This blog post is going to introduce some key points from the esteemed book Wikinomics by Don Tapscott and Anthony D. Williams and provide some tangible examples about how companies can use them.

Wikinomics refers to the recent phenomenon of user generated content in social media and mass collaboration. Tapscott and Williams argue that how individuals interact with each other and with society has fundamentally changed and in order to be successful companies, governments and people need to unleash the power of mass collaboration.

The book starts by highlighting Time magazine`s choice for person of the year in 2006 was “You – the online collaborator.”

In Hawaiian, wiki means quickly. Wikinomics is now about companies can “conceive, design, develop and distribute products and services in profoundly new ways”. While Wikipedia is probably the most well-known wiki site, this post is going to look at an unusual example.

Enter Canadian mining company Goldcorp. In 2000, Goldcorp’s CEO Rob McEwen was facing significant problems, Goldcorp had the rights to explore gold ore deposit in Red Lake and they needed help.

Inspired by the development of Linux’s open collaboration methods, McEwen established the Goldcorp Challenge. Goldcorp set $575K in prize money and provided “every scrap of information about the 55,000 acre property” on their website. Within weeks – submissions came in from across the world and eventually Goldcorp was able to leverage that mass collaboration and transform itself from a $100M company to a $9B company.

Now this is obviously suffers from winner’s bias, this was a very risky move that could have gone sideways. However, it demonstrates an extreme example that should help make the case about how valuable mass collaboration in the modern business world can be. It also teaches us some valuable lessons about how companies can use mass collaboration to improve performance.

Lesson 1: Everyone can use them – There is room for mass collaboration even with the most secretive companies as demonstrated in the example above by Goldcorp.

Lesson 2: Employee engagement – Mass collaboration and the use of wikis can help engage employees. For example Bell Canada uses internal wikis as an “idea exchange”. Employees submit ideas and are voted on by staff. Best Buy also has a voluntary outlet where they can share positive customer experiences, best practices, etc.

Lesson 3: Improve efficiency- Internal wikis can also improve internal efficiency by enabling staff (within and outside of your organization) to manage projects better (e.g. posting proposals, FAQs, best practices, etc.) – which can reduce emails and increased the quality of documentation.

Overall, there is lots of potential to harness the power of mass collaboration, the challenge for companies will be figuring out how best it can satisfy their needs.

Groupon (GRPN) recently released its Q3 results where they missed their sales target and posting a net loss of almost $3 million. GRPN’s share price fell 25% bringing it down 80% below its original initial public offering (IPO) value, they are also eliminating 80 sales jobs.

This begs the question, how much longer will Groupon survive and is their business model sustainable?

GRPN was founded in 2008 by Andrew Mason and was once named by Forbes magazine as the “fastest growing company ever”.  GRPN is essentially a mass email marketing company that positions itself as win-win-win for retailers, customers and itself.

In 2010, Google offered GPRN $6 billion, however the firm declined, instead seeking to do its own IPO in 2011, which raised $700 million (valuing the company at $12.7 billion). At the time, this made GRPN the largest IPO by an internet company since Google.

Criticism of the business model have been raised for the following issues:

Attracts the wrong types of customers: 

• GRPN segments for price-sensitive customers and these customers are unlikely to be long-term customers.

Impacts operational logistics: 

• GRPN deals typically expire within a certain period. This can have significant impact on the logistics of a firm. For example, if a hair dressing salon with a limited number of chairs does a GRPN promotion, the business has a constrained number of chairs from which to serve customers. This means that it may lose those seats to lower paying customers who are unlikely to come again. This presents itself a as a challenge for firms who are looking to provide excellent customer service.

Alienates your current customer base:

• Small businesses are built on personal relationships. Groupon’s hidden cost may jeopardize your existing customer base as you are providing a deal to new customers instead of rewarding your long standing customers.

So what does this mean for small businesses?

1. Before you embark on a GRPN – develop a marketing strategy. What is the marketing problem you are facing, where do opportunities exist and what type of customer are you trying to reach. This will help you to clarify and understand what type of customer you are trying to attract and whether GRPN would appeal to that group.

