Category Archives: Business

The Problem With Facebook: Young People Really Are Social Networking Elsewhere

Remember yesterday when I was talking about Facebook’s “young person” problem? It turns out, there’s actually data to back this up. It turns out, there was actually an article in TIME that I didn’t realize had data when I was writing my post yesterday:

According to iStrategy, Facebook has 4,292,080 fewer high-school aged users and 6,948,848 college-aged users than it did in 2011.

That amounts to more than 11 million users gone in the past 3 years. While Facebook has more than 1 billion people, so 11 million might not seem like much, but is it a trend? That is, should this be something that the folks over at Facebook should be worried about. Well, there’s a handy graphic that can also be found in the TIME article, (but it comes from iStrategy):

Two of the cells I want to draw your attention to are already conveniently highlighted in red: the ages 13-17 and 18-24. If you’ll notice, both of these age groups are experiencing negative growth. Of particular noteworthiness is the 13-17 age group, which is down 25% over the last 3 years. Again, as I said earlier, Facebook’s user base is rather large right now, so it might not have that big of an effect anytime soon, but it is something to watch out for.

In the article, the author also points out that part of the reason people advertise with Facebook isn’t necessarily for the volume of its users, but because of all the information that it has on its users making microtargeting that much more effective. Maybe this information is enough to overcome the decline in new users, who knows. As I said yesterday, if I were part of Facebook’s team, I would be worried about the continued decline in my user base — especially because it’s the younger folks who are leaving. Why?

Pretty soon, these young folks are going to be reaching those prime marketing age groups (18-34) and if they’re already not using Facebook, that could be bad news. In fact, if they’re not using Facebook, they’re probably using some other social network to communicate and that is where the marketing dollars are going to go. I suppose only time will tell.

The Problem With Facebook: Is It Really Out of Room to Grow?

I rarely read the front page of YouTube, but today when I typed in YouTube to my address bar (with the intention of finding some music to listen to while I worked), one of the videos I saw on the front page was titled “The Problem With Facebook.” Truth be told, I thought it was a video by MinutePhysics and thought that there was going to be some scientific explanation of Facebook’s problems, but it turns out the video was by 2veritasium. (I guess MinutePhysics may have liked the video, so that’s why I saw their name or maybe they had just come out with another video, who knows.)

Anyway, if you have Facebook (or had Facebook) or know anything about Facebook, I’d say it’s worth the 6 and a half minutes to watch it:

I’m not sure what the fellow’s name is, but it reminds me of when George Takei went on a bit of a rant about Facebook not letting him reach all of his fans on Facebook. At the time, I think I still had a Facebook profile (rather than the page I have now) and I thought that was strange that your posts weren’t reaching all of your friends — by design.

The fellow in this video makes that same point, but he does it in a more thorough way than I remember Takei doing it (which is not to say Takei didn’t do it), and he also juxtaposes Facebook with YouTube. He makes a rather compelling argument, but something I don’t think he highlights is that he kind of has a vested interest in YouTube being more successful — his videos are hosted on YouTube! Now, this doesn’t really take anything away from the argument — it’s sound — but I think it’s worth noting.

Throughout the video, he talks about the incentives. I wonder what Michael Sandel would say about the incentives in this situation. Would he say that the incentives have been perverted? It’s tough to say because Facebook is trying to make money and there’s nothing inherently wrong with that, but I wonder if maybe they’ve strayed a bit too far from the original purpose of the site.

There’s one last thing I want to highlight from the video — in part — because it dovetails nicely with something that I’ve been trumpeting on here for awhile. He argues that Facebook has already maxed out, with regard to the amount of time people spend on the site per day (approximately 30 minutes) and that Facebook has already reached just about everyone in the developing world. When it comes to online video, however, he argues that there is still lots of room to grow based on the fact that people still don’t watch that much of it when compared to television. I might not put it in those words exactly, but I think he’s on the right track.

If even the President of the United States knows that Facebook is becoming or already is unpopular with young folks, I have to think that the smart people over at Facebook know this, too. As they’ve got a fiduciary duty to their shareholders, I’m sure they’ve been hard at work trying to figure out just how they’re going to capture more value — translation: how they are going to make more money.

Who knows… maybe Facebook will soon go the way of the social networks that have gone before it. Remember MySpace?

Can an Holacratic Organization Be Successful?

