Of the top 10 sites in Internet traffic, seven are involved in social media. And, a big part of social media is social networking. Ever wonder why? Ever wonder what the business implications are?
Check this video [1] where Physicist, Albert-Lazlo Barabasi and Political Scientist James Flower, discuss the issue.
Flower explains how Howard Dean 2004 campaign started using neighborhood social network to build a grassroots movement. Obama’s campaign took this a big step further using online social networking. A couple of points with big implications for business: Obama accepted online contributions of even one dollar which was less than the cost to process the donation. Why? Because it started a process of engagement and spreading the word through social networks. Typically, once engaged the level of involvement grew and so did the dollar value of an individual’s contribution. The second big point, once the network effect took hold, millions of American’s got involved. The Obama campaign raised more money than any presidential campaign in history. Obama also did pretty well in the polls.
Barabasi’s conversation about the growth of hubs and nodes in networks is also very interesting. He makes a parallel between the biological expansion and networking of cells. Why is this important to business? One, social networks are a hot topic and understanding them is getting increasing scientific attention. A second reason with more direct implications is the very notion of hubs and nodes. My spin on this is that in a fast-changing and increasingly complex world, it is not just how many people you know. Adaptability comes from having relationships from a diverse set of hubs (people) and through them to nodes (people) they know. As innovation continues its fierce pace and traditional industry boundaries collapse, it is extremely advantageous to have a networked brain trust that can help one make sense out of things.