How Business Uses Web 2.0 – It’s All About Relevance Says McKinsey Study

 

Yet another McKinsey Study examines the perspectives of global business executives on the outcome of their Web 2.0 technology investments and future plans.

Here are excerpts from the full report available here (Free sign up required).

• By and large, executives are satisfied with their previous investments in Internet technology, and most are investing in trends that promote automation and networking online. Nearly three-quarters say that their companies plan to maintain or increase investments in Web 2.0.
• Companies that acted quickly in the previous wave of investment are more satisfied than late movers.
• Asked what might have been done differently… Forty-two percent say they would have strengthened their companies’ internal capabilities to make the most of the market opportunity.
• The most frequently cited investment in Web 2.0 is Web services, being used or considered by 80 percent of the respondents familiar with the tools. Peer-to-peer networking also is popular; 47 percent say they are using or considering it.
• Nearly two-thirds of those investing in Web 2.0 think they are important for maintaining the company’s market position, either to provide a competitive edge or to match the competition and address customer demand.
• Though China and Latin America say that their companies are late followers or had invested cautiously, they now plan to invest at the same rate or even faster.

 

 

• Executives say they are using Web 2.0 technologies to communicate with customers and business partners and to encourage collaboration inside the company. Seventy percent say they are using some combination of these technologies for communicating with their customers.

 

 

• To communicate with business partners and suppliers, companies are using Web services, peer-to-peer networking, collective intelligence, RSS, and peer-to-peer networking.
• Companies are using the same technologies to help manage knowledge internally. Just over half of respondents say they used one or more Web 2.0 technologies for that purpose. Just under half use these tools for designing and developing new products—for example, setting up systems to gather and share ideas.

 

 

• Blogs, podcasts, and mash-ups trail technology trends that allow people to contribute knowledge to a common effort or allow machines to exchange information more easily.
• Some 43 percent of companies are even more focused on networking and collective intelligence technologies than the global average. These companies are likelier than others to be large, in high tech, and in Asia. And some 22 percent are much likelier to have invested in RSS, blogs, and podcasts than others; these companies are also likelier to be in industries such as media and telecommunications and located in North America.

 

 

 

Lego My Favorite Movie…Brick Head!

To help slide into the Labor Day weekend.

Someone has too much time on their hands…..

Form Venture Capital from Your Own Customers

Ever been in a meeting, got all excited about a new project, and then the air goes out of the room when you look to see how much available capital you have to fund a good idea?

What if I told you that a load a venture capital can be had for new projects and that the source of that capital can come from your own targeted consumers?

The product development strategy is called “crowdfunding” which I first wrote about last Spring by showcasing the German & US music companies SellaBand and Magnatune. This approach is used widely among music industry artists to bypass music publishing companies and “go direct” to their fans who are now seen as much as investors as listeners.

ArtistShare “takes advantage of the latest developments in technology to allow artists and fans from all over the world to connect with each other directly. With technology developing at such a rapid rate it will not be long before it is impossible to “protect” digital data from being shared altogether. ArtistShare solves this problem by paying artists up front and allowing the fans to experience the excitement of the creative process. The art industry has become a service industry and ArtistShare is at the forefront of this new paradigm.”

Notice they mention the erosion of “protected digital data” or DRM. If you are an STM publisher, “open access” isn’t a new thing nor Google scholar nor other free digital repositories. So what’s interesting here is that crowdfunding models might be useful to redesign better approaches for publishers who are also under constant pressure from audience segments to start new niche publications which might not pay for themselves.

What Does It Take?

It takes a combination of the right “customer-needed” idea, a customer experience that promotes through two-way conversation with the potential funder, let’s them contribute ideas or feedback to the project as part of the production process, and ultimately, gives them some incentive for their investment.

One form of customer conversation the artist uses at ArtistShare is radio. Web-based audio files run from a music player let’s the artist share their thoughts on the ongoing project and provide other content unavailable to the public.

Click on the image below to listen to this artist discuss their current project.

In the music world, incentives would be free artist CD’s but in the association world it might be a free registration to the crowdfunded conference they “backed.”

To discover the magic of this product development strategy, examine SellaBand, Magnatune or ArtistShare.

One thing to keep in mind especially if this approach has not worked for you. As you reassess the process, pitch, design and delivery, ask yourself:

• Was the project driven to fulfill a large, compelling customer need?
• Did you offer the proper incentive to your “investor?”
• Was the production process designed to be inclusive of your investor member in some way?
• How did you structure the conversation with your investors about the idea and its ultimate benefits?

One more reason why you need to build community around your own product and service experience at your site. It’s a worthwhile investment toward building customer evangelists.

For example, look at your own site.

What makes your site experience “exciting” for your buying public? Are you just selling a “mass-produced” product or a solution custom fit for their needs?

Turn your members into financial backers of projects they are willing to self-fund, let them contribute their ideas, feed a frenzy, design and deliver on the promise.