03/22/08

I learned a lot at the recent O’Reilly conference, “Graphing Social Patterns.” (You may have seen my coverage of the event at my other blog, and also on my Twitter page.) But the most interesting thing that was confirmed for me personally at this event was that, for social networking to really become successful from a business standpoint, it must somehow start to enable the one big missing element so far: commerce.  Advertising is not going to cut it as a sole business model, a fact that’s becoming increasingly evident.

With clickthrough rates continuing to decline, ad spending hardly going up in the current economic environment, and the lack of ad relevancy getting talked about more and more (especially on social networks!), suddenly advertising is not seen as the panacea it once was. It would appear that commerce—selling real stuff—must be the next big thing.

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12/26/07

It’s time for new year’s predictions, and I’ve decided I’m just going to offer up one big one. Here it is:

In 2008, people will widely acknowledge and accept the notion of “relationship capital.”

One way that will play out specifically, I predict, is that, this time next year, we’ll be talking about how social networking really got traction at work—in the enterprise, as well as continuing to gain adoption in many small businesses.  I really believe that the tool of social networking will come to be seen as having its own form of currency—relationship capital—which can enable that tool to achieve real benefits, real ROI, in advancing business objectives.

So, yes, friends—“relationship capital” should definitely be on your buzzword watch list in 2008!  And there’s a similar term I like as well: “social capital.” I was at an Ignite event in San Francisco a couple of months ago and heard an impassioned presentation by Tara Hunt that she called “Forget Venture Capital, Raise Social Capital!” I thought it was great—very fitting in its context for Web 2.0 startups, but even more so now, I think, in the broader business world as we move into 2008. The thing I like about Social Capital is this: the more you give it away, the more you get back in return.

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