Yelp has publicly admitted it is in trouble. Twitter is currently hunting for a new CEO and there are constant rumors they will be acquired. Is social media dead? The simple answer is no, social media will continue to live on. What the industry is seeing is the sun setting on Social Media 1.0 and the dawn of Social Media 2.0.
When individuals look back on the dawn of social media that was trailblazed by Yelp and Twitter, there is no question that they will be remembered as the founders of social media. These companies created the vocabulary and the need. Everything from "tweets" to "selfies" the vocabulary that society knows today can be attributed to these social media founders. The question which arises today is what do these social media founders do as the industry they helped to create grows beyond them.
This trend is not unprecedented. If one looks back to the growth of the search engine industry, the same patterns emerged. During the booming heyday of search engines, the Internet was littered with numerous competing search engines. From Yahoo! to Webcrawler and Ask Jeeves, everyone was starting up a search engine to capitalize on the growth of the Internet.
Eventually, however, the gangbuster growth in this industry matured and plateaued. While most search engine companies were comfortable with their business models and their technologies, it was an industry that was prime for disruption, something which is constant in Silicon Valley. That disruption was, of course, brought about by Google and its new technology. It made the dominant players of the day irrelevant and consigned a number of them to the dusty pages of search engine history. The social media industry is experiencing a similar trajectory if one looks at the fundamentals.
These fundamentals include:
1. Changing Customer Experience Requirements:
Today's social media users are no longer are comfortable with merely a listing that enables them to publicize their opinions and ideas. They want the next generation of the social media experience. What does this mean? Simply put, today's social media users are looking for an increasingly seamless mobile experience that allows them to do anything they want without any hassles or worries.
2. Mobile First:
Today's social media users are increasingly accustomed to the ubiquity of wireless networks and cellular phones. No longer do they have to wait until they reach a desktop to respond to emails or watch their favourite webisodes. Today's social media users expect a "mobile first" approach to their customer experience, which means that they expect excellent functionality while on their mobile devices.
3. Truly Individualized And Customized:
While Yelp and Twitter may have laid the foundation for social media, today's social media users are increasingly demanding a more customized and individualized social media experience. Social media users expect an "on-demand" and "individualized" experience that have been brought about by other startups such as Uber and Munchery. As such, when social media apps such as Yelp and Twitter are making recommendations, they expect suggestions that are truly customized to their preferences and tastes, not merely based on a generic listing that has more in common with marketing segments or geographic locations than their true personal preferences.
4. More Back-end Technology and Functionality:
Big Data. Predictive analytics. In some respects, these buzzwords are driving the enhanced customer experience that today's social media users now expect at a bare minimum from all their technology interactions. While corporations are focused on new patterns determined and financially exploited from massive amounts of data analyzed with Big Data, it is actually the data analysis of individual users that will have the biggest impact on front-end customer experience.
So what does this mean for the Social Media 1.0 companies that blazed the trail? It means one of two options. Either they are relegated to the annals of social media history as the founders that couldn't adapt as new technology changed the landscape, or they manage to adapt and demonstrate that the old guard can learn new tricks. The jury is still out as to where these Social Media 1.0 companies will end up. Even a comparison of the history from the search engine industry can't tell us the outcome.
While it is true that a number of search engines have quickly faded from memory and have given their ground to the current search engine behemoth Google, there are some search engines that are continuing to fight for survival and transform themselves, such as Yahoo!. The jury remains out as to whether or not Yahoo!'s transformation will be successful. The same can be said for social media industry founders Yelp and Twitter.
As much as Silicon Valley believes that it is quick to adapt and change, the reality is that Silicon Valley and the startups and companies that inhabit it all fall to the same cycle that every non-Silicon Valley startup or company falls into for one simple reason: Startups and companies are run by humans. We have seen it time and again in the tech industry, from the rise and fall of Research In Motion to Compaq to Silicon Graphics. The sad reality with many of these firms is that their human leadership failed to see that the industry they created was changing around them and they were being laughed out of the room as ancient dinosaurs.
Hope isn't lost though. There have been success stories of complete reinventions, where ailing companies were able to successfully turn around. Apple is the prime example, but there are many other startups and corporations that have successfully charted turnarounds of varying degrees. Let us hope the same can be said of the Social Media 1.0 companies that are now being pushed aside by the new Social Media 2.0 companies.
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