Americans have innovated during each economic downturn in our nation’s history.  Some significant companies have spawned from the Great Depression such as Proctor and Gamble and our current movie studio system.  (There are plenty of blogs talking about this topic: Fast Company, Business Week, McKinsey.)

What we do here at Cherp is think about Twitter, and it dawned on me today that there is a perfect storm brewing that spells success for Twitter.  The economy will drive two specific activities that will help Twitter.

1. More people are going to have time on their hands and will turn to technology to help them network to find a job.  

2. Businesses will turn to new technology to find ways to acquire customers.  

Both of these will lead to greater numbers of people joining Twitter and networking, and no one else is better positioned (besides Linkedin.com, but it’s a closed network so it doesn’t foster accessibility the same way Twitter does.)  Think about it.  People refuse to give up their phones and their computers - they are essential to finding and applying for jobs, networking for interviews, marketing oneself, and in some cases, freelancing to try and pay the bills.  While they are there, it’s only natural to reach out more and more through social networks.

Additionally, companies will continue to look for new ways to market and in an economy like this they will be looking for less expensive methods than TV and Print.  Media is traditionally more expensive and requires a large distribution to provide a proper ROI.  Blogging has proven to have a phenomenal ROI for companies who do it right because it boosts SEO rankings, builds and fosters community with consumers, and provides a constant voice for the company in it’s respective market - and it does so inexpensively.  Twitter continues to show the potential to be more effective in some ways than blogging because it harnesses the viral loop methods of social networks better than blogs do.

Twitter has the momentum, it has the openness, it’s searchable, it’s easy, and the buzz just keeps growing for Twitter.

Every so often a new technology comes along and fascinates and excites businesses and consumers alike. Previously, e-commerce won our hearts. Then we all fell for search engines, and the world wide web was redefined. Now, that new technology is social networking and it’s an exciting place to be. New technology sprouts each week, creating interesting niche networking opportunities for anything you can think of. The world is becoming connected, and businesses are catching on this time a little earlier than they did with e-commerce and search engines.

So what’s the problem? These people are not built to be early adopters. Corporate America, listen up - stop creating your own social networks. You are missing the point entirely, and it’s going to create a backlash that could harm the real potential of social networking. Sears, just because you partnered with MTV, you are not suddenly cool and creating a stand alone social network around back-to-school shopping just isn’t the right thing to do. Let me explain what you are doing wrong, and why.

There are many social networks out there that have become a part of people’s lives. These web based networks are breaking down barriers and connecting people in ways that weren’t previously imaginable. With all this wonderful connectedness, it’s completely confusing why companies of any size would think that they had a product or corporate brand that was SO fascinating as to compete with the likes of Facebook and Myspace. Besides being blindly arrogant to the point of being comical, why does this matter? Because, the value in social media is creating networks and connecting people - not using disparate social networks to separate people. One of two things is going to occur. Either the site will be wildly successful and build a community of like minded people who worship that particular brand and reduce their interactions on other social networks, OR, an extremely small number of people will join your social network and your marketing team will be forced to say that “social media marketing” didn’t work for your company. Which sadly, will not be true at all.

Think about the missed opportunity when a company decides to forgo participation in the greater social community to instead create their own closed network.
1. They are forcing customers to divide their time among networks. (Bad idea)
2. Consumers who choose to participate in the network are connecting with other people already passionate about the product or brand, with no ability to spread the network virally among their other friends online who might not know about the brand.

They lose the benefit of network effects generated by being able to connect to various people with different interests all over the world. These companies who start their own social networks are saying, “I’m happy just serving our existing customers.” It’s terrible, and it’s a total misuse of the technology.

What should they be doing?

Build on your loyal fanbase within existing networks and social media sites to better leverage the network effects of these larger communities. Build affinity groups within Facebook and Myspace, use Twitter to build a network virally, start or join a group on Linkedin…there are so many different ways to creatively use social networking to BUILD a network that will provide much better results than creating your own closed network. FUJIFILM cameras wouldn’t decide to start their own tv channel because tv advertising was all the rage, so it’s not obvious to me why companies like Fuji are creating their own separate social networks because that’s the hottest new technology to hit the business magazine rack.

Can you list some examples of large brands/companies that ARE doing social media well?

Part of the magic of Twitter is discovery. Being an open social network, I’m able to find people I would never otherwise be able to connect with and follow them. If I’m lucky, they follow me back - and in that brief moment Twitter makes me feel like a kid who just made a new friend. I’ve met all kinds of great people through Twitter, and the numbers keep adding up.

But here is the thing….

Why don’t you make recommendations?

Seriously, take the advice of Jonathan at WorkHabit and tag tweets, then based on tweet tags give “follow” recommendations. In fact, just liberally borrow from Last.fm because their whole “neighbor” idea is pretty awesome. Sure, I can search for people - but why not encourage connection by having Twitter play matchmaker.

Monetization option: Charge for this feature. Or add it to a sweet of cool features for $3 month. I would probably pay $9 every quarter for Twitter to make friend recommendations and a few other things like alerts (sorry www.tweetbeep.com) and stats.

Thanks for listening.

Matt