Monthly Archives: January, 2013

Want to Hedge Your Bets? Invest in Social. (Pt.2)

In part one of this series we looked at social media as a means of hedging your traditional advertising “bet”, using it as a tool to protect against potential losses brought about by unprofitable, outdated, traditional advertising methods. While it can certainly be used in a microenvironment like a small business’ marketing campaign, social can also act as a traditional hedge.

Sure investing in social startups, or in this case, launching your own, is far from a traditional investment vehicle, but it could very well be the safest investment you have ever made. Everybody has some “great” idea for a new website that will change the world and allow them to retire early somewhere on the Italian coast, and while the odds of you becoming the next Mark Zuckerberg are more than his net worth to one, that doesn’t mean you can’t generate a decent return on your money.

You’re a mid-level executive, you bring home $100,000 a year, of which you place 5% in an ultraconservative 401K, save 10% for a rainy day, and invest an additional 10% in traditional vehicles, stocks, bonds, mutual funds, etc. Using 2012 as an example, which in a reality was a phenomenal year for the market, we can assume that you made 13.4% (S&P 2012 gain) on your 10,000 investment, bringing home a pretax profit of $1,340.

While that 13% return is certainly nothing to scoff at, and most (smart) investors would take that every day of the week, there is some semblance of a risk taker in all of us, and sometimes that SPDR ETF just doesn’t cut it. Fortunately for you, you just got off the phone with your broker and Direxion just unveiled 3X leveraged ETFs! That’s the risk you were looking for, it has high earning potential and because it’s regulated by an American institution it retains some degree of safety, right?
Now, let’s pretend you invest half of your yearly $10,000 into the 3X leveraged ETF, day one rolls around and unfortunately the market opens down 1%. While normally that would not be such a big deal, that 1% is really a 3% hit for your leveraged fund. The bell rings, and at the end of the day you’re only down $150 which brings you to $4,850. No big deal, the next day comes around and the markets surges 1% on a good jobs report. But wait, a 1% gain only brings you to $4,995, you’re still down $5. Unfortunately for you, since your lost 3% on $5,000 day one, day two’s bump couldn’t get you back to par since you were working with a depleted capital supply. Although this happens daily with traditional investments, you’re not a day trader, and it takes very little time for your investment’s working capital to be exhausted.

However, this is 2013, you decide to hop on the social bandwagon and put that freshman level computer science class to the test. Instead of investing $5,000 into some volatile fund or note that is based on an index that was created by an overseas investment bank, you decide to leave $9,000 in traditional vehicles and invest the remaining $1,000 in your very own social startup. You go with something niche, in this case, Fiesta Campus (www.fiestacampus.com), a photo sharing website for college students. You register the domain for $12.99 on GoDaddy, use Wix or the like to design and host your website for and additional $9.99 a month and boom you’re up and running. Of course you have to make it legal and your business formation costs you an additional $250. From there, you begin to build a user base and generate some web traffic, and since your business model is based on advertising revenue, you can’t make money without them. You market on Twitter, Facebook, and the like but you decide to expedite the process and spend your remaining $600 on advertising space in a local college newspaper. Fortunately, their print advertising is very cheap and $600 gets you a front page ad in 10,000 papers. That being said, only 75% of those are read by college students, and of those, only 5%, a total of 375 people, go to your website and become users. A week later, the flux in web traffic causes the value of your $13 domain to skyrocket, it increases in value tenfold, and thanks to GoDaddy’s free valuation tool, you realize your domain is now worth $130.

So, 6 weeks after your website went live your domain’s value has skyrocketed, but your domain is not your most valuable asset, your 375 users are. When Facebook went public, they were given a total valuation of $101 billion and had 845 million users, giving each a value of $121. Since we cannot reasonably assume that after 6 weeks your users are as valuable as Facebook’s, we’ll say that they are worth only 10% of what theirs are, $12.10 a user. If we then multiply that out 375 times and add in the $121 domain valuation, your social startup, which only cost you a $1,000, is now worth $4,658.50, quite a hefty return for a 4 month period.

The good news for your aspiring entrepreneurs, it only gets better. As you gain more and more users, they actually increase in value, as does your domain. However, once you hit a certain threshold, gain a solid user base, and hit traffic benchmarks, advertisers will be knocking down your door to place their banner ads on the side of your website, that fortunately for your wallet, boasts a very specific group of users and allows for highly targeted advertising.

Finally, let’s look at the potential downside, remember, gone are the days where starting a business took countless hours and tens of thousands of dollars in capital. While launching a social startup is by no means easy, nor are there any dividends or guarantees, it does provide a high potential, low risk investment that cannot be mimicked by traditional vehicles. What’s the absolute worst case scenario? You lose $1,000, less the $12.99 domain which will only increase in value over the long term, as relevant domain names are become increasingly scarce as startups and speculators purchase thousands a day. So, when you’re analyzing potential investments, ask yourself, what do you have to lose? Can you afford to take a $1,000 risk and give up some free time? If so, its time you reallocate your risk into something far more profitable and launch your very own social startup.

