Wrestling with Midgets...oops, I mean Widgets...

I'm a big believer in the web trending towards disaggregation.

I have this vision of the web as a gigantic supermarket with all of these different items on the shelf. And we, as consumers, get to stroll up and down the aisles picking and choosing what we want our dinner plate to look like.

But, picture life before supermarkets - before America operated as a surplus economy. We ate what we killed or what we were given. Same goes with how we used to consume content...

In the mid-late 90's it was all about the "portal" and the aggregation of as much content as possible. We would go to the portal that had the most content (e.g. Yahoo!) because chances are we'd find something we liked there.

Then we slowly evolved towards the aggregation, indexing and searching of content via sites like Google, Digg, etc.

But now we're at the point where people are savvy and willing enough to take charge of their experience on the web and decide what their "dinner plate" will look like. And if the web is the super market, then the widgets are the groceries.

For those that don't know, a widget is basically a small software utility that resides within another web site...think of it like having a site within a site. Some widgets play music, others allow visitors to communicate with one another, etc.

For entrepreneurs of today, widgets will play an increasingly important role in how we build our respective businesses. The game has changed from, "How do we get the community to come to us?" into, "How can we go to where the communities already are?".

The most popular application of widgets has obviously been on sites like Facebook and MySpace where widget developers have been able to build monstrous followings in very short periods of time - I've seen some Facebook widgets explode from 0 to 5 million registered users in a few short weeks. That's unprecedented in the "destination" web, but when you go to where the audiences already are, you really begin to leverage the physics of the "widgetized web".

So how does this apply to me and TickerHound?

Well, since we have such a belief in the web becoming more decentralized, we want to capitalize on that trend and position ourselves to take advantage of it. So we're building a suite of widgets for TickerHound that other financial publishers, content providers and communities can use to enhance their sites and make their lives easier.

We've already kicked off development on a couple of the widgets but now that we're approaching the more complex stuff, we've been wrestling with some tough questions.

I'll be sharing some of those issues here and on the TickerHound blog in the coming weeks. I hope to get some great feedback from all of you!

A Personal Touch

I'm a big proponent of using Return on Invested Capital (ROIC) as a primary benchmark for business success. And not just at the end of the year when sizing up our P&L statements. ROIC has to be used for every business function in order to know if it was "worth" it or not...period.

That's why we use tools like email newsletters and blogs to communicate with our members at TickerHound. It's a "one to many" device - meaning, we write a message once and it reaches many people (at the same cost). It's what makes software and the web such a highly profitable medium.

But I think that in the search for increasing ROIC, we might lose that personal touch that helps build businesses. There's something to be said for appearing to be a "big company" - customers want to feel like they're part of something bigger than they are, they want a feeling of security, credibility and reliability that comes with being aligned with a large company.

But I can't help but feel like "being big" might not be an advantage sometimes - especially on the web. Striving for increasing ROIC in the short term might hurt a business over the long term. So I've been thinking a lot about the web and how it was supposed to "level the playing field" and put small companies on the same level as big companies...and it's certainly done that.

The other thing it's done is it has made this world a much smaller place to live in. I can chat with my friends in China, California and New York just as easily as the person next to me. I know what they're doing via their "Status" on Facebook. I know if and who they're dating, what bar they went to this weekend and I even get to see the tan they got on their latest vacation.

So with that being said, should web start-ups continue to adopt "big business" images or should we start to look at what makes "small businesses" work?

And I don't just mean "small" in terms of revenue or number of employees...I mean "small" in terms of the community the business serves. So the small businesses I'm thinking of are those that serve local communities - the pizzeria down the block from my house, or the dry cleaner at the corner - those small businesses.

Now, the most successful small business I know of was Tony's Deli - an Italian Deli owned by my friend's parents in my old neighborhood of Whitestone, Queens. Tony's was a typical Italian deli - fresh cold cuts, great hot food prepared by my friend's mother and every single time you'd walk in they'd shout your name from across the counter and ask how you were.

It didn't feel like you were walking into a store - you didn't feel like you were walking into a place of business. It felt like you were walking into a friend's place, grabbing some food and by coincidence leaving a little money on the counter. They knew your name, your family's names, the names of your pets. It was great.

But then one day this MONSTEROUS Italian Deli opened up just 3 doors down! They had more food, more selection, fresher produce, etc....AND, they were charging 50% less than Tony's.

So here you have a situation where a competitor enters the marketplace with a better product at a cheaper price - most "business strategists" would say that Tony's would be done for.

But that's not what happened - no sir.

Without Tony's asking for help or even bad mouthing the competition, the community rallied around the local deli. The lines got longer, people bought more things more often and whenever you would walk in you'd be able to hear at least one customer mention that they'd "never shop at the place down the block, hope they go outta business!". It was amazing - Tony's actually did better when the new competitor hit the markerplace because they had captured the loyalty of the community they served.

The "Tony's Community" became champions of Tony's success - the "bigger" company was considered a common enemy that the community could rally against. And boy oh boy did it work out well for Tony's...within 6 months the competing Deli was out of business and in the last 15 years not a single new Deli has tried to open in that community.

Tony's became the king because the community decided it should be so.

And that's what prompted me to do the first truly "small" business tactic that I've done since we decided to launch TickerHound last year.