Because of some of the work that I’ve done, one of the things that really interests me is organizational structure. I like peeking into the ways in which an organization functions because I think that we can learn a lot about how and why they succeed. As a result, when I heard that Zappos was going to be transferring over to an holacratic organization, I was very interested:

During the 4-hour meeting, Hsieh talked about how Zappos’ traditional organizational structure is being replaced with Holacracy, a radical “self-governing” operating system where there are no job titles and no managers. The term Holacracy is derived from the Greek word holon, which means a whole that’s part of a greater whole. Instead of a top-down hierarchy, there’s a flatter “holarchy” that distributes power more evenly. The company will be made up of different circles—there will be around 400 circles at Zappos once the rollout is complete in December 2014—and employees can have any number of roles within those circles. This way, there’s no hiding under titles; radical transparency is the goal.

Typically, when people think about organizational structure, three systems come to mind: divisional, functional, and matrix. [Note: as an aside, I wrote an answer for a question on Quora a couple of weeks back about how organizational structure can support an organization’s strategy.] A divisional structure is one in which there is a degree of redundancy to the organization (each division has their own HR, accounting, etc.). A functional structure is one in which there are “shared services,” such that there would be only one HR, accounting, etc. Lastly, a matrix structure is a hybrid of the two.

Now, Zappos is throwing all that out the window and is adopting a new kind of organizational structure: holacracy. To be perfectly honest, I have no idea if they’re going to be successful. I don’t think anyone can honestly say whether Zappos will be successful in this change and in fact, I don’t think we could definitively say that this organizational structure works (or doesn’t) based on how Zappos performs under this structure. However, it’ll certainly give us a window into how a bigger organization (1500+) functions in this kind of structure. From what I’ve read, this is the biggest organization to attempt to use a holacratic system.

One interesting tangent I find to this discussion about holacratic organizational structure is this idea of holons and who’s associated with this idea. I first heard about “holons” in conjunction with Ken Wilber. I’ve written about Wilber only a few times here, but he’s someone who’s certainly worth checking out, if you haven’t already. He presents some fascinating ideas on a number of topics. That’s not to say that he’s right or wrong, but he’ll certainly present a perspective that you likely hadn’t considered. And if you’ve been reading me long enough, you know that I’m a major proponent of perspective. With regard to Wilber, I’m, in particular, thinking about the work he’s done with Spiral Dynamics. That is, I wonder if, in order to ensure that an holacratic organizational structure is successful, would the “participants” of said organizational structure need to be from 2nd or 3rd tier of development or the “yellow” or “green” memes in spiral dynamics.

How Our Culture Failed Women in 2013

I’ve written before about my affinity for the documentary Miss Representation and its “brother” film that’s coming out in a few weeks The Mask You Live In. Well, a few weeks ago, the organization responsible for those movies put out a wonderful — well, in some ways — video detailing the ways in which the media has failed women in 2013. At first, it lists some of the great achievements that women have had this year and then… the video turns a bit sour.

We see a time lapse of a woman being airbrushed on the cover of a magazine, very sexist advertising (magazine and commercial), oversexed music videos, movies, tv shows, and then it turns to how the media cover some news events. There are — seemingly — ignorant men (mostly) patronizing women either in person or talking about women in patronizing ways. However, there are some really powerful moments. There’s a segment from Rachel Maddow where she’s discussing how women can have all of these ticks in the boxes and still get talked to in a negative way. There’s also — and this is my favourite — a video from this past summer when the Texas legislature was trying to ram a bill through that severely limited the rights of women regarding abortion.

I realize that for some, this can be an issue that incites a lot of passion in one direction or the other, but my preference for the video has nothing to do with that issue and everything to do with this woman, this strong and powerful woman, standing up for herself and for women to what is a room and a profession dominated by men. I remember when the now famous Wendy Davis filibuster was first starting to take shape in June and I remember turning on the stream sometime in the evening and having it running in the background. And then as they got closer to the end when things were really getting interesting. I remember trying to understand some of the wonky ways that procedure was being applied and then I remember Leticia Van de Putte…

It was one of the most powerful things I’d ever seen live. And if I recall correctly, I think these words were enough to motivate the gallery (the visitors sitting up above watching) to make noise until the clock ran out and the filibuster worked. Again, I want to make it clear that I’m not arguing in favour or against the merits of the filibuster, but just to draw your attention to that moment when Leticia Van de Putte said those words and the crowd erupted. I wish it weren’t, but it seems an apt metaphor for so much of how the world works today.

