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Engagement trumps revenue

It’s been 17 months since Instagram was purchased by Facebook for just under a $1B USD. And about 18 months prior to the purchase, Instagram didn’t even exist. While the timeline from launch to acquisition is spectacular, what’s equally phenomenal is that Facebook acquired a company with zero revenue.

Sure, Facebook saw Instagram as a strategic purchase and a real threat in the mobile marketplace of eyeballs. But that’s exactly what Instagram had: engaged eyeballs. I am not speaking of mere users which are sometimes tallied by start-ups as an indicator of success (while a majority of those users only logged in once, or merely lurk). No, Instagram had true consistent engagement, and that’s what Facebook valued above revenue. Even today — a whole 35 months after Instagram was created (an eternity in Internet-years), I still use it daily as do many others.

While I wouldn’t consider the Instagram base as a whole to be a community per se, the lesson we can extract from this rags-to-riches story is that online engagement has real value, and in the land of start-ups and M&A, it can even trump revenue.

Further reading: The Money Shot

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Has Twitter replaced IM?

That very question occurred to me today as I was DM’ing (direct messaging) a friend via Twitter. Before sending the DM, my first thought was to SMS him on my phone, or send him an email…but at the moment, sending a Twitter DM felt more efficient. I have to believe someone has already asked my same question, but even so I wanted an answer. So I publicly posed the question to my friends on Twitter, and here are some responses:

  • “I hope not. I really don’t like receiving important info via DM. Plus, it’s too slow for IMing.”
  • “Nope. Twitter has not replaced instant messaging. It just changed the “process” (of when you need to go to IM) a bit.”
  • “I don’t believe Twitter has replaced IM. It’s just another means of communication among your following.”
  • “Quite a bit, yes. Still nice to IM, though. Less than an email, more than a tweet.”
  • “Nope. Dynamic Vs Static Convos. Different uses.”
  • “For some purposes, yes. But not 100%.”

Ironically, we see that the very act of asking that question on Twitter demonstrates its strength. Twitter is indeed useful for instant and public addressing. However, if Twitter ceased to exist and I resorted to contact my friends via IM, could I have asked them a similar type of question? Technically, yes. However…would the recipients felt it was an appropriate use of IM?

IM is typecast as a tool versus a community. Sure, many IM apps overlay the concept of conference calls or rooms for public conversation on the technology, but I doubt most people would ever consider IM to be a community.

A tool or a community?

So is Twitter a tool or a community? I say both. Twitter is a tool that facilitates one-to-one and one-to-many communication, much like IM. I think my original question was stirring this sentiment in its replies. While technically, tweets and IM’s are sent differently, the user experience is fairly similar.

At the same time, Twitter is a meta-community, consisting of smaller ad hoc communities of individuals…and this is something IM will never be. For instance, communities have culture, and while each ad hoc community on Twitter has its own understood norms established by those who interact the most, the Twitter meta-community also seems to have established an overall etiquette for communication. Of course, Twitter isn’t the first; recall IRC which has its own separate culture and etiquette, and community channels.

Imagine if I sent text messages to my contacts via IM to ask my fact-finding question. I probably would have been met with some push-back because different norms exist on IM. IM is for sporadic conversations, and there’s no realization of a persistent culture. Twitter and IM are not interchangeable because of their different underlying expectations for appropriate communication.

Bottom Line: First, Twitter has become a community built upon a tool, and IM will only ever be a communication tool. Secondly, persistent conversations provide history and help cement culture, and culture distinguishes community from mere communication.

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More on Economic Development: Recruiting

One aspect of a city’s economic development strategy is local employment. In particular, local employers must be able to grow their employee base as business success necessitates.

In the technology industry, a significant segment of the employee base has a professional background, and specifically technical expertise. Thus, finding the employee with the right combination of technical skills and soft skills can be a challenge. When presented with a job requisition, I have observed that corporate recruiters begin by exhausting their own network before approaching alternate resources (e.g. job boards, third-party recruiters, etc.) The reason is that candidates sourced from an existing network often results in better quality (not to mention faster and less costly) placements. In fact, based upon this phenomena, many employers have established referral programs that incentivize their own employees to make recommendations from their respective professional networks. After all, employees are generally excellent judges of a potential coworker’s technical skill, and furthermore would not recommend someone who couldn’t pull their own weight or was difficult to work with. Thus, corporate recruiting efforts benefit from well-networked employees.

In the Door64 community here in Austin, many human resource managers have encouraged employees to participate so that the effective hiring network reach for the entire company expands. It’s a win-win scenario: each technology professional builds his/her own network of local colleagues which provides additional career security, and the company gains a premium qualified referral base for hiring the best talent.

Cities should encourage the creation of grass-roots niche communities so as to foster these professional networks so local businesses can efficiently find the talent they need to succeed.