The real winners are going to be those who can innovate and build businesses around them – not just be the first guy to clear a path into the woods.

Cheers.

After a long period of soul searching, I have finally come to a very important realization (and conclusion) on the real value of a social network.

A social network is only as valuable as the service that sits on top of it.

I deal with a lot of early stage entrepreneurs, some of whom are dabbling in the online social networking space. Many of them struggle to get a handle on what their compelling value proposition is (or will be.) I should know – I was one of them.

Building a successful social network is not about aggregating eyeballs, traffic, or Google ad dollars. It is about aggregating user participation, while simultaneously altering behavior. If a social network isn’t setting out to alter behavior, then I am convinced that they will have a long battle ahead of them. Merely facilitating existing behaviors is probably not going to be enough.

It isn’t about bringing enough people together who will view your ads. It isn’t about bringing enough people together so you can eventually sell to Google. It isn’t about bringing enough people together so they can “connect with their friends.” But rather …

Can you bring enough people together who want to leverage your technology to introduce an efficiency into an area of their lives in a way that will have a significant impact?

The social network should be viewed as the “vehicle” for the real star of your show – rather than being the main attraction in and of itself. Connecting people for the sake of connecting people is passe. So 2003. Why are you connecting people? What are they sharing? More importantly – how will these connections and sharing patterns affect their businesses? Their lives?

The question isn’t “what is the value of the social network as a business?” It should be “what is the value of the social network to the business?” There is a very important distinction.
Cheers.

On a related note, Tino will be appearing as our January guest over on the StartupLounge.com podcast, so be sure to stay tuned for that. We’ll be discussing TAG’s role in promoting entrepreneurship in Georgia.

Cheers.

The discussion was lively, and carried over into lunch. The group really got into what we we’re doing at HiddenMarket, and where we’re going with it all. We got some good questions, too. Nothing beats getting out there in front of users and doing “show and tell.” If you want honest feedback, and suggestions from the trenches, you can’t get the full picture by sitting at your desk. Ya gotta get out there and beat the pavement a bit.

My big takeaways were:

1. Everyone agrees that there is a “dilution of trust” in many existing social networks.
2. Preservation of “trust” will be a critical area moving forward.
3. It is time for social networks to move beyond their current state if they are going to add real value in the business community.

Fortunately for us, they also were pleased with our approach to addressing these and other issues, which was both refreshing and validating. Especially coming from this group. The level of social capital in the room was simply enormous. We are definitely thrilled to have Kettering as one of our beta groups.

A quick shout out to Craig Larson, a brilliant man, a co-founder of VuBotics and a good friend. Craig was kind enough to record my presentation on his handheld digital video recorder (where I was able to snag a couple of stills for this post.)

I also want to thank Steve Walden and Armando Cuevas, two of our advisory board members, for attending and showing their support. Same for Gregg, Lee, and Josh from the Gang of 5, our entrepreneurial roundtable. Fun!

Cheers.

The quote from Fred that keeps sticking with me is this:

Friendship has been defined on most social networks as the people who get their faces on your profile. But as these social networks start to add real applications/utility on top of the relationship maps it’s going to create issues. Friendship is not a monolithic thing. It’s a nuanced thing.

What we have seen from talking with literally hundreds of users of professional social networks is what we’re calling a “dilution of trust” among users. Many people only “know” a small fraction of the people in their immediate online network. If everyone had played by the rules, and only “connected” with people that they actually knew, then we would likely be having a different conversation here.

Current social networks have largely become a “numbers game.” The quality factor has been largely supplanted by one of quantity. Instead of saying “wow, look at this nice, tight collection of strong contacts that I can leverage”, it has become a “Wow, honey, look! I now have 25,000 friends, and am connected to everyone in the free world!” The dilution of trust.

And as Fred points out, when “real applications” start appearing (or trying to appear) on top of those relationships, the problems become pretty apparent. Apples and oranges. Square peg, round hole. Whoops.

The social model we’ve implemented with HiddenMarket was born out of our realization that it was time for the a new iteration in social networking (at least on the B2B or professional side, where we sit.) It is refreshing (and validating) to see someone like Fred speaking out on this issue.

Cheers.

You can read Alex’s post here, but I will offer a few thoughts to go along with what he (and Fred Wilson and Paul Kedrosky) are saying.

First, to have a “bubble”, there has to exist something to exert upward pressure, generally around pricing, cost, valuation, etc. I see nothing doing this, for all of the reasons pointed out in Alex’s post. VCs are active, but they are certainly not investing at the levels we saw before. There are certainly “pockets” of heavy investment, but nothing on the scale preceeding the stupidity-parade of the late 1990s.

Another point I’d like to make is that the bursting of ye olde digital bubble in the late 1990s affected most major markets. Atlanta, for instance, was one of the heaviest hit areas back then. The investments back then were fast, furious, and all over the map.

That simply isn’t the case now. Believe me, there is no Web 2.0 bubble here in the southeast. Most investors here couldn’t tell you the first thing about Web 2.0. They are still largely continuing to lick their wounds.

The key point, to me at least, in Alex’ post was his statement regarding the lack of copy-cat investments. This is a HUGE distinction from the 1990s. If one online dog food company secured a round of $5M, three more received $10M, with a fifth startup receiving the $50M warchest. That is not the case now; with a few exceptions – such as the rush to solve the world’s “video file sharing problem.”

What we see now are lots of bootstrapped startups, with the VCs letting a “clear” winner rise to the top, and then infusing capital into that player to bolster their postion. Instead of investing in lots of copy-cat plays, VCs are now searching for those plays that complement those other portfolio investments. In other words – taking previous investments to the next level. Big difference.

And has been pointed out by everyone already, the deal sizes are not at pre-bubble levels, which in effect reduces the impact of failures.

I’d be more worried about the housing/real estate bubble.

Cheers.

Our goals with the panel:

• To disseminate information about the Business and Social aspects of Blogging.
• To show how Blogging has value to the business and customer.
• To show the audience that Blogging can be an effective means of Business and Social interaction.

We have a great panel as well!

• Michele Moore – CEO Happiness Habit, Inc. (Panelist)
• Sherry Heyl – What a Concept! (Panelist)

The program will take place on Tuesday, March 14th, 2006, at 7:30am., and will be held at the Microsoft SE Headquarters in Sanctuary Park, Alpharetta, GA.

I look forward to seeing you all there!

Cheers.

This will be similar in scope to the presentation I gave recently at the Kettering Executive Network (KEN), although it will be a little shorter due to time constraints.

Abstract: Join Atlanta executive blogger and ExecuNet member, Scott Burkett, for a look at how executives (in transition or otherwise) can take advantage of Web 2.0 concepts to further extend their personal, professional brand. Topics covered will include an overview of professional blogging, steps for getting started, sound strategies to employ, pitfalls to avoid, corporate concerns, and several case studies. Learn how to harness the power of a professional blog to drive traffic to your bio/resume, and how to turn those visitors into interviews!

If you would like to have the presentation delivered for your organization, by all means, let me know.

I look forward to seeing you all there!

Cheers.

I will provide an overview of business blogging, and share you some solid strategies for taking advantage of blogging to further build your executive brand.

I will be presenting on Friday, February 17th, 2006, at 10:00am. The meeting will be held in Suite 700 of the Seibel Systems building at 1 Glenlake Parkway.

If you are not a member of Kettering, but would like to have the presentation delivered for your organization, by all means, let me know.

I look forward to seeing you all there!

Cheers.

As part of my research, I’d like to invite everyone to participate in a short online survey. Come on in and get your 15 minutes of fame! :)

Cheers.