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Web 2.0 Investment Strategy

Outperform Rivals by Using Adoption Curve


University of Chicago Booth, 19 October 2009




...
Agenda
Copyrighted
 material



              • One: Web 2.0 and the Enterprise
                 – The opportunity and the...
My Perspective
 Copyrighted
  material



               • 20 years experience as management
                 consultant a...
What I’ve Learned about Technology Disruptions
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  material




                                               ...
Social Networks & Web 2.0: Why the Disruption?
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  material




               • Many-to-many
               • ...
The Relationship Life Cycle: Plummeting
 Copyrighted   Transaction Costs across the Board
  material



               1. ...
Social Networking Meets the Enterprise
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  material



               Enterprise                               ...
BIG Idea
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  material




                                Web 2.0 will transform
     1                        ...
The Web 2.0 Adoption Curve, 2009-2015
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                           You are here




    2
Web 2.0
Adop...
Discover, Hype & Experimentation, 2006-2009
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                                                 “Ir...
Failure and Disappointment, 2010
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                                                 “Ignorant crit...
Triumph and Pervasive Adoption, 2011-15
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                                                        ...
BIG Idea
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                               The adoption pattern is very
    2
Web 2.0
             ...
Risk Mitigation Enables More Aggressive Adoption
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  material



               Obvious Web 2.0 Risks          ...
Using the Adoption Curve to Outperform Rivals
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  material




     3
  Web 2.0
Investment
  Strategy




     ...
Risk Mitigation Approach
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  material



               The Stages                                             ...
Avoiding Common Pitfalls
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  material



               • Leading with technology
                   – Technolo...
Investment Process
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  material



               1. Begin with due diligence
                   – Be explicit:...
Example Pilots
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  material



               •   Blog outreach program
                                       ...
Example: Social Network Roadmap Pilot
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  material




                 Phase 1: Web 2.0                       ...
BIG Idea
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                               Web 2.0 is 21st century
    2                          d...
Resources to Help
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  material



               • The Social Network Roadmap
                  –   Helps compa...
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Web 2.0 Investment Strategy

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Presents a Web 2.0 investment strategy for business and government that aims to help you outperform the market by investing at a lower cost. 3 sections: a) Web 2.0 and the enterprise overview, why it's much harder than most people think, b) the Web 2.0 Adoption Curve model, how the Web 2.0/social networking will have a correction in 2010, and how this can be an opportunity for you, c) how you can adopt Web 2.0 at a lower cost than your competitors and create competitive advantage

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Transcript of "Web 2.0 Investment Strategy"