While I was forced to make a lot of educated assumptions regarding returns, pricing, and costs, social’s potential as an alternative investment, or hedge on traditional vehicles, is undeniable.

Don’t forget to subscribe via email and follow me on Twitter: @BrendanBrandt

© 2012 Brendan Brandt. All Rights Reserved.

Additional Readings:

How Much Is Each Facebook User Worth? – http://thenextweb.com/socialmedia/2012/03/31/how-much-is-each-facebook-user-worth/

Stock Market Performance By The Numbers – http://www.wyattresearch.com/article/2012-stock-market-performance-by-the-numbers/29185

Top 5 Niche Social Networks – http://computer.howstuffworks.com/internet/social-networking/information/5-niche-social-networks.htm#page=0

Advertising Rates – http://www.cavalierdaily.com/page/advertising-rates

S&P Charts

Why Social Thought Leaders Are the Most Important Part of Your Executive Team

Most of us spend a good chunk of our day online in some capacity. We’re constantly absorbing content from various sources, analyzing and building on pieces of information, and learning from thought leaders who consistently push out high quality material.  Genuine thought leaders tend to do the same. They take in new ideas, compile them, and push out an even greater idea, continuing growth and fostering the cycle. This progression, and the development of thought leaders as individual experts, is contingent on the cultivation of new ideas.

In recent years, with the evolution of social networking, this notion has been injected with steroids. Gone are the days when thought leaders attended conferences and chatted behind closed doors with peers, discussing their apparent stranglehold on relevant creative thought. I repeat, those days are gone, and if you’re management teams still think that way, walk in to their offices and fire every single one of them.

Now, successful thought leaders, especially business people in positions of power, have realized the importance of the social web in fostering ideas, developing talent, and ultimately growing their businesses. By utilizing social media, thought leaders can recruit potential employees who demonstrate a complex understanding of a specific piece of subject matter, increase the number of quality ideas they see each day, and bolster their company with innovate thought, keeping them at the forefront of their respective industries.

Here’s a brief personal example – I now work for a Fortune 50, one of the largest companies in the world and a leader in our industry. Prior to coming aboard, I ran my own, rather successful digital marketing firm, Brandt Social. Although my current company has a network of literally thousands of recruiters across the country, I was contacted by a gentleman who is now my boss, and an executive at our company. While at first, I had little desire and certainly did not intend to go work at some giant firm where my talents would go unnoticed, I quickly learned that the gentleman who reached out to me was in fact a thought leader, who clearly used social as tool to stand out amongst his peers, foster talent, and cultivate new ideas. This differentiation was a major draw in my decision to come aboard.

Unfortunately, if your organization is lacking a genuine thought leader, your time frame is finite. Many managers, claiming to be thought leaders, whether they be a business person, an online personality, or an author, have been doing just the opposite, seemingly afraid of both new ideas and the talent that sprouted them.  This oppression not only hinders conceptual progression, but can ultimately burn out and deter top talent from fully developing.

In a business setting, whether you attribute it to jealousy, lack of adaptability, or narrow-mindedness, it is undeniably toxic. When managers, usually, self-described as thought leaders, prevent new ideas from spreading, regardless of their source, they are in a word, crushing the future of your business. New ideas are the foundation of not only the new “startup” business model, but of capitalism as a whole. When ideas get suppressed by a higher-up within your organization they force them one direction, out. As in, out of your entire organization. When this happens repeatedly, more than just ideas run for the hills. Top talent, potential recruits, and cutting edge clients want nothing to do with your business, regardless of your previous success. Remember, ideas are temporary, if you cannot adapt to innovative concepts or develop new ones, your days are numbered.

 

Don’t forget to subscribe and follow on Twitter: @BrendanBrandt

 © 2012 Brendan Brandt. All Rights Reserved.

Additional Reading

Thought Leadership 2.0 – http://www.inc.com/marla-tabaka/how-to-become-a-thought-leader-online.html

True Professionals Don’t Fear Amateurs – http://sethgodin.typepad.com/seths_blog/2012/12/index.html

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2 Real World Resolutions and Their Social Applications

We’re officially one week into the New Year and resolutions are in full swing. From weight loss to dietary alterations, we all attempt, regardless of sincerity, to alter our lives for the better. Fortunately for us, these common resolutions are not only practical in the everyday, but digitally applicable and can change our online image, better our reputations, and bolster our brands.

1. Be Punctual

Everybody’s rushed, we all oversleep, and sometimes, possibly often, we run behind. That being said, timing is everything, especially when we’re talking social. In a digital world where a Tweet sent 30 seconds ago is obsolete, business owners and professionals alike must be acutely in tune with the timing of their posts.

