Dull thoughts in a sharp world.

In 1997, I can recall my older sisters saying how cumbersome email was.

In 1999, I can recall high school classmates saying that Napster will never replace music CD’s.

In 2005, I remember friends saying how stupid Facebook is.

Today, I have my own friends and peers asking me the value of social media as a distribution, marketing, and communication tool.

I think it’s important to note that we’ve seen disruptive technologies and changing consumer behavior change industries. This seems particularly true in the newspaper and television industries as of late. And the inability to adapt to this change has caused large print and television corporations to lose market share.

What should have happened is these well-funded and well-positioned companies should have identified the trend, and set up division to experiment, explore, and develop new technologies in line with consumer demand. In essence, Gannett should have created Blogger, NBC should have created YouTube, and Yellowpages should have created Yelp.

In terms of the Multi-family housing industry, I’m not defending the value of Twitter as a lead generating service for the apartment industry. It may never provide significant results as a lead generator. And I am not saying that Twitter, FriendFeed, or Facebook is the next platform that will change the way we find apartments. But I think it is a mistake to make all decisions based on measurable results.

Here is why:

1) It takes time to build and adapt to new technologies.

There is a learning curve involved. You cannot just get a PageRank of 9 overnight. You cannot build a network of followers for your blog with one post. You cannot build your online content presence by creating a Facebook Fanpage.

2) Social Media is also an engagement, communication, and customer service tool.

Not all results of customer service are immediately measurable. I do not need to defend the value of transparency; we all use UCG and review sites everyday. But I feel like I need to convey this… The way we (consumers) communicate, interact, and consume information is changing and for the most part, has changed. The social web, reviews, and UGC influence our purchasing decisions.

Conclusion

Social media is a rapidly growing consumer trend and many companies are still figuring out how to use it effectively. However, it has changed the way consumers make decisions and it is important that companies understand how to employ it to their advantage.

NAA welcomes several of social media’s best minds to discuss how this marketing trend applies to customer service and retention at a Thought Leaders session at the 2009 NAA Education Conference & Exposition on June 27 in Las Vegas.
By Eric Wu

All the current talk is about social media – how Twitter is taking over e-mail, how Facebook has more users than most countries have citizens, and how engineered virality can replace a marketing budget. With all the chatter, one might think that social media should be a substitute for advertising, a reason to eliminate a company’s marketing staff, and even cure cancer.

All too often, abstract concepts in social media marketing and communication are not concretely defined or measured. The result is the perception of a far-fetched land of geeks getting together and somehow magically altering business operations, marketing strategies and branding.

On June 27, 2009, at the NAA Education Conference & Exposition in Las Vegas, the “Thought Leaders in Social Media” panel aims to provide some experiences and relevant insight into how to use the social web. As a precursor, let’s introduce the panel and take a look at how these individuals have applied social media strategies to increase brand recognition, retention and revenue.

Panelist #1 – Tony Hsieh, CEO of Zappos.com

Tony Hsieh has grown Zappos.com from $1.6 million in 2000 to $840 million in 2007, a measly 525,000 percent increase.

How was Tony able to change a company from a little over $1 million in revenue to almost $1 billion in revenue?

If you ask Tony, he’ll say, “customer support.” For most people, these words act as reminders to answer phone calls and please the customer. And, granted, Zappos does both of those brilliantly. However, Zappos has consistently adopted social media as part of its customer support strategy to engage and listen to customers.

“We actually take a lot of the money that we normally would have spent on paid advertising and put it back into customer experience,” says Tony. “We’ve always stuck with customer service, even when it was not a sexy thing to do.”

Zappos shortens the engagement loop with the entire organization by being very active on Twitter. Tony has more than 350,000 followers, and more than 400 of his employees are using Twitter.

For Tony, growing the business has not just been about answering phone calls, but about building a brand around the principles of engagement, creativity and a laser focus on fulfilling customer needs. These initiatives have resulted in 7.4 million total customers, 75 percent of purchases coming from returning customers and repeat customers ordering more than 2.5 times every 12 months. Talk about retention.

