Facebook IPO Follow-Up: Lil Bit O’Egg on My Face, But…

So, do I have egg on my face from last week’s glowing post about Facebook’s IPO?

Perhaps so. Then again, it appears as though the handling of Facebook's public launch was carried out by the financial firm of Larry, Curly, and Moe. Folks like you and I were hung out to dry, and firms like Morgan Stanley and their cronies (I don’t use that word factitiously) gamed the market to make money as the stock dropped. Today, symbol FB is hovering around $30 per share, and guess what: They’re still making money.

As I mentioned in last week’s post, I believe in the market economy, especially one that is fair. I know nothing about the law around what happened or did not happen in last week’s IPO, but I do believe that the public was duped. Morgan Stanley will tell you that everything they did was legal. Well, that’s what happens when you have lobbyists writing banking and securities laws. So, if everything that happened last week was legal, then there’s work to be done.

Am I right on this at least?

What’s Changing the World Worth?

On Friday, Mark Zuckerberg’s little company Facebook went public on the Nasdaq. I know, you heard it here first. This is a company that, most likely, has changed the world unlike anything we’ve seen since the Civil Rights movement. Yup. I said it. I know how much people love to mock the company. We complain that it sucks our minds out of our bodies. It consumes us. It’s the dashboard of our lives, and while on the one hand, we miss the days before it existed—on the other, we can’t imagine life without it.

How many people can say they’ve had this much of an effect on the world? Not many. Henry Ford. Thomas Edison. Steve Jobs. Bill Gates. George Washington. Martin Luther King, Jr. And now we must add a quirky, socially awkward technologist to the mix: Mark Zuckerberg. The fact is, Zuckerberg invented a platform that has changed the world, from the Middle East to the very fabric of our society.

I have seen people’s lives changed in very poignant ways. I have seen acquaintances go from the brink of suicide to being saved as a result of Facebook. I have witnessed people who have gone missing being found. I have reacquainted myself with friends who I thought would never be a part of my life but are now fully engaged in my life. You have too. For this, you must thank Zuckerberg.

I’m a capitalist. That’s no surprise. And I think Zuckerberg and his team should be paid handsomely for creating something so important. Is he worth $20 billion? I don’t know. Ask the citizens of Tunisia or Egypt. What’s he worth to them? Why did he have meetings with President Obama? Entrepreneurs are a tricky bunch. They’re often ruthless human beings. Anyone who’s read Steve Jobs’ biography knows this. It takes an incredible amount of gumption to succeed in business, let alone change the world. Frankly, I’d be a much more successful businessman (financially speaking) if I were more aggressive. I’m not; therefore, I do not attain the ridiculous spoils of a market-driven economy.

But to me, the market is an amazing democracy. The stock market allows individuals to put their money where their hearts and minds are. The Facebook IPO was a classic example of this. Investors—though not many of us, probably—were given an opportunity to invest hard-won dollars into something they believe is important. Sure, there are speculators. Sure, there are institutional investors who are shadowy subjects looking to make a quick buck (or millions). But truly, if you had access to Facebook stock and had some financial liquidity, I bet you’d invest too.

So, what is Mark Zuckerberg worth? Whatever the market says, as gauged by people like you and me who find value in Facebook. I do. It’s changed my life. It’s connected me to long-lost friends, brought my family together in ways previously unachievable, and helps support organizations—including many nonprofits—that were previously limited to less cost-effective resources. Whatever we may feel about Zuckerberg personally, we cannot discount that he had a vision and made it happen. And he should be paid well for it.

Word of Mouth Isn’t a Fluke

Here I sit at the Corner Bakery off Michigan Avenue in Chicago. Up the street at the Radisson Blu Aqua hotel (one of our beloved clients, I might add), the Word of Mouth Marketing Association (WOMMA) is holding its annual WOMMA-U conference. Some of you might chuckle a bit to know that there’s an actual professional organization for something that seems as organic as “word of mouth.” But a funny little thing has happened over the past eight or so years: The advent and now dominance of the social Web has made old-fashioned, over-the-fencepost word of mouth very scientific, measurable, and amazingly scalable.

The latest stats show that each individual on a social network is connected on average to nearly 250 other people. Since marketing organizations are typically the department to which social marketing has been bestowed, much attention is given to fan and follower counts. These top-line figures are of course important, but they are truly just the tip of the iceberg. I’m often struck by how much attention is given to these top-line numbers and how little attention is given to the impact that these followers potentially have upon an organization. Think about it. It’s simple math. If an organization achieves 10,000 followers across its assorted social presences, it now has the potential reach of 10,000 x 250, or 2.5 million people. That is the important number.

But what to do about this staggering potential? This potential is what we in the biz are calling “brand advocacy,” and it assumes a couple of essential points. One, your customers have tremendous power. Two, when satisfied, they can do much more than simply tell a friend or two about your brand. They can tell their network. You see this in tweets and Facebook updates. A person of influence can push the dial. Let me tell you about the time Dr. Phil sent out a simple tweet about my client, Feeding America—stuff exploded. That is all: Dr. Phil sent a tweet, and everything changed. That’s powerful.