So, when is the best time to publish your content? The short answer, weekdays around 4pm. The long answer, it varies greatly between networks and target market. If you’re shooting for the highest number of active users, Monday through Thursday 1pm to 4pm is your go to, but, if like many, you’re shooting to reach educated, employed, professionals or business owners, you’ll need to post with a bit more precision. Professionals utilize social media during the workweek, early (7am-8am), at lunch on their smartphones (11am – 12:30pm), and when they head home (4pm – 5pm). Of course this is by no means an exact science, but by remembering the importance of timing you can significantly increase the visibility of your content.

2. Consume Less

Regardless of the product; alcohol, tobacco, food, etc., many resolutions involve the practice of moderation. While consuming “too much” social content may not have proven adverse health effects, it can certainly be detrimental.

While many talk about a “work / life balance” few actually practice what they preach, and of all professions, social entrepreneurs are they absolute worst. Think about it, I mean actually think about it, how many hours a day are you active on social media? For most, 2, 3, 4 hours, or even more when taking into account mobile usage, is not uncommon. Not only does this leave little time for you to focus on other, probably more important areas of your life, family, friends, etc., but it actually inhibits your ability to differentiate between high quality, important information and the irrelevant opposite.

The people you follow and subscribe to generate a multitude of information, while not all of it is relevant or quality, much of it is. However, after being connected for hours, witnessing a constant stream of information, you begin to monitor for certain keywords or topics, usually extremely niche, that pertain to your immediate goal or problem rather than foster creative thought and enhance logic. Occasionally you may hit the jackpot and read that perfect article or blog that sparks a revelation, but far more often than not, by zoning in for hours on end and unintentionally filtering out content, you risk missing hundreds of pieces of slightly less relevant information that when compiled, could have solved your problem or helped you reach your goal in a fraction of the time. It certainly seems that the old adage holds true, less is more.

 

At the end of the day, any resolution, socially applicable or not, is more than likely a good one and is well worth attempting. I wish you all the best as you strive for personal improvement in 2013!

 

Don’t forget to subscribe to the blog and follow on Twitter: @BrendanBrandt

 © 2012 Brendan Brandt. All Rights Reserved.

Additional Reading:

Best Times To Post Social Networks (Infographic) – http://socialtimes.com/best-times-to-post-social-networks-infographic_b104584

Maybe Using Less Social Media Is The Path To Online Success – http://www.businessesgrow.com/2012/05/30/maybe-using-less-social-media-is-the-path-to-online-success/

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Want To Unleash Top Talent? Go Social.

As large, powerful corporations continue seek out and recruit young talent, much of which has grown up on the internet, they are realizing that the demands of today’s top recruits are far different than they were 10 years ago.  While dress codes, flexible work schedules, and gym memberships are easy fixes, the prospect of high level executives joining the social frontier is often a tough change, but is a must have for many top tier prospects.  That being said, leadership “going social” can be good for your business as it increases productivity, sparks collaboration, and attracts talent.

In case you didn’t know, the young recruit with a genius IQ you just hired doesn’t want to be stuck under mediocre, middle management leadership, where in their eyes there is little growth potential, and no place to showcase their talents. Many of them are impatient and the prospect of starting on the ground floor of a company, no matter how prestigious, is frustrating to them, regardless of its inevitability.

Since there is little chance you have the funds or the recruiting prowess to pull a swath of great leaders into your extremely exciting middle management positions, go social to appease the talent that is the future of your business. Doing so breaks down barriers within your organization as employees are given a forum to showcase their talents to both peers and decision makers. In turn, employee productivity increases, collaboration booms, and creativity skyrockets, all because your top young talent feels that they now have a chance to shine on a bigger stage, and you are no longer leaving them “parked” on the ground floor.

If you’re the micro-managing, control-freak of a CEO who is sitting in a stuffy office, thinking how this will open Pandora’s box, create a myriad of management issues, and let loose a floodgate of useless ideas, just remember that you probably won’t be sitting there in 3 years if you don’t adapt to change.

While social media certainly does give ALL of your employees greater exposure, it does not do away with the traditional management progressions or the previous methods of information dissemination within your company, it simply enhances collaboration, creativity, and gives the impression that entry level employees can actually influence C-level execs, regardless of the truth in that statement. 

“The illusion has become real.” – Gordon Gekko

At the end of the day the way your employees, or potential employees view you is all that really matters. Executives going social causes a slight change in perception and can transform seemingly mediocre employees into the creative, productive, superstars you want, and need them to be.

 

Don’t forget to subscribe to the blog and follow on Twitter: @brendanbrandt

 

Additional Reading:

Motivating Millennials – http://www.inc.com/eric-v-holtzclaw/motivating-millennials-take-a-cue-from-video-games.html

Harnessing Young Talent In The Age Of Impatience – http://fleishman.co.za/2011/04/harnessing-young-talent-in-the-age-of-impatience/

 © 2012 Brendan Brandt. All Rights Reserved.

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