Panelist #2 – Jeremiah Owyang, Sr. Analyst at Forrester Research

Jeremiah Owyang is a senior analyst at Forrest Research and a leading expert on social computing, social media and interactive marketing. Jeremiah’s blog was ranked 19th by Advertising Age, he has consulted for large brands such as Hitachi Data Systems, and he is a speaker and educator at many conferences such as Web 2.0 Expo, SXSW and CES.

In a recent study titled, Social Media Playtime Is Over, Jeremiah writes:

The recession has put more pressure on interactive marketers to deliver measurable results. While many marketing budgets are being cinched, more than 50 percent of interactive marketers say they will increase their spending on social marketing. Why? These inexpensive tools can quickly get marketing messages out through interactive discussion and rapid word of mouth and, properly managed, can deliver measurable results. But in this downturn, interactive marketers must move beyond experimentation by making social applications a permanent part of marketing, measuring and demonstrating their value, and integrating them into marketing efforts.

As a part of the study, Jeremiah found that 53 percent of marketers are determined to increase their social media budgets and 42 percent will keep budgets the same, a total of 95 percent of marketers bullish on social media marketing. Even though these budgets are small (three-quarters are less than $100,000), Jeremiah recommends that marketers do not approach social media marketing as an experiment. “Remember, the most expensive cost isn’t the tools, it is the soft costs–strategy, education, process, roles and measurement,” he says.

Jeremiah continues to provide empirical data and demonstrate why social media outlets can be an integral part of marketing and distribution. His message is spot-on; it is not just about being there, but it is about having a strategy and goals for the engagement.

Panelist #3 – Pete Flint, Founder of Trulia.com

Flint founded Trulia.com in 2005 and it now is one of largest and fastest growing real estate Web sites in the United States. Trulia.com has over 5 million unique visitors a month and has raised more than $33 million in funding.

Trulia has been able to bridge the gap between buyers and real estate professionals by building a community called Trulia Voices. Some stats include:

• Visits to Trulia Voices increased 146 percent year over year
• The volume of question and answer activity in Trulia Voices Q&A increased 114 percent year over year
• Real estate professionals’ answer volume increased 96 percent year over year
• Consumer questions increased 181 percent year over year

How has Trulia engaged both millions of home buyers and hundreds of thousands real estate agents?

Again, the answer seems to be centered on the engagement of the customer. Heather Fernandez, Vice President of Marketing of Trulia, says, “Consumers are looking for guidance and education and are relying on our pool of more than 200,000 real estate professionals for advice and insight.”

With multifamily housing traditionally closely tied to the real estate sector, Trulia is a relevant example of how user-generated content can change the flow of communication to consumers.

Moderator – Eric Wu, Co-Founder of RentWiki.com

I’m a 26-year-old entrepreneur and co-founder of RentWiki.com, a socially-driven rental search that connects renters with peer advice. I’ve spoken at conferences such as NMHC Technology, AIM Conference and the Harvard Business School Entrepreneurship Conference. In 2006, I was named one of BusinessWeek’s Top 25 Entrepreneurs Under 25.

Conclusion
Having a Twitter account, a Facebook fan page and a viral YouTube video will not cure cancer, but they can and will affect your bottom line. The underlying message is not about usage or presence. It is about having a consistent strategy to engage consumers, listen to customers and focus on their needs. As Jeremiah puts it, “Fish where the fish are.”

Eric Wu is Co-Founder of Rentwiki.com. He can be reached at eric@rentwiki.com or 415/640-4970. The “Thought Leaders on Social Media” session will be presented 10 a.m. to 11 a.m. on Saturday, June 27 in the Mandalay Bay’s Lagoon Ballroom as part of the 2009 NAA Education Conference & Exposition.

In recent conversations amongst founders at RentWiki.com, we’re have prioritized our goals and visions.  One of our main goals is to provide maximum value to both renters and property owners and reach product/market fit as quickly as possible.  Product/market fit as defined by Marc Andreesen…

Product/market fit means being in a good market with a product that can satisfy that market.

