My Take On Social Media Tools For Influence

August 4th, 2010

Today I would like to offer my views on several social media tools. They are:

  • Peer Index
  • Klout
  • Quora
  • Yahoo! Answers
  • Facebook Questions

When I woke up this morning and got online, I went to Google Buzz! and found this Youtube video from the vernerable Robert Scoble, in which he interviewed the founder of a new Twitter social influence tool, Peer Index. Basically, Peer Index goes one level beyond what Klout does; instead of just ranking people as influencers, curators, pundits, etc., it goes one level beyond, and divides people into vertical groups, and the identifying the groups in which they are influential. Just to give you an idea of how it works, here is my profile on Peer Index.

Partway through the video, I got a little surprised and my ego puffed up a bit when the China economy and biz section was brought up and I was mentioned. Always thankful for nice little mentions!

This looks like quite an improvement over Klout because of the finer granularity than Klout. I have been disappointed in Klout lately because they don’t seem to have kept their index updated. Give you an example: Here is my profile on Klout; notice how my tagline hasn’t been updated compared to my Twitter page.

For this reason, I much prefer Peer Index to Klout.

Another area I have been interested in are online questions forums; these really started with Naver in Korea, which has the predominant search engine in Korea. At one time, Naver marketed itself as the leading human-powered search engine; it relied on human vertical sector experts to answer questions. Eventually, some of these people first became experts in their field and became well-known first on the Internet, then on TV and through society. A few even achieved fame and riches through Naver.

One of the interesting side effects of this was that when people become well-known for the right reasons, they want to use their real names. Naver enabled this to happen.

Yahoo! noticed the success of this, and created Yahoo! Answers , which was largely a copy of the Naver model. Since it did not have the rigorous enforcement, policing and feedback which Naver did though, the quality of the questions and answers quickly went down in quality, with the result that the audience which used it also went down.

A recent variation on this has been Quora. This is a well designed question and answer model, which has good design and a good clean interface, and is heavily policed by editors. I tried it out for most of July and generally like it, but I found the editors too intrusive in the way they tried to edit questions. The community which is there is heavily slanted to ex-Facebook people, and the venture capital community. For a while I found this amusing, but after two weeks I found it boring, since I found both communities to be navel-gazers. As a side-point, I found many of the editors to be either Taiwanese who were deep-green pro-independence folk, or Indian. (Not that I care, but it is interesting how sub-communities shown through.)

For me, the straw broke when I asked a question in Chinese: 能用中文发问吗？(Translation: Can I ask questions in Chinese?) My motivation in asking this question was to engage some lively discussions in Chinese, since there is a significant number of Chinese on Quora. This question was quickly deleted by one of the Quora editors, and I was told to send an email to feedback at quora dot com. This was too much, and told me that their rules were too inflexible to make it a truly global Q&A forum, and I had had enough of the ex-FB and VC community, so I left and haven’t been back.

Facebook Questions is now undergoing closed testing; I expect this to be much better than Quora because it will associate people using their real names with their FB identities. For advertisers, this will be a very powerful tool because it will identify who really knows their stuff, and it should quickly replace Quora because of Facebook’s huge user base. In my opinion, Quora is too little too late, and their community is too narrow, and their editors’ overzealousness will prevent it from growing significantly.

After seeing Peer Index and the Q&A portals, I have decided that the Peer Index approach is much better. When people go to portals, they want to strut their stuff and show off, or of that doesn’t work, they just leave. In my own case, I like it much better when people can build their crowds based on their tweets, and you can build and lose followers according to Twitter. This is why I like Twitter and Peer Index much better than any of the Q&A portals.

I hope that Peer Index represents the trend of the future so that we get better quality as well as quantitative research when looking for influencers and knowledge experts on Twitter and the Internet.

Understanding Trial Spots

October 21st, 2008

If there is one thing which most western companies coming into China miss out on is the idea of “trial spots”, or as they are called in Chinese 试点。

So what is it? Basically, it’s a city, place, province or region which is used to try out something experimental which has not been tried before. When China first opened up, Shenzhen was a trial spot for opening up the economy to foreign manufacturing investment. When the experiment succeeded, it was pushed out to the other parts of China. Shanghai and Beijing were opened as tier one cities to foreign companies and employers, mostly in the service sector. When these experiments worked, the opening up gradually started. In most cases, the trial spots were selected by the central, provincial or municipal governments.

Now, there is another little secret. Large SOEs (state-owned enterprises) also often have their own trial spots. Most of the time, these are used to put some of the rising senior-level managers in to try new management practices. They are usually given a city, and a long leash, and are encouraged to try new ways of management. Often these managers are people who have made it to a certain level in a state-owned enterprise, but will not or cannot rise higher because they are somewhat non-conformist, and shall we say, less interested in politics. (Remember that in SOEs, the party also has a say in the selection of candidates for senior positions.)