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On a slightly happier (?) and stranger point, in an edition of The Economist from late last year, someone pointed out that Angela Merkel, the Chancellor (kind of like a President or Prime Minister) of Germany, appointed a female defence minister. And not only was this defense minster going to be a woman, but also that she is a gynecologist, entered politics at age 42, and has 7 children.

I think it’s great that Germany has appointed a female defence minister, but I wish that it weren’t news that Germany appointed a female defense minister. I look forward to the time in my life where the fact that someone’s been appointed to high political office or has been crowned the CEO of a big corporation and happens to also be a female is not newsworthy.

Note: You’ll notice that I made the title of this post about “our culture” and not “the media” and that’s because I don’t think it’s necessarily fair to pin the failure all on the media. There’s a feedback loop between our culture and the media. Yes, the media could certainly end that feedback loop, but so could the culture. In a way, everyone deserves a bit of the blame.

Facebook is a Poor Predictor of Performance of Job Applicants

A few months ago, I planned on writing more posts about academic research. I wrote one about spending your bonus on others making you happier (than if you’d spent it on yourself), but haven’t got around to it since. My intentions were good as anyone can see from looking at the list of tweets I’ve favourited over the last 100 days. Just about all the tweets I’ve “bookmarked” to read are academic in nature.

I came across an academic article the other day that seemed quite interesting and reminded me of much of what you hear when you’re in university: be careful what you put online! Even after you’ve graduated, you often hear that your employer (or potential employer) will be watching to see what you put online, so be careful what you put on Facebook. We’re told that it can have an adverse effect on our ability to be hired (or maintain our current employment).

This particular study tried to address a gaping hole in empirical research. That is, the popular press often talk about how important it is to have a pared down social media profile, but there hasn’t been much research studying the effects of potential employers using social media profiles in screening candidates. Before we take a look at some of the results, I wanted to share three important points from the article:

First, as discussed, SM [Social Media] platforms such as Facebook are designed to network with friends and family rather than to measure job-relevant attributes. Indeed, most SM information pertains to applicants’ outside-of-work interests and activities, which may have little bearing on work behavior. This factor, in and of itself, may be enough to suggest that criterion- related validity for SM assessments may be low. [Emphasis added]

The researchers raise an important point that — no doubt — you’ve seen elsewhere. Most people use Facebook in order to connect with friends & family and as a result, it may not be the best measure of how one would function at work.

Second, the sheer volume of SM information also may inhibit decision makers from drawing valid inferences. . . This large amount of information may put demands on decision makers’ ability to process all the potential cues and to determine what information (if any) is relevant and what is not. This situation may cause decision makers to rely on biases and cognitive heuristics may reduce validity. [Emphasis added]

I’ve written extensively about cognitive biases. The researchers mention of the volume of information regarding social media makes me wonder how long before organizations are using Big Data to try and analyze all the social media data in painting a portrait of a candidate.

Finally, inaccurate information may undermine the criterion-related validity of SM assessments. For example, the desire to be perceived as socially desirable may lead applicants to embellish or fabricate information they post on SM, such as experience, qualifications, and achievements. Furthermore, because other people can post information about applicants on SM platforms (e.g., Facebook), applicants do not have complete control of their information. As such, applicants may be unduly “penalized” for what others post. In fact, one study found that comments posted by others on one’s Facebook profile had a greater effect on observers’ impressions than did one’s own comments (Walther, Van Der Heide, Kim, Westerman, & Tong, 2008).

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In this study, the researchers had recruiters rate Facebook profiles of potential job candidates and then followed up with those job candidates after they’d secured employment. As you might expect from where this post has led, the evaluations the recruiters gave of the potential job candidates based on their Facebook profiles were unrelated to the ratings issued by supervisors on a number of factors: job performance, turnover intentions, and actual turnover. Moreover, these predictions based on Facebook profiles aren’t more useful than other, more common methods: cognitive ability, personality, self-efficacy, or even GPA. What’s more, they found that Facebook ratings were higher for females (vs. males) and that ratings were higher for White candidates (vs. Black and/or Hispanic candidates).

I understand that many managers think more data will help them make better decisions, but as has been demonstrated in this article, when it comes to job candidates, maybe checking their Facebook profiles could lead managers to make the wrong decisions.

