to up the ante in the tools it offers developers and, in turn, the companies and brands they empower.

• For consumers, if you’ve bought into the Google ecosystem, expect the tools and products to get better but know you’re the product
• For brands: If you want to play in Google’s sandbox, you’ll ultimately need to pay.
• For Google Competitors: As Google has entered media, any industry is up for grabs; they may be your competitor and just not have announced it yet.

Is Facebook paid, owned or earned? The answer is yes.

Facebook is all. They integrate advertising units along with content created by brands on their Facebook pages, and allow for consumers to share their opinions right in the comments. Sometimes, ads look like social content, and it’s hard to distinguish the difference. At Altimeter, we see this convergence only increasing, and these Venn diagrams will continue to have overlapping circles of paid, owned, and earned.

To meet this converging media types, Altimeter kicked off a research project with Rebecca Lieb (a fantastic speaker in her own right), Jessica Groopman (expert researcher), and yours truly.

We found that companies must now integrate their marketing process, strategy, and tactics so each channel leverages each other. In fact, we’ve identified a few workflows that help marketers, and their agency partners do just that. If you’ve read the report, some of this is a rehash, but I wanted to share the story in the above embedded video of how I like to articulate it while on stage.

So here’s all three components in one location: The report that started it all, videos from a keynote speech to 2,500 marketers at Marketo Summit in SF last month, and all the slides. Wishing you all best in your efforts to converge media.

And yes, turn those phones on when I speak, not off.

Brands Focused on Managing Social Proliferation
For those that like to be where they money be, this data is for you. Altimeter’s research continues to survey buyers of disruptive technologies, and continues our coverage on social technologies. In our recent Q4 survey to enterprise buyers, focused on marketing business decision makers, which are global national corporations with over 1000 employees, we posed a series of questions in our survey battery. In particular, we wanted to find out where decision makers are bullish on investing and found the following trends on marketers with intent to increase spending:

• To manage proliferation in enterprise, marketers purchase social media management systems.  Altimeter has been covering this software category since March 2010 (see all posts), and has published reports on how companies are managing social using software.  These social media management system tools, which allow brands to manage marketing, support, and employee interaction of social continue to spread throughout the enterprise (data). We’ve also seen deal size for this specific market on the increase over the past few years, some deals crossing over the six figure dollar range.  We’ve also found that companies are straddled with a number of social accounts (on average, 178 social media accounts) as social strategists struggle to avoid being constantly reactive in a role of social sanitation.
• Insufficient tools means investments in education programs key for employee masses.  A solution requires a strategy, education, business processes, then with software to facilitate.  While most marketers realize that technology is a key method to achieving their goals, they know that education within an enterprise is required for social business success.  Marketers invest in educating various business units (departments, regions, and product groups) to ensure they properly know how to use these technologies and avoid risk.  Yet, in our previous research, we’ve seen that brands are eager to educate, they don’t put large dollars against this investment.   To help corporations solve this need, we’ve launched our own Academy offering, and are working with large brands, agencies, and consulting firms to roll-out.
• Surprise! Marketers “volun-told” as system integrators of fragmented software.  The opposite of volunteering is being volun-told (credit: Zena Weist).  Marketers have been VolunTold that they are unwilling system integrators in the era of VC funded startups who’ve created clones serving similar use cases.  As a result, brand side marketers and their agency and consulting partners are investing in integration disparate software together to commonly share data, in order to manage a single customer journey, or obtain data on one persona or customer type.  While Oracle, Adobe, Salesforce, IBM, and others offer suites, don’t expect this trend to go away anytime soon, as the proliferation of new web tools means that brands will forever be rushing to catch up.

Summary: Companies seeking to scale social in their enterprise.
So there you have it, today’s buyers are investing their resources and time on scaling social within their organization before it spirals out of control. They’re deploying software, coupled with internal training, and then trying to glue together many pieces into one system. While I’m not going to provide insights to each one of bullets, here are a number of other trends from this data that we can discuss in the comments.

Image credit used with creative commons, by MyEye.

Your customers are trading products and goods –rather than buying them from you! Want to know why? We’re conducting research in a pragmatic method to find out why, and then answer what companies should do to respond. Below is a preview of the upcoming report.

[Business Disruption: Consumers don't need to continually buy from companies, as they are sharing, renting, lending, goods & services among themselves]

I’m knee deep in interviews for the upcoming report on this topic, the Collaborative Economy, which will answer how corporations can be part of this sharing movement –and not be left behind.  In my previous post, we’ve made the case this is the next phase of Social Business, and have probed 200 startups from the sharing movement, and have compiled a list of brands that are already participating like Barclay’s, Toyota, BMW, and Walmart.

1) Social Drivers

2) Economic Drivers

3) Technology Drivers

What it means: This is a long term movement –not a passing fad
So there you have it, I see three categories and at least thirteen distinct drivers for the Collaborative Economy. Like social was to us in 2007, this is a broader movement that impacts many aspects of society and therefore business. If these market drivers are long term (often social and economic ones are) then it means this movement is likely to persist and only increase in velocity. If you thought social business was disruptive, this next trend will impact us at a much deeper level.

