Potential Promise (Or, The Key to Building Network Value)

April 9th, 2006

The problem with just audiences is that without a performance the audience becomes a group that disperses, leaving nothing. (We saw this with Friendster and we’ll see it again with MySpace. It’s how things works these days).

A group needs a performance to become an audience, and it’s the audience, not a group, that adds value to networks.

The key to organizing groups into audiences is what I’ve been calling potential promise.

When Chartreuse says “audiences of the future create there own performance”, he’s partially correct. To some extent, groups develop a portion of the overall performance (they’re a required ingredient), but groups require a a greater performance to organize into an audience.

The performance in new media networks is potential promise. No potential promise, no performance. No performance, no audience. No audience, no value. And the group disperses leaving your once valuable network worthless.

Potential Promise Case Study: MySpace. I don’t understand MySpace. But I do understand that the potential promises that made it a huge success also make its sustainability difficult, and, if managed incorrectly, it’s decline rapid. (There are many: the potential of popularity, romance, humour, music, …)

A major potential promise of MySpace is disappearing. What happened to the potential promise of popularity? It’s impossible to know for sure, but I bet the disappearance has something to do with Scott Karp’s new media axiom, the more successful you are, the faster you fade.

While MySpace is slowly (quickly?) losing a major potential promise, the performance of MySpace won’t evaporate in a day, for a number of reasons. The main being that MySpace offers numerous potential promises.

How can networks organize groups into audiences around a performance? It’s not by becoming Ryan Seacrest (he’s just a guy with a really big smile). It’s by offering a unique potential promise, making sure that it’s visible to the audience, and adding (organically or otherwise) more potential promises as the network grows - ensuring short-term sustainability in an unstable world.

Potential Promise: The underlying factor(s) that organize a group into an audience, adding value to a network.

No potential promise, no performance. No performance, no audience. No audience, no value.

Viewing 6 Comments

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    Hi Fraser, Hi Char,
    I know this scenario. I've lived it. The CEO of Wolters Kluwer at the time we sold Sundance, "You're selling the company that hasn't happened yet." He was right, and we did. Our asset value was in the relationships I had made. Everything was potential. Certain to happen for sure--solid strategy--but not there yet.

    We turned $9Million invested into a $35Million sale in three years after the company had been through three years of 10% decline. How'd we do it? I found partners all over the world who'd make books with us on my terms for the privelege of access to the US market and my effervescent personality and my "I won't do it like the American do" promise. (grin)

    Took us one year to buy back the bank covenants and we still grew by 40%. The next two years were over 25% growth--all considered organic because the product was new to both markets.

    Is this what you mean by potential Fraser?

    Liz
    Successful Blog
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    Hi Fraser, Hi Char, I know this scenario. I've lived it. The CEO of Wolters Kluwer at the time we sold Sundance, "You're selling the company that hasn't happened yet." He was right, and we did. Our asset value was in the relationships I had made. Everything was potential. Certain to happen for sure--solid strategy--but not there yet. We turned $9Million invested into a $35Million sale in three years after the company had been through three years of 10% decline. How'd we do it? I found partners all over the world who'd make books with us on my terms for the privelege of access to the US market and my effervescent personality and my "I won't do it like the American do" promise. (grin) Took us one year to buy back the bank covenants and we still grew by 40%. The next two years were over 25% growth--all considered organic because the product was new to both markets. Is this what you mean by potential Fraser? Liz Successful Blog
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    • v
    I may be, but I also know that I struggle to articulate ideas that are still forming in my head, so I'm going to cycle on this one a little bit more.

    The potential promise is dependent on the audience, that's why it's different and unique for each network. Each network develops/requires it own potential promise, yet a group needs to see (and believe in) the potential promise in order to form an audience.

    A highschooler moving from MySpace to Facebook isn't necessarly doing so because MySpace is treating them poorly, they're doing it because they value the potential of populating Facebook more than they do the potential of MySpace.

    A group is a critical ingredient for developing an audience, but there needs to be something else there, and it's not just Ryan treating them right (although that's another critical ingredient). There have been, and will continue to be, networks that treat their audience well but lose it because of an alternative offering a greater potential promise.

    It's especially difficult in social networks because the audience is so fickle.

    Like I say, I may be completely off base but I need to think this through a bit more, I don't think it's as simple as treating the audience well. That isn't a long-term sustainable solution.
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    Fraser,
    You're wrong about this one.
    Potential promise? Isn't the potential promise dependent on the audience? Isn't the audience what provides that potential promise?

    Friendster had no Ryan Seacrest. They did not treat the audience right (according to Danah and others). On the other hand MySpace is the opposite.

    The audience creates it's own potential promise. That is what gives you traction. And that's why you need Ryan. :)
    • ^
    • v
    I may be, but I also know that I struggle to articulate ideas that are still forming in my head, so I'm going to cycle on this one a little bit more. The potential promise is dependent on the audience, that's why it's different and unique for each network. Each network develops/requires it own potential promise, yet a group needs to see (and believe in) the potential promise in order to form an audience. A highschooler moving from MySpace to Facebook isn't necessarly doing so because MySpace is treating them poorly, they're doing it because they value the potential of populating Facebook more than they do the potential of MySpace. A group is a critical ingredient for developing an audience, but there needs to be something else there, and it's not just Ryan treating them right (although that's another critical ingredient). There have been, and will continue to be, networks that treat their audience well but lose it because of an alternative offering a greater potential promise. It's especially difficult in social networks because the audience is so fickle. Like I say, I may be completely off base but I need to think this through a bit more, I don't think it's as simple as treating the audience well. That isn't a long-term sustainable solution.
    • ^
    • v
    Fraser, You're wrong about this one. Potential promise? Isn't the potential promise dependent on the audience? Isn't the audience what provides that potential promise? Friendster had no Ryan Seacrest. They did not treat the audience right (according to Danah and others). On the other hand MySpace is the opposite. The audience creates it's own potential promise. That is what gives you traction. And that's why you need Ryan. :)
 
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