Frequently, the Chinese way of handling these non-conformists is to give them a “trial spot” where they can experiment in a city or provincial division on their own. If something goes wrong with their experiment, then the damage is limited to their immediate market. If, on the other hand, the experiment was successful and includes practices which can be used on a larger scale, then that person may be promoted to a higher position with greater responsibility. This is how the current leadership of China has been groomed, just to cite an example.

The interesting thing is that many western companies, even consultants, are completely unaware of these practices. They look at their choice of investment areas in western terms, which usually means that which is clear, and out there, in the open.

They don’t study the people.

Instead, they should ask where the different “trial spots” are, and the backgrounds of the people they are dealing with. The right questions to ask for SOEs are:

  • “How did this person get to this position?”
  • “What is he trying to do?”
  • “How is he different?”
  • “What do his employees think of him?”
  • “What are his goals and his definition of success?”

If it sounds like questions an intelligence agency would ask when examining the new leadership of a country, then it does because it is just like that. I call this “due diligence with Chinese characteristics”.

And how do you get this information? I find the best way is walk in and ask (In Chinese, of course. Speak English and you only get the official line.)

For the most part, you will never find these people in Beijing or Shanghai unless they have been very successful. These are two highly conformist politically-charged cities, and the only way they make it to these cities is if they are in very senior positions, and their views have been vindicated.

Generally speaking, Chinese, even including the party, are more tolerant of non-conformists. Just don’t look for them in Beijing and Shanghai. Deng Xiaoping, the architect of China’s reforms, was for many years considered a non-conformist and was punished repeatedly for his views. Eventually, his policies became the mainstream.

So, how will the recent economic problems affect things? Basically, we are going through the collapse of an old world order, and nothing new to replace it has come up yet. The Chinese government, the party and Chinese SOEs will be looking for answers on what comes next to restore order, growth and stability. After all, this is what Chinese social stability depends on.

For Chinese government and party officials, it will be a good time to be something of a maverick. But these mavericks will only survive and prosper if they can come up with the right answers to some very tough questions.

Chinese Economy: Early Signs of Rapid Deceleration

July 23rd, 2008

Some signs point to a rapid deceleration of the Chinese economy:

The whole idea of an urgent politburo meeting just three weeks before the Beijing Olympics is a strong indicator of how serious the ruling levels of the Chinese government see this situation and would, in my opinion, be an ominous sign.

All of the signs point to an economy which is rapidly deflating, following on the falling performance of the Shanghai stock exchange, which has fallen more than 50% in the first half of the year. A lot of money which people thought they had made, and did not think of converting into cash thinking that it would go higher, is no longer there.

In China, this is always a warning sign of potential social instability. It also explains a lot about why the Chinese government has introduced new licensing regulations for online video and other communications means where people can communicate quickly, spreading views contrary to the official line, and events can quickly spin out of control.

If the Chinese economy deteriorates, as signs suggest, then it would be safe to say the government controls would tighten further. This would especially be the case in areas where foreign investment capital has gone into sensitive media sectors, which is always viewed with some degree of suspicion by the Chinese government.

How Chinese Society Is Changing

June 21st, 2008

The west never seem to tire of telling the Chinese, especially Chinese government, about how China should become a more open society, and the Chinese never tire of telling the west to shut up and stop interfering in China’s internal affairs.

The great irony is that for the most part, both sides agree on one thing: that China should become more open. It’s just that many westerners think that they should set a timetable which the Chinese should march to, and the Chinese believe that they should make the changes according to their own internal considerations. I believe that by publicly criticizing the Chinese government and policy, many well-intentioned western critics (and some not so well-intentioned), actually slow down the pace of China’s opening up because if the Chinese government and society changed more quickly, they would be seen as bowing to western pressure. That is something no Chinese government can afford to seen doing.

This is the core reason why I have so little time for most western critics of Chinese government and Chinese social reforms. At the end of the day, the Chinese government and people will have to proceed at a pace they are most comfortable with.

Some say that this is a naive approach which favors the government since, after all, they are in power. I don’t agree with this view. Thirty years of reforms have unleashed social forces which not even the Chinese government can hope to control and completely contain.

One interesting story is that of Fan Paopao, the teacher who ran away from his classroom, thinking first of his own personal safety, ahead of those of his students. Then, he wrote about it in his blog. This week, he was fired from his school, and has now become the subject of widespread ridicule.

But the true significance of the story is that Fan Meizhong is alive, and can freely speak and defend his actions and views in China. If he had had the temerity to do this 40 years ago during the Cultural Revolution, or even 20 years ago, there is a good chance that he would have been publicly denounced for the very least, and maybe have even been killed.

But he has not, and continues to defend his actions on his blog.

China has changed a lot.

It is becoming a much more open society, where different views can be heard. There are borders where the government will not countenance criticism, but as the society changes, those areas are becoming fewer and smaller. The society is becoming more and more what was called in Taiwan 多元化 or what is known in China as 多角化. This means that there are more different groups and subgroups, some of which will evolve their own subcultures within Chinese society.