  1. 1. Web 2.0 Investment Strategy Outperform Rivals by Using Adoption Curve University of Chicago Booth, 19 October 2009 Entire contents © 2008-09 by Christopher S. Rollyson
  2. 2. Agenda Copyrighted material • One: Web 2.0 and the Enterprise – The opportunity and the challenge • Two: The Web 2.0 Adoption Curve – How most of the market will adopt, at a high cost • Three: A Web 2.0 Investment Strategy – How you can adopt, at a lower cost by using the Web 2.0 Adoption Curve 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 2
  3. 3. My Perspective Copyrighted material • 20 years experience as management consultant and line executive • Expertise: disruptive innovation, strategy and transformation 1 • Strategy and execution for game-changers: Web 2.0 Java, e-business, SOA, Web 2.0, social networks and the Enterprise • Thought leader: 3 blogs in global top 10 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 3
  4. 4. What I’ve Learned about Technology Disruptions Copyrighted material 1 1. In the beginning: small and fringe-y – “Oh, - - - , my kids do that” – “That’s for overcaffeinated people with too much time on their hands” 1 Web 2.0 2. Isolated upsets and denials – “- - -, no real company is going to (do business on the Internet)” 2 3 and the Enterprise 3. Tentative consideration – “We may need a website--but only for some departments” 4. Full acceptance – “We need websites for most of our businesses” – “Why don’t we build private websites for customers and partners?” 4 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 4
  5. 5. Social Networks & Web 2.0: Why the Disruption? Copyrighted material • Many-to-many • Rich asynchronous 1 • Social ecosystem • Expertise economy Web 2.0 Blog Web 2.0 and the Enterprise • Real-time, global • Inexpensive Wiki • Specific • Digital, Fast 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 5
  6. 6. The Relationship Life Cycle: Plummeting Copyrighted Transaction Costs across the Board material 1. Discovery – Finding people with highly specific interests & needs – Digital breadcrumbs everywhere when you know where to look 2. Invitation 1 – Initiating a relationship asynchronously – Practice authenticity and transparency Web 2.0 and the 3. Building Enterprise – Developing relationships with interactions – Focus on building trust 4. Management – Keeping up my relationship via meaningful interactions – Online to prequalify – Offline to build highest value 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 6
  7. 7. Social Networking Meets the Enterprise Copyrighted material Enterprise Social Networking • Process-oriented • People-oriented 1 • • • Organization Involuntary Channels, slow ! • • • Collaborative Voluntary Transparent, fast Web 2.0 and the • The multiplicities of push • Infinite pull, with strings Enterprise • Structured, siloed • Cross-boundary, emergent ? 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 7
  8. 8. BIG Idea Copyrighted material Web 2.0 will transform 1 business because it Web 2.0 and the Enterprise changes the economics of relationships... but it’s work to adapt to the enterprise 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 8
  9. 9. The Web 2.0 Adoption Curve, 2009-2015 Copyrighted material You are here 2 Web 2.0 Adoption Curve How most of the market will evolve through 2015 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 9
  10. 10. Discover, Hype & Experimentation, 2006-2009 Copyrighted material “Irrational exuberance” • Shiny new toy: “cool” • Provider-driven marketing 2 • Superficial stories Web 2.0 Adoption • Not much responsibility Curve • No down side • Meaningless “metrics” • Widespread talk of investment 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 10
  11. 11. Failure and Disappointment, 2010 Copyrighted material “Ignorant criticism” • Demotion from silver bullet status • Mainstream media backlash 2 • Disillusionment with “ROI” Web 2.0 Adoption • No solid up side Curve • “Harder than we thought” • Widespread de-investment 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 11
  12. 12. Triumph and Pervasive Adoption, 2011-15 Copyrighted material “Maturing investment” • Relationship-oriented • Money follows trust 2 • Specific programs Web 2.0 Adoption • Digital social networks enable Curve more communication • Widespread ROI models • Increased competition for attention 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 12
  13. 13. BIG Idea Copyrighted material The adoption pattern is very 2 Web 2.0 predictable… just reflect on Adoption Curve other disruptions you have seen 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 13
  14. 14. Risk Mitigation Enables More Aggressive Adoption Copyrighted material Obvious Web 2.0 Risks Overlooked Web 2.0 Risks • Negative word of mouth • Opportunity cost • Embarrassment by not • Loss of competitiveness 3 being “with it” due to inferior collaboration Web 2.0 Investment • Loss of brand value due to • Investment Strategy competitor success mismanagement & under- investment 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 14