The challenge I see for brands today is to invest in these post-sale advocacy activities. I talk with many brands that simply hope that people will say good things about them. They understand this advocacy potential from social networks but don’t have actual plans or strategies around creating environments, content, and connections that fuel or encourage these fired-up brand champions to spread the word.

I often use this analogy regarding how companies are using social media: I think of it as a log, and marketers are continuously lighting matches to it but can’t figure out why it’s not catching fire. The log isn’t social media; it’s your brand. The kindling—the tweets, Facebook updates, LinkedIn profiles, Pinterest boards, Tumblrs, and all the various real conversations taking place between you and your customers—is what makes your brand catch fire.

Making It Happen

Last week, I spoke to a group of magazine publishers at their annual conference. (This magazine was a major host of the event.) As you can imagine, a great many of them have jumped full force into next-generation publishing on iPads and iPhones. As I was speaking, it dawned on me: “You people must be completely in love with the iPad. Could be your savior!” I got some eager nods.

Exactly 20 years ago, I was part of another industry that didn’t embrace next generation technology—the prepress industry. In 1992, the Macintosh and, in particular, Quark and Adobe, were all launching new software products that were essentially automating the human function of page layout, color correction, and color separation for the printing industry. I clearly remember being at Macworld in San Francisco around that same time at the launch party of Photoshop 2.0, which took automation to a whole new level. I was in attendance with several prepress company owners. Two of them were excited about the technology. Another said that classic statement: “Yeah. But the quality of the color will never be good enough.”

It was a common point of view in the early days of desktop computing. The Computer will never be able to do the task of a Human better. We know what happened to the prepress industry: There was a shake-up. Many small operations were too slow. They died or were scooped up by much larger printing companies. Today, there really is no longer the prepress industry at all. It’s morphed into creative services, document and image storage and management, and communications logistics.

This post isn’t meant to be a history lesson about the publishing industry, but rather two examples of industries whose leaders were at a critical juncture in frame of mind. Today, we are right at the center of this phenomenon. Leaders who believe that “technology is happening to them” are in poor frames of mind to navigate these chaotic waters. Nothing “happens” to you in business, with the exception of macro events like 9/11 or the banking meltdown. Technology, for one, is not happening to you. You need to make it happen for your company, your organization, your customers, and your shareholders.

“I'm going to make technology happen for my organization” is quickly becoming a key point of view and skill for which executive search firms and boards of directors are looking. Leaders who have a victim view of technology simply won’t be in the right mindset to identify new opportunities and act quickly enough before that window closes and a new one opens.

Impossible to Sink

April 12th was the 100th anniversary of the sinking of the Titanic. It was a boat built by the world’s great shipbuilder, a spectacle of engineering, luxury, and technology. History has shown a spirit of cockiness around the ship’s “unsinkability.”

We all know its fateful story. (Or do we? See the comments below this post.) The great ship had a catastrophic meeting with a match between nature, egos, climate, geography, and logistical nightmares. But this ship was engineered to not go down. Anything it met, it was promised to counterbalance with greatness. Did it tempt fate? Did the captains and boat makers believe in their own greatness to transcend very natural occurrences that even the best of engineering and planning cannot comprehend or anticipate?

I don't want to be glib in the comparisons I see to behemoth Fortune 500 companies. The death toll on the Titanic was tremendous. But we have much to learn, almost purely on a logistical level, about what happened on the Titanic and what happens in corporate board meeting rooms every day. There are myriad companies with healthy balance sheets and cash balances and stock prices, yet they are navigating in uncharted waters. Are those icebergs? Mirages?

I was in a fascinating meeting today with a client who had the wherewithal to recognize that, at a moment when they have a tremendous amount of cash on hand, now would be a good time to disrupt the entire business. He knows they’re vulnerable to the iceberg called “changing consumer behaviors.” In his case, that shadowy figure not too far off in the distance is a customer who desires to do business completely different than the 100-year-old legacy of his firm. An egotistical leader would say, “Hell. I’ve seen this before. They’ll melt and go away.” But my client is a contrarian. He’s recognizing that, in his case, the digital marketplace is as important as the efficiencies of industrial manufacturing or telecommunications a century ago.

The sea of the New Consumer—the empowered, connected, always-on, real-time one—is becoming littered with the wreckages of brands that thought they were invincible. Blockbuster. Encyclopedia Britannica. Any bricks-and-mortar that competes with Amazon—Best Buy? Perhaps even Yahoo. These are firms for whom the tips of the icebergs are those consumers who give early warning that a new business model is at hand and on the horizon. To lengthen the metaphor, like icebergs, those visible consumers are most likely just a small vocal representation of a much larger trend and constituency lurking catastrophically under the surface of the water. You can’t see them. Why? Because your analytics may be in such shambles you can’t even see them.

Use this 100th anniversary of the Titanic as a moment of reflection. At the end of the day, you too have thousands of lives at stake, those of your employees and shareholders who expect you to navigate these rough waters, not with arrogance, but with laser-focused attention to what’s ahead with a healthy dose of skepticism to your own operations, technology, and engineering. Doing otherwise assumes a lethal level of clairvoyance and omniscience that is unreal and unsustainable in our fast-paced world.