You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.

And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.

To do so, we have placed a high priority in shortening our feedback loop, listening to clients and customers, pushing quick iterations, and being laser focused on this goal.  We do not get into the featuritis game or the beautiful product game, because none of those have any significant impact on our two key drivers… listings and content.  What are the sacrifices?  Our focus places items such as integration with Open ID, Facebook Connect, Social Apps, I-phone apps, and the like as secondary items to providing value to renters and clients.

Why should these items be secondary?

In order to successful launch and utilize these tools, companies need the time, resources, and strategy to do so.  Every second we spend not focusing on our content and listing, is a second not providing substantial value to the consumer.  I often cite the analogy of vitamins vs aspirin (vitamins supplement health, aspirin solves pain), and being the first with an i-phone app or integrating XYZ widget does not solve dire pain.  And the pain is not content fragmentation or portability of content, but it is the existence of the content online.  As we approach our product/market fit, we can reallocate resources to play the feature game.

Why should these items not be secondary?

In our particular industry, we are in a bit of a branding battle as part of our sales strategy.  It seems that our competition is in a foot race to see who will be crowned the next king of social media.  Though this means nothing to the renter, which subsequently should mean nothing to property owners, it is a reality we have to face.  Value is not enough to shorten a long sales cycle.  Though content is still king, if we developed the magic twitter-flickr-digg-facebook-youtube one click integration, we’d be seen as providing more meat to renters.

That being said, we are getting request from renters to develop an i-phone apps, integrate with Facebook Connect and Open ID, and provide more syndication of fragmented content.  We have those features slated in our development schedule.  Will we be the first?  Probably not, but I’m not convinced that a renter knows or cares who’s first.  Let’s take some classic examples:

Netscape — Internet Explorer

Ofoto — Flickr

AltaVista — Google

Napster — iTunes

Next post I will cover the advantages and disadvantages of being a first-mover vs. a fast follower.  But long story short, we believe focus will drive a better core product, more robust content, and more listings.  And a combination of those three drives our magic one click button… value.

Congrats to Eric at Urbane for being such a stud twitter user.

Continuing the discussion with companies uses of social media, here is an interesting article by Mashable titled, “Do Brands Belong on Twitter?”:

Dr. Mark Drapeau is a biological scientist, government consultant, and regular contributor to Mashable.com and other venues.Behind every Twitter account is a person. But some of these people ‘hide’ behind organizational brands, obscuring their persona and therefore reducing authenticity and transparency.

While some brands do a decent job of engaging people on Twitter, many don’t, and one could further argue that brand names and logos, as opposed to full names and user images, are not in the spirit of the Twitterverse.

People Talk to People

Twitter is about people sharing information with other people. So how do one-dimensional organizational brands fit into this mix? When you really think about it, they don’t. As an analogy, when you call customer service, a human answers the phone (eventually) and tells you their name – and you’re not talking to “Sprint” or “Dell” but rather “Steve” or “Danny.”

So, does anyone really want to talk to @DunkinDonuts? Or would they rather talk to Bill Rosenberg, the founder of Dunkin Donuts of Canton, MA, or perhaps the local franchise owner on Capitol Hill, or a disgruntled but funny summer employee punching in at 4am? People connect with people, and so I think the latter.

Twitter is still deciding how to monetize, and one possible approach would be to charge organizations a fee for using the service as a marketing tool. Most brands are not yet tweeting, but selling a premium service might increase Twitter’s profile and suddenly seem like an attractive strategy. I think this would be a mistake from the viewpoint of people who use Twitter.

Twitter may become little more than an enormous number of feeds, mainly full of nothing of interest to you. And while the system is built to be opt-in, the prospect of wading through 100 or 1000 times more junk when you do searches, companies hiring SEO consultants to put key words in front of your face, and seeing @AnimalCrackers at the top of the TwitterGrader list in my local area are unattractive byproducts of this business model. (Alternatively, brands just might not buy in at all.)