I began to personally e-mail "thank you" letters to every TickerHound member...and not the standard, "Welcome to TickerHound" e-mails everybody gets. I e-mailed them thanking them for joining and for their contributions to the site. These aren't copy & paste, mass production e-mails either. These are letters I personally typed and sent, from my personal e-mail address, to our members.

This is obviously going to lower our ROIC in the short term, but over the long haul I have this belief that it'll help TickerHound become the "Tony's Deli" of the financial education market. And even if it doesn't, I know that at the very least I'll have made some friends, built some loyalty and have gotten some invaluable feedback on our product - so no matter what, it's a win-win for me, for TickerHound and for the community.

So here's my message to other entrepreneurs out there - "think small".

Content and Community

Two of Hagel's 3 C's of the web - Content and Community - are the cornerstone of all User Generated Content (UGC) sites. They are their biggest asset and at the same time their biggest liability - well, maybe not a liability but definitely a challenge.

I mean, think about it:

1. A UGC site's (social networks, blogs, etc.) value is solely predicated on the participation of its members.

2. In some instances like community dating or classified listings sites, there are two classes of users. Think of it like Supply & Demand. On a classified listing site you have those posting ads, but you also need a commensurate amount of people viewing those ads. Like on eBay - you need both buyers and sellers otherwise the site is worthless to both groups.

So here are the inherent difficulties with a model like this:

1. What's the value for an early adopter? In the beginning there's limited content on the site and limited community activity.

2. What if demand (eBays buyers) exceeds supply (eBays sellers) - or vice versa - in a dramatic way?

Those are the two challenges that face most User Generated Content sites.

Here's how TickerHound has addressed some of these issues in the early stages of our Beta period:

With respect to adding value to the early adopters, I've partnered up with InvestorWords.com - an investing and finance dictionary - basically, I've converted their word/definition items into question/answer records in my database.

So even if nobody is on the site we have a minimum number of questions and answers that at least cover the "ever green" type content (e.g. What's a stock option?, What's the dow jones?, etc.). That doesn't solve the community issues, but it certainly helps with the content (which could keep people there long enough to develop a community). So far it's proven to be fairly successful.

But the supply and demand issues are rough. Too many questions not getting answered and you have a lot of unhappy first time users...and they won't care how great the service "could" be, they'll just walk away. So I'm trying very hard to cultivate the community slowly:

- No intensive marketing just yet
- Writing a weekly newsletter highlighting certain members and their contributions
- Reaching out to "power members" individually to thank them and ask what else we can do to make their experience on the site better.

It's been working well and I'm going to continue doing many of these things as I go forward.

There are other issues that are beginning to creep up, however. Now I have to start thinking about SPAM issues - how can we effectively keep stock scams off the site as traffic begins to build? How do we quickly get SPAM off the site when it does appear? How do we evangelize our community so they'll also help police the site?

These are questions that I - and every other UGC site owner - has to answer if we hope to be successful. That's primarily why I decided to attend a meet-up on Tuesday that's going to be hosted by Cupid's Lab where some other NY tech entrepreneurs are going to meet and discuss some of the very issues I just raised.

Here's to reaching some conclusions on these issues!

Community Management

I'm not sure if I like this term "Community Manager" or not . Something about "managing" people - and in this case, managing how people interact with your product - just seems counterintuitive to everything that's going on in the social media space.

Granted I'm fairly new to blogging for myself, but I've studied the medium, participated in it and have developed relationships with people who helped shape the blogosphere. You see how I said developed "relationships"...that's what this thing is all about!

If one were to "manage" all of their relationships then wouldn't the authenticity and underlying importance and value of those relationships diminish? They'd become nothing more than numbers on a progress report at the end of every quarter.

Granted, some relationships are purely business and thus have to be consciously managed, but when you're trying to build a sense of community and evangelism around a product then why on earth would you use the title of "Community Manager".

It's like calling yourself the "Mayor", indicating everybody else is beneath you.

Sorry to go on a tirade here but I couldn't get over all of the posts I had read on Jeremiah Owyang's blog. Just to be clear, I have the utmost admiration and respect for Jeremiah, I've been reading his posts for a long while now and I think he's probably one of the most well versed people in this space. Furthermore, he's not the only one who uses that title. Look around, it's almost become "conventional wisdom" to use that as a moniker for the employee who reaches out to the customers. However, the implication of using a title like that is far reaching in the impression it gives to:

- Corporations
- Other bloggers
- And (most importantly) the consumers

After having worked in sales and owned a number of my own companies, I know that the only way to get people involved and to become excited about something is to get them on the same side of the table as you. The only way to do that is to present the opportunity for an equally beneficial relationship - EQUAL!

So what would a more appropriate title be?

I think Jeremiah used this term several times in reference to his various roles at different companies, but he didn't use it as his official title. I propose all "Community Managers" officially change their title to: "Customer Advocate".

That's really what you should be doing if you're reaching out into your community of customers, you should be their advocate -- their voice in and outside of your company. Take their input, give them credit for it and make the changes that they want.

It seems like a facile statement but we all know that this is something most companies just pay lip service to - but the ones who practice what they preach are the ones who will succeed.

Mark my words!