Related Resource:
I’m not an expert on this topic, so instead, I’m interview them.  We’ve interviewed these sources for the upcoming report (full sources to be cited in report), I highly recommend following them to learn more about the impacts of this movement.

• Shareable Magazine: This forerunner has been tracking this movement for years. See founder Neal’s lifestyle.
• Lisa Gansky: Author and has a large database themed the Mesh, early pioneer
• Collaborative Consumption: Famed author, TED speaker, this group is leading the charge.
• Sharing Economy Slideshare from Loic Lemeur, who’s leading the LeWeb conference with the theme on Sharing.

• The Economist: The rise of the sharing economy
• The Economist: All eyes on the sharing economy

Image Source: David Yu, creative commons license.

Altimeter Data Above: Social spreads further to the edges in Hub and Spoke, and Distributes to Multiple Hub and Spoke, aka “Dandelion”

Social Business Evolution Spreads In Corporations
Altimeter’s most recent social business buyers survey of global national corporations with over 1000 employees has yielded interesting results. One data set that we’ve carefully watched over the years, and perhaps I’m most known for, is how companies organize their internal structure for social business. Over a year ago, we conducted this same study, to glean where the market is; we’re back with additional benchmarking data, and you can read the full report of Social Business Evolution (embedded below) This most recent data resonates the trends that we’re hearing and seeing in many of our brand side clients, here’s my take:

• Decentralized gains no growth. Companies in this model are afflicted with unchecked proliferation and will have to eventually undergo considerable investments to clean up mis-managed or worse, un-managed efforts.  This unscalable model leaves companies fragmented in an uncoordinated method.   We predict this structure will eventually dissipate as companies must formalize their programs.
• Centralized remains stagnant, holds at under one third.  This model, in which a single business unit (often corp comms) manages the program on behest the corporation is a short term fix.  While many regulated companies can easily make the business case for a single group, it cannot scale –and this group will eventually become overwhelmed with requests from business units.
• Hub and Spoke loses 6 points, yet still dominant.  This popular model, in the previous year, sinks 6 points.  Why this drop?  Companies are seeing that social is spreading beyond a coordinated team (often referred to as a center of excellence) to a broad set of business units including regional, departmental, and product lines.   Despite the dip, this continues to be the dominant model most corporations are in now.
• Dandelion model shows growth.  In this model, decision making and management for social spreads to various business units –beyond the centralized team.  This sign of maturity often means there’s coordination in the center, but freedom for local groups to manage within guidelines.  We expect this model to continue to rise year over year.
• Holistic remains elusive. This very challenging formation, where a majority of all employees use social for business in a safe and consistent manner continues to remain miniscule. Why?  This requires a cultural mindset of trust from leaders, and a workforce that is trained and ready to accept social into every fabric of employee and customer relationships.  Don’t expect this model to grow anytime soon.

While I’ve your attention, I wanted to share that I’ll be hosting a webinar on Social Business Readiness, and share how we’ve helped many companies get ready internally, such as this project on Social Readiness roadmaps, (here’s a screenshot), I’d love to help your corporation get situated in a scalable model for social business. On a related note, Altimeter Group continues to hire, we’re seeking a COO and Senior Consultant as we continue to grow.

What’s the next phase of Social Business?  That’s the question I’m frequently asked.  Without a doubt, the next phase is the Collaborative Economy.

What’s that?  That’s where brands will rent, lend, provide subscriptions to products and services to customers, or even further, allow customers to lend, trade, or gift branded products or services to each other.  This unstoppable trend is fueled by the social web, the specific features include relationships, online profiles, reputations, expressed needs and offerings and ecommerce. Customers are already starting to conduct these behaviors among themselves using TaskRabbit, AirBnb, Lyft, and many others tools –some of these are disruptions and opportunities to brands.

While this movement will have broader global and economic impacts, at Altimeter, we’re focused on disruptions to corporations.  We’re knee deep in interviews for our next report on the Collaborative Economy, and have interviewed startups, VCs, brands, social business software vendors, authors, thought leaders, and are dissecting data of 200 sharing startups, for a broad overview of what it means to business.

Caveat: There are many broader impacts inside of the company that also impact HR, recruiting, supply chain, IT, and more, the above is just a sample of the most well discussed impacts.

Ecosystem Opportunities Aplenty
What are the immediate business opportunities?  There’s a long list, and the report will probe them in detail, but they’ll include sponsorships, partnership, investments in startups, building branded communities that enable renting and gifting, customer advocacy programs, and more. I’m seeking a SaaS startup that will enable this for brands, and dedicated a whole post outlining the market opportunity. For example, on just the retail vertical, yesterday, I met with Neal of Sharable Magazine, and he shared opportunities for retailers

Mindset Change Required in Corporations
So there you have it, the next phase of Social Business goes beyond marketing and customer support, it changes the fundamental business models and relationships that we will have with our customers. The big change that brands will struggle with, as is it means that brands will have to care about the relationship between customers as they trade and rent your products between themselves.

Stay tuned for Altimeter’s report on the Collaborative Economy in just a few weeks, which I’ll be presenting the findings at LeWeb, which is themed on the Sharing Economy. Thank you Vivian Wang and Neal Gorenflo for the inspiring interviews this last few days.