No Brands on Twitter

Thinking about what might be best for people, in my opinion Twitter should not only not charge brands for membership, but also ban them altogether. Not unlike Facebook and other sites, every account would represent a person using a real name, location, and picture.

People could still tout their businesses, hobbies, and anything else in their handle, bio, or feed, but in an environment of authenticity and therefore increased trust. Some people will game the system, to be sure; but they will often get found out through the wisdom of crowds, so what’s the point?

New users would find having only real, authentic people on Twitter more attractive. Let’s face it, not many people use Twitter yet, and a company with a trusted brand like IBM could develop a platform with a better GUI and a few more features that my parents would be far more likely to try out, perhaps initially bankrolled as a public service. Twitter is far from invulnerable.

Personalities Might Help Brands

I think that authentic and transparent personal Twitter accounts – being yourself in an uncontrived way – may indirectly and intimately influence (I3) organizational brands, because of the level of trust involved in sharing information with someone over the course of time. Many people have increased awareness of the government through talking to me and reading my Twitter feed. But I am not a public affairs professional, nor the official brand of the Department of Defense – just an informed, empowered, and hopefully interesting individual.

Having just one personal account would also streamline Twitter’s user base, structuring it in a slight but possibly meaningful way. Why try to gain ambient awareness via TwitterFeed, when each person associated with an organization is a word-of-mouth advertising device?

After working on RentWiki.com for about 9 months now, consumers have been responsive to the generally concept and vision of the project. It is nothing complicated, just compiling advice, reviews, and opinions about moving to a new city. Having moved 4 times in the past 2 years, I know the value of advice when trying to find a suitable rental. On the surface, seems very simple, useful, and a much needed service.

So why isn’t there a flood of competitors like all the other review sites. There are literally dozens of electronics and gadget review sites, hundreds of business review sites, book review sites, etc. So let’s start by listing some current direct competitors (neighborhood and rental reviews):

Yelp.com
ApartmentRatings.com
Neighboroo.com
RottenNeighbor.com
StreetAdvisor.com
SquidZipper.com
Realtor.com (Wikihoods)

And aside from ApartmentRatings.com, none of those sites have an Internet listing site/help users find rentals. Here is what I think is keeping social media sites to from flooding the Multi-family housing space.

1) Relationship driven industry – At every conference I go to, I feel like I am at a ABC High School reunion and I went to XYZ High. The sales people, marketing directors, VP’s, and even CEO’s all know each other from years of working together, and it is like a revolving door, with employees moving from company to company. So everyone knows each other and it makes it much easier to get a meeting with the decision makers of REITs or management groups if you’ve been buddies with them for years. Incumbents have a much easier time keeping sales contracts, and new-comers are left to have to take those away. No revenue = No company

2) Small Market Size – VC’s typically want at least a market of one billion. I’ve hear $500 million, but VC’s are looking for a 10 times return and you really have to have a strangle hold on the market to return 10 times in a small market. The total spend on online advertising in the multi-family housing space is $700 million. No funding = No company

3) The Stickiness Factor – Since people only move once every 18 months, creating a community and stickiness is a difficult obstacle to overcome. Unlike restaurants, news articles, or electronics, people only move once every 18 months. However, I think it is similar to TripAdvisor with reviewing major trips. No content = No company

4) The ApartmentRatings Factor - I call this the ApartmentRatings factor because the website ApartmentRatings.com was one of the first social media entrants to enter the Multi-family housing market. However, they set the stage for why the industry is so behind in dealing with social media. Inherently, most people are not satisfied with their apartment and satisfied with their location. So they used ApartmentRatings.com as a medium to voice their dissatisfaction with their property management groups and it left a sour taste with the Multi-family housing industry. Mention ApartmentRatings.com with a group property managers is like saying you’re voting for McCain in San Francisco. No support = No Company

I’m sure there are a dozen other reasons, but I am predicting a flood of new companies/existing companies switch their model to incorporate social media in the next 12 to 18 months. Moving is one of the most difficult things to do in life, and it doesn’t have to be.

*As an aside… how is it that there are three toilet review sites out there? SitorSquat.com, MizPee.com, and Diaroogle.com.