ResearchBlogging.orgChad H. Van Iddekinge, Stephen E. Lanivich, Philip L. Roth, & Elliott Junco (2013). Social Media for Selection? Validity and Adverse Impact Potential of a Facebook-Based Assessment Journal of Management DOI: 10.1177/0149206313515524

Still Looking for a Christmas Present? Try These Projects on Kickstarter Canada

It’s the last weekend before Christmas, so there’s a good chance that a lot of you out there are out in the hustle and bustle trying to find last-minute gifts for friends and family. If the weather forecasts are to be believed, some of you might not be able to make it out into the madness that is last-minute shopping before Christmas. That’s great! Why? Well, that means that you’ll have to be a bit more creative with your gift ideas.

So, why don’t you make someone’s day (in addition to the person who you’re giving the gif to) by making a donation in their name to one of these projects on Kickstarter Canada. Also, you could just donate to them anyways — and not make the donation on behalf of someone else: it could be on behalf of you!

Note: I’ve only included projects that — at the time of writing this post — hadn’t reached their goal.

NASH: The Movie

“You may have heard of Steve Nash, the NBA superstar and multiple MVP winner. You may also know that he’s Canadian. A Vancouver documentary crew secured unparalleled access to Nash, and they’re in the middle of raising money for production and editing costs for the final film. Unlike many film projects, tiers of this project include a physical and digital copy of the final product, which gives potential backers a tangible reward for their donation.” (Source)

Stratus Watch

“The concept is as simple as it is unprecedented; a titanium wristwatch with a face that you can choose. You can choose from dozens of patterns and colours from the manufacturer, or design your own and submit it to them. The watches exude a clean, straightforward charm, and even the lowest funding tier gifts you one of them.” (Source)

Shot Time

“In what could easily be the ruin of many a young soul, this is a shot glass that measures the amount of liquor consumed over a period of time; a potent mix of a stopwatch and a case of acute alcohol poisoning. The consequences of such a device are best left to the imagination, but if it meets its funding goals, the consequences may become very real, very quickly. Hooray for progress?” (Source)

Canadian Black Garlic

“Exactly what it says on the tin; backers are funding the creation and shipping of various black-garlic-based condiments and seasonings. The majority of the project’s funding goal will go to securing a large batch of Canadian-grown garlic, and the rest will go into the blackening and production/packaging process. Is there anything more Canadian than authentic Northern delicacies?” (Source)

SpecShot

“Like the mirror universe version of the Shot Time, the SpecShot is a two-in-one system that scans your drinking water for contaminants and then posts the results online. This process could be equal parts fascinating and harrowing, depending on your results, but the ultimate goal is to spread awareness through hard data, and hopefully inspire some change to our water quality standards.” (Source)

How Americans Get to Work: Is It Time to Change Incentives?

This past Friday, there was a rather startling chart from The Atlantic. The chart illustrated how Americans get to work, by volume. That is, the total number of people who take the bus, the total number of people who drive, the total number of people who walk — you get the idea. Before clicking through to read the post, I was hopeful… afterwards, not so much:

In case the numbers are too small to read, the effect should still stand — well beyond the majority of Americans drive alone to work. Now, it’s not that there’s anything inherently wrong with this, but now that we’ve seen things like the image below, that illustrates the space needed to transport 60 people in various ways, it seems more reasonable that people shouldn’t drive alone in their car.

Of course, some folks might jump to the argument that there are more people who live in rural areas in America — not true. “In 2010, a total of 80.7 percent of Americans lived in urban areas, up from 79 percent in 2000.” However, just because the vast majority of American live in urban areas, that doesn’t mean that they have access to viable alternative means of transportation. Maybe it’s time for Americans to reconsider the emphasis on culture of cars.

 

Case Study: When The Twitterverse Turns on You

http://blogs.hbr.org/2013/12/case-study-when-the-twitterverse-turns-on-you/Every once and a while, Harvard Business Review posts a case study to their blog and solicits their readers to come up with answers to the case. After reading what was posted earlier today, I took some time on my flight back from Washington, DC to Toronto to see if I could develop a suitable strategy for responding to the ‘crisis’ at hand. Head on over to HBR and check out the Case Study. I’d be interested to hear some of your thoughts on how Canadian Jet should proceed.

Here’s what I came up with:

When faced with a decision like this, it’s important to ensure that the group isn’t succumbing to any biases in judgment and decision-making. Right off the bat, it’s clear that one potential trap is the sunk cost fallacy. While the decision to keep the contest running might be the right one, it’s necessary to discern whether this choice is being made because “this is our biggest social media campaign,” and we’ve got “nothing [else planned] on this scale.”

