Crossing the Social Networking Chasm

Scott Allen

Simon Rogers has uncovered over 1 million British pounds in potential revenues for his company 2Delta, a reseller specializing in project management software, as a result of his participation in Ecademy, an online networking site. After just four months in business, he has been brought forth to more than 16 opportunities, each worth 75,000 pounds or additional. He's already closed four deals, including one "nicely into six figures." For him, Ecademy is a significant business accelerator.

"It is early days," Rogers says, "in any case this is startup No. 5 for me, and I know I am miles ahead of where I was with any of the others, and I built each of those businesses into $5 million annual revenue before selling them. I have high hopes."

When asked whether a social network like Ecademy works for people wanting to build a business, he answers, "Absolutely, but it needs to be 'worked' with a process and a view to sharing the rewards. I blueprint to make money for the people who help me. The word will get around that Rogers is a feasible man, that his proposition is a adept one, that 2Delta delivers the highest quality service and has delighted clients, who give us all repeat business."

The tech media, perhaps burned by its spoiled love affair with the dotcoms, is now ready to dump on the internet social networks after only a brief fling. Until late 2003, the coverage consisted of, essentially, "Why are all these VCs investing all this money? Where's the business model?" For a year, there was romance. Although now, one pundits are saying that the wave has passed, that the bubble has already burst.

Meanwhile, LinkedIn has topped 1 million users. A host of additional socially oriented sites crossed the million-member point a while ago, including Meetup, Friendster, and Tickle. The band REM recently announced that they will be previewing their new album on MySpace. OpenBC has gone truly global, supporting German, English, Spanish, French, Portuguese, Russian, and Chinese on their site. Enterprise-oriented tools from Association Network Corporation and Leverage Software have already garnered multiple paying customers. And tens of thousands of people are developing business relationships in ways they never did before.

And yet most Internet users still haven't even heard of them.

To put this in perspective, Classmates boasts over 38 million members; Reunion.com, 22 million; and craigslist gets 6 million unique visitors a month. Clearly, there's a lot of room for the new crop of social networking sites to grow, as well as a demonstrated precedent that people are willing to pay to connect with each other for a variety of purposes.

The potential marketplace for business networking is enormous. Over 20 million businesses worldwide are members of local chambers of commerce. Add to that all the marketing, business development, and non-retail sales professionals, plus hiring managers, recruiters, and job seekers, and the lot gets very large. Generating revenue and supporting other business processes via relationships are as compelling reasons to connect as finding old schoolmates or potential dating partners. free psychic chat This technology is still in the early adopter stage and has a ways to go before being truly mainstream.

The ultimate question that's going to determine mainstream adoption is simply, "Do they work?" At the moment, the answer is twofold. Yes and no.

Business networking sites are not living up to the expectations of a great deal people. They don't effectively represent electronically the complexities of interpersonal relationships. They create awkward social situations that don't exist face to face -- such as how to deal with an explicit request to be someone's friend, something many of us haven't had to deal with since third grade. And they don't prevent spam.

Although the accepted fact that they're not yet living up to their potential shouldn't blind us from the real immediate benefits to be gained. Let's look at some of the unique benefits on the internet networking sites offer that traditional face-to-face relationship building does not:

Searchable directory
Where else can you easily search for people by industry, geography, title, and personal interests? It's the yellow pages on steroids. You can be greatly focused in a way that's impossible in person.

Considerable visibility at low cost
Most of the sites let you create a profile for free. Sure, there's a limit to how a great deal you can actively participate in, however you can participate passively in dozens of sites. The trick is to keep a document with a master copy of all your profile information so you can easily copy and paste it and set up your profiles quickly. As UCLA Professor Phil Agre says, "The many fundamental way of finding-out people on the internet is to help them find you."

Receptive audience
Whereas no one likes to be approached inappropriately, you'll find people in networking sites additional receptive to an informational phone call or email exchange. On LinkedIn, for example, you can specify whether or not you're willing to accept contacts pertinent to deal proposals, and you can limit your searches only to people that are. In the discussion boards, blatant advertising may not be allowed, although you won't be accused of making a sales pitch just for sharing your expertise.

Easy group-forming
Growing a discussion list or forum on your own site is no easy task. In the social networking sites, there's a built-in audience looking for groups to join. Groups have a visibility within the larger environment that simply doesn't exist with an independent community, or even on a broad open site like Yahoo Groups. People really will begin signing up almost at once after you create your group, if you offer value to them.

Get visibility into the networks of your connections
The ability to see your connections' connections, and to determine who you know that can make an introduction to the person you're targeting, is very powerful and has no direct parallel in face-to-face dealings. In accepted fact, it's so formidable that entire products are created just around this ability. Crawl My Site As Concord Network founder/CEO Geoffrey Hyatt says about his company's product, "It's a one-trick pony, in any case it's a very valuable trick." Jeannine Solanto, CEO of Foundation Systems, reports that her company has cut their sales cycle by 15-20%, on customary, by using Leverage Software to gain access and influence within target accounts.

You can realize these benefits right away with the existing technology, regardless of its imperfections. In many cases, you can just use the free service, in any case even the premium memberships only run a few dollars a month -- chump reform if you're actually generating business. So the real ROI question isn't whether they're worth the money, in any case whether they're worth your time. The answer is "yes" -- not because the sites them are, although because the relationships are.

Online networking sites simply help you manage additional relationships with less effort.

David Teten and Scott Allen are coauthors of The Virtual Handshake: Opening Doors and Closing Deals On the internet, the first business guide to sales, recruiting, and business acceleration with online networks, and joint contributors to TheVirtualHandshake.com resource site. They write a monthly column about online networks for FastCompany.com, where this article originally appeared.

David Teten is CEO of Nitron Advisors, an investment research firm which provides institutional investors and law firms with direct access to frontline industry experts. To participate in paid consulting opportunities, join Nitron's Circle of Experts. Scott Allen is the About.com Entrepreneurs Guide, providing free resources and guidance to help entrepreneurs as they start and grow their business.