So I recently received an email from my sister who is considering moving from Orlando to Los Angeles. She is a well-to-do doctor and is a bit older, so I am not sure if she knows the project I am working on. Interesting enough, she sent out a mass email to all of us California goers and thought the topics and questions she asked was very interesting.

1) How extravagant is the cost of living near UCLA? We have a 3500 square foot house filled with furniture in Florida. I’m assuming we would have to sell/donate/cry over not being able to move everything to LA. What’s the going rate on at least a 3 bedroom house down there?

2) How bad is the traffic on a daily basis? You all know how impatient I am. Will I go crazy driving there?

3) What are some nice neighborhoods to live in near UCLA proper and UCLA-Olive View?

4) Are the amenities of LA worth the inflated cost of living?

5) Do any of you have a grasp of the schooling system out there and the pros/cons or private vs. public near UCLA?

Here are some of the responses so far:

2. Traffic is bad. From UCLA to OVMC, it’s fine in the morning (25 minutes) because you are going the opposite direction in traffic. If you are trying to get from OVMC to UCLA at 6pm, it can take up to 1.5 hrs. I’d budget 1 hour on average during traffic. Yes, traffic is THAT bad. That’s why everyone says LA is nice except for the traffic. It’s like asking someone in China whether or not there are THAT many people there. Yes and yes.

2) Traffic is absolutely horrible around westwood — especially after work takes 30 hour to move about 2-3 miles. My suggestion if you’re covering olive view is to live in westwood, commute to olive view as you’re doing reverse commute (takes only 30 minutes to get to olive view). commute back is fine until you land in westwood when it gets hard to get anywhere between 4pm-8pm.

I agree with Tina, don’t plan to commute into to UCLA in morning and out of it in the evening– it’s impossible. i’m quite trafic tolerant but i would go crazy doing that for more than a month.

Apparently LA traffic is bad… any other issues that you think movers would find most important?

Taking the lead from Google and Slide.com, we decided to push the website live before all the bugs have been worked out.  Here was the debate:

Pros:

1)  Get early feedback about the idea, layout, content, and functionality.

2)  Test functionality, servers, and load speed in a live environment.

3)  Keep momentum external and internal.  Clients, users, competitors, and investors want to see something, even if it is not perfect, and our developers, sales, and team need to know we making progress.

Cons:

1)  Bloggers like Scoble may write that he really loves our website and let the world know, just like these two articles titled, Startups: your web site sucks and I reward innovation with positive reinforcement and support.

2)  Competition may copy our idea and funtionality and launch in the cities we have not reached yet (Though this will happen regardless).

3)  Press, customers, clients, and investors may not be able to see through the small bugs and view the idea as faulty, and not just the functionality.

Most people say you only get one chance at a launch, but I disagree.  With a value-added service that is sustainable, we will have plenty of opportunity to help renters.  Our model, product, client-base, and users will change a thousand times before we finalize our vision and product, so it is important to get that feedback early and often.

So I know the site has bugs, but we need feedback, thoughts, opinions, advice, and even the rare “hey, I like it”.  Here is our new slogan, RentWiki.com – building what our users want, but you have to tell us first.

There has been some interesting discussions about who to select as your early adopters.  This hits me close to home because we are currently deciding our specific launch strategy and how that relates to early adopters. An article by Robert Scoble touches on the importance of early adopters to the success of any project, and an article by Alexander van Elsas discusses how Silicon Valley early adopters can be a quick way to trap your startup into failure.

For RentWiki.com, our early adopters and early contributors are the key to our success and growth.  They will determine our content, features, functionality, and scalability.  However, we much be aware of the minority voice that is tied to early adopters.  We are trying to help movers find great neighborhoods and avoid bad ones.  And our end mission is to provide a vehicle for people to share their personal stories and knowledge of neighborhoods… a simple review site would probably suffice.  However, early adopters (myself included) want a service above and beyond what is currently available.

So the question remains, should our early adopters be the Silicon 100,000 or less mainstream internet users?