2. If relevant, incorporate GRPN into your marketing strategy, however don’t limit yourself to that area exclusively. Small businesses tend to consider GRPN as a silver bullet that is an easy way to generate new leads. Businesses need to consider what financial, strategic and logistical impact this promotion may have on your firm.

3. Do your homework. Consult with other business who have used GRPN as a marketing techniques. There may be some lessons that you can learn from other’s experiences.

4. If you have an existing loyal customers consider investing your marketing dollars in them (e.g. recession discount). Focus in retention that increasing the number of people through the door.

Overall, GRPN can be an effective marketing tool, however it needs to be approached cautiously and with a clear understanding of what its purpose is and what businesses need to consider when incorporating it as part of their marketing strategy.

Once considered the biggest social media site in the world, Myspace is trying to claw its way back into the big leagues with endorsements from co-owner Justin Timberlake. Myspace released a teaser video in September to re-brand itself as a relevant online platform for artists. The site has been described as a “mash-up” between Pinterest, Instagram and Facebook with a focus on music.

This post will analyze both the NewMyspace and explore its history to ensure it does not repeat its mistakes.

Myspace’s lifecycle:

Unfortunately Myspace has followed the traditional boy-band life cycle.

Stage 1: Humble beginnings: Myspace was founded in 2003 by Chris DeWolfe and Tom Anderson, originally designed as a file storage site and it quickly became one of the most trafficked sites on the internet.

Stage 2: Stardom: Myspace was sold to Rupert Murdoch’s News Corp in 2005 for $580 million, their first major internet purchase. In 2006, Myspace’s 100 millionth account was created and the site surpassed Google as the most visited website in the US.  In 2008, Myspace generated $800 million in revenues and was valued at $12 billion. However, for a variety of reasons Myspace’s popularity started to erode.

Stage 3: Fall and struggle: In 2008 Myspace lost 10 million users between January and February 2011 and Facebook overtoook Myspace in the Alexa.com rankings.

Reasons for decline

1. Failed to “grow-up” and evolve: Myspace failed to innovate and stuck to a “portal strategy” of building an audience around entertainment and music.
2. Not user-centered: Myspace had an advertising deal with Google, which meant it was required to tons of ads on its heavily advertised space. This made the site slow, difficult to use, and less flexible.
3. Open vs. closed platforms: Myspace built everything in-house, whereas rival sites like Facebook created platforms that allowed outside developers to build new applications.
4. Buggy products: Myspace introduced a lot of features but many were poor quality and launched before they were sufficiently tested.
5. Free speech: Myspace was being investigated for allowing children’s exposure to pornography. This bad press caused new social media sites like Twitter and Facebook to target Myspace users.

Stage 4: Low point:  In 2011 Myspace was put up for sale (estimated to be worth $50–200 million), however they were unable to find a buyer for more than $100 million. In June 2011, Myspace was acquired by Specific Media for $35 million.

Stage 5: Revival: Myspace is still operational. According to comScore, Myspace has 54 million users and employs 200 people (down from the 1,600 employees in June 2009).  Alexa.com ranks Myspace’s global rank as 196 (November 2012).

The NewMyspace:

The teaser video highlights the user and artist experience of the new site.

User experience: The teaser follows the user experience of “David Croft”, as he clicks through a variety of features including mixes (playlists),  connections (friends), and  trending (background information on bands such as media interviews, magazine articles and profiles).  Each page is almost all photos and seamlessly integrates together.

Artist experience: From an artist perspective, the site is designed to give them information about who is listening to their music and where they are. CEO Vanderhook argues it is “a social network for the creative community to connect to their fans.”

A message on the website announced the redesign: “We’re hard at work building the new MySpace, entirely from scratch.”

To ensure the New Myspace it is a success they should take the following lessons from their past:

1. Continue to innovate adding features. 
2. Make sure new features undergo rigorous user testing. 
3. Use open platforms as much as possible so you don’t have to shoulder all of the work. 
4. Focus on the user experience. 

If Myspace follows these tips and is ready to learn from their mistakes, hopefully it will be able to follow in Justin Timberlake’s foot steps and regain its position as a leading social media site.