  15. 15. Using the Adoption Curve to Outperform Rivals Copyrighted material 3 Web 2.0 Investment Strategy The power of risk mitigation 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 15
  16. 16. Risk Mitigation Approach Copyrighted material The Stages Techniques • Assess • Rapid cycles – Match goals with organization – Short feedback loops enable and stakeholder realities fast correction, less waste 3 • Pilot • Transparency and inclusion – Try social networking initiatives – Involve legal, PR, revenue Web 2.0 in small chunks to manage risk owners and accounting early Investment Strategy – Learn & iterate in short cycles • Focus on external and internal • Scale stakeholders – Expand elements of effective – External focus on workstreams pilots, expand scope and scale within the ecosystem • Integrate – Explicit focus on change – When you stabilize social • Budgeting networking processes, – Structure pilots to minimize integrate them with legacy need for normal ROI process 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 16
  17. 17. Avoiding Common Pitfalls Copyrighted material • Leading with technology – Technology imposes process on people and they don’t adopt • Having fuzzy, non-actionable goals 3 – Results harder to track, and your initiative loses support • Focus on what your firm needs rather than stakeholders Web 2.0 Investment – SHs will not be stimulated and will not engage Strategy • Chunking innovation too large – Spend too long on ROI discussions • Depending too much on experts and vendors – Web 2.0 is core; it needs to become your O/S • Falling into the efficiency tech trap, not using portfolio – Letting a monolithic tech solution be everything to everyone 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 17
  18. 18. Investment Process Copyrighted material 1. Begin with due diligence – Be explicit: what stakeholders do you want to engage? – Understand the ecosystem: where do they interact most? – Motivations: what is important to them? 3 2. Assess your capabilities – What meaningful expertise can you contribute consistently? Web 2.0 Investment – Identify organizational risks and barriers Strategy 3. Start with small-but-important pilots, and measure constantly – Small to manage cost risk and minimize ROI discussion – Measure/adjust to catch mistakes quickly – Build to last, and propagate skills White Label Blogging 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 18
  19. 19. Example Pilots Copyrighted material • Blog outreach program Blogging • LinkedIn Group • Microblogging 3 Web 2.0 • Facebook Group or Page Investment Strategy • Cause-focused community White Label • YouTube campaign • MySpace Site or Group 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 19
  20. 20. Example: Social Network Roadmap Pilot Copyrighted material Phase 1: Web 2.0 Phase 2: Web 2.0 Phase 3: Web 2.0 Ecosystem Audit Readiness Implementation 3 • Assess Web 2.0 • Define stakeholder • Design pilots to environment activity/workstreams mitigate risk Web 2.0 Investment • Identify stakeholder • Understand firm USP • Fast cycles with Strategy characteristics and how transfers to rapid feedback – Internal Web 2.0 venues • Small investments – External • Assess resources to • Portfolio approach • Web 2.0 analysis engage stakeholders • Knowledge transfer focus • Influencer analysis • Measure gaps Requirements for Pilots End End State State Ecosystem vision Stakeholder vision Pilot design 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 20
  21. 21. BIG Idea Copyrighted material Web 2.0 is 21st century 2 dialtone: adoption is a Web 2.0 Adoption Curve strategic necessity… getting this right will determine winners 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 21
  22. 22. Resources to Help Copyrighted material • The Social Network Roadmap – Helps companies use Web 2.0 for innovation – http://socialnetworkroadmap.com – Currently rated #1 worldwide by Technorati • The Global Human Capital Journal – CEO/CMO/CIO journal for innovation Microblogs 3 – Currently rated #10 worldwide by Technorati http://twitter.com/eglii – http://globalhumancapital.org http://twitter.com/egtw Web 2.0 Investment • The Executive’s Guide to Web 2.0 http://twitter.com/egfb http://twitter.com/csrollyson Strategy – EGLI blog currently rated #4 worldwide by Technorati http://twitter.com/snroadmap – EGTW management advice for Twitter, blogging http://plurk.com/user/csrollyson – EGFB management advice for Facebook http://identi.ca/csrollyson – http://executivesguide-web20.com http://kwippy.com/csrollyson http://csrollyson/tumblr.com/ • Social networks http://friendfeed.com/csrollyson – http://www.linkedin.com/in/csrollyson – http://www.facebook.com/csrollyson Other – http://myspace.com/csrollyson skype/IM - csrollyson – http://tinyurl.com/orkut-csrollyson iphone - chris@rollyson.net – http://tinyurl.com/xing-csrollyson iphone +1.312.925.1549 10/26/09 Web 2.0 Investment Strategy | University of Chicago Booth | 19 October 2009 22

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