If it were my decision, I would advise Charlene to keep the contest. Right now, it’s going through a bit of a bumpy stage, but when viewed through an optimistic lens, these customers who have tweeted “doozies” can actually turn into some of Canadian Jet’s biggest assets. How? By directly addressing their concerns.

Seek out those customers on Twitter who have shared tweets that have had the greatest impact (reach via retweets, etc.) and apologize to them. Speak to them directly on Twitter, (but not in a direct message, part of the purpose in doing this is so that others can see that you’re) on Twitter and express remorse for their concerns. Where possible, maybe offer some sort of compensation in the form of a discount on their next flight or something similar. It’s important to keep clear that you don’t think that this makes up for the fact that they’ve “missed their daughter’s wedding,” but that you hope they can find some consolation in it.

Cable TV in Trouble? 43% of Young Adults Subscribe to Netflix

I’ve written a few times about TV, but a post from Mashable (with data!) convinced me even more that TV, or at least the viewers of it, are headed elsewhere. Take a look at the graphic below:

Pay close attention to the % of American adults who subscribe to Cable TV and Netflix. In particular, notice the 18-36 age category. For cable TV, 46% of this age group subscribes and for Netflix, 43% of this age group subscribes. The difference is negligible. We can also look at the subscription rates for satellite TV (16%) and then two other online sources: Amazon Prime (17%) and Hulu Plus (8%).

No doubt, some of the folks who subscribe to Cable TV may also subscribe to Netflix and other online sources, but it seems pretty clear where the trend is headed. In fact, if we look back at the Cable TV subscription rates across all age groups, we see a sloping line from the bottom left to the top right. If you’ll notice, there’s a decided decrease in Cable TV subscription rates from the older age groups to the lower age groups. Similarly, there’s the inverse relationship when we look at online places like Netflix and Amazon Prime. There’s a decided increase as you get into the lower age groups.

Revisiting Using Pitchers on Short Rest: Long-Term Ramifications

A couple of weeks ago, I wrote about the Los Angeles Dodgers’ strategy of using their best pitcher (and one of the best pitchers in baseball) on short rest to pitch in a non-elimination game. The Dodgers ended up winning that game and the series, but the debate over the strategy doesn’t end there.

In my post from a couple of weeks ago, I compared the Dodgers’ decision to my younger years when I was playing baseball in double elimination tournaments. This wasn’t a perfect comparison, but I the spirit of the decision to use your best pitcher was there in both. A few nights ago, the Los Angeles Dodgers were eliminated from the postseason. All but one of the thirty teams are eliminated, so this isn’t earth-shattering news. However, the fashion in which they lost is.

In Game 6 of the National League Championship Series, the Dodgers started Clayton Kershaw. Yes, the same one who started in Game 4 for the Dodgers in the National League Divisional Series. This time, Kershaw’s start didn’t go so well. In fact, Kershaw only pitched 4 innings before pulled by the manager, Don Mattingly, but not before Kershaw gave up 7 runs. So, the question might be warranted: did using Kershaw on short rest affect his ability in Game 6? It turns out, this was a thought that had crossed some minds before Kershaw made the start in Game 4.

As they say, hindsight is 20-20, but it does seem a bit prescient. McCarthy’s hypothesis makes sense, but it’d be hard to test. One may point to Kershaw’s start in Game 2 of the NLCS. He tossed 6 innings and allowed 1 unearned run. Shouldn’t he have unravelled in that game if he were fatigued from the short rest start in the NLDS? One could argue that, but the way that McCarthy’s argument is setup leads one to believe that the “fatigue” could happen later and later. So, if the Dodgers won Game 6 and won Game 7, would McCarthy have expected Kershaw to unravel during one of his starts in the World Series?

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Let’s see if we can apply this lesson to decisions in other arenas. The analogy I used for the other post doesn’t really hold anymore. We’d be better off thinking about a decision for a business. Using Kershaw in the way the Dodgers did was almost like using a certain machine in the factory to fill some rush orders. The machine might only be able to fill a certain number of orders per week, but because it’s the holiday season, the boss thinks that running it on overdrive is necessary. Initially, the machine churns out the widgets just the way the boss would have expected, but next week when you use the machine, the widgets aren’t as high a quality. And then the week after that, the widgets aren’t even of a high enough quality to give away. It’s clear, the machine needs a break and some recalibration. In weighing the risk, the boss thought that using the machine more than usual was worth it for it potentially shutting down.

There are other ways we can map out this scenario, but I want you to think about how you might be overdoing it. Maybe the machine you use at work is fatiguing. Maybe you are fatiguing from working too hard.