Mao was never comfortable with this approach, he wanted society to be the same, right down to the dress code, not thinking and not criticizing, just obedient to him and his apparatus. Those days are gone. Like Fan Paopao, people are much more individualistic, and are not afraid to speak their minds. And they are willing to stand up for their views and take the consequences.

Without a doubt, there are groups and individuals in the Chinese government who are not comfortable with some of the changes this is leading to, but they cannot turn back the clock of reform and opening up. There may be many admirers of Mao Zedong in China, but you would be hard-pressed to find anyone who would want to have another Cultural Revolution. (In the Chinese government’s official version of history, the Cultural Revolution is referred to as a “national disaster”.)

I think of the past eight years in the US as being much like America’s version of the Cultural Revolution. After 9/11, this administration tried to push its own agenda on the American people and on the rest of the world. Their interpretation was that those who attacked New York on that day hated America for its freedoms, and that the world is divided sharply between good and evil, with no room for anything in between. This meant that there must be a confrontational struggle which will end in final victory for good and defeat for evil. Ironically, in order to defend freedom, torture, the suspension of habeas corpus and other means which most Americans abhor had to be used.

Most Americans don’t subscribe to this view any longer. We’ll find out in November.

So maybe looking past all the political and social rhetoric, the west, America and China are not that different from each other after all? The challenge is that these changes are evolving in China, and do not make the western press because they are not “news”. This is why many western critics are hopeless ignorant. They don’t understand the social context of China, choosing instead to focus media attention on single issues.

In China, most of the most important things which happen do not make news, but in the aggregate, they are indeed revolutionary in scope.

If the west and China understood each other better and looked at each other in these terms, maybe there would be a lot less misunderstanding.

What Tibet and Carrefour Can Teach Us About the Chinese Internet

May 9th, 2008

When the western media and some outside observers talk about “Angry China”, they really miss out on the real story, and even the real questions which need to be asked. For instance, how do very large groups of people, who at least on the surface, have nothing to do with each other, organize in large numbers so quickly in a society which many westerners see as authoritarian? Are they government-led or influenced, or do they do it themselves? How do they come to believe some of the wild rumors which come up, such as for instance, the belief that Carrefour sends a portion of its earnings to support the Dalai Lama and Tibet independence, and are seemingly oblivious to the fact that any large company would like to keep as much of its earnings for itself?

There is a very simple answer to all this: a large part of the organization is done on the Internet in China, specifically on BBSes. While the BBS (bulletin board system) is something outdated and antiquated in the US Internet, it has been a very important part of the Chinese Internet, and I would argue, it is growing and becoming more influential. For the Chinese government, it is a headache because in spite of Chinese government regulations, it is largely unregulated. For western corporations it is a good place to gather information but is useless for advertising, but for many Chinese it is the most important part of the Internet (along with online gaming and their IM client, which is most likely to be QQ or MSN Instant Messenger depending on their age and demographics).

Don’t believe me? Go to your nearest Chinese Internet cafe and watch what people are doing.

Most westerners who come into the China Internet market have no idea of its power and influence, and instead think that the Chinese Internet is largely the same as the US market, but it isn’t. The Chinese government doesn’t really like BBSes because it really is free (as in free speech), and is the breeding ground for all kinds of weird stuff. And while it is important for gathering buzz on products (as CIC, based in Shanghai, does) for corporations, nobody has really been able to monetize it. And, western journalists fail to monitor it, which is why they miss on so many big stories, and end up giving credit to some sinister Chinese government policies. ( I guess it’s kind of flattering for the Chinese government to be given credit for something when most Chinese know that it isn’t that powerful.)

Isn’t it amazing that such a huge and important part of free speech in China has been entirely missed? Fortunately, Tom Melcher’s new blog Live from Beijing! has a very good introductory article to BBSes (h/t to Andrew Lih). I got something of an introduction to the BBS in 1998, shortly after Sina was formed from the merger of SRS and Sinanet. One of the first web applications created by Wang Zhidong was a simple BBS which he demoed to me in the summer of that year. It really took off in popularity with the US’s accidental bombing of the Chinese embassy in Belgrade in April 1999 when millions of angry Chinese hit the Sina news forum. Please don’t think of the Strong Nation forum on the People’s Daily site as being at all representative of Chinese BBSes; it is official and closely monitored for content. The interesting BBSes are all unofficial or semi-official.

Most of the angry Chinese in China, or fenqing, are organized on the BBSes, where they gather and shoot the breeze. These people have time on their hands, and play games, spend time in QQ, and gossip on the BBSes of their choice at the moment. They spend almost no time on what we would call the official Internet, except going to get news on Sina, Sohu and Netease. It is very hard to reach them with advertising.

Now, let’s talk about their persona. For the most part, they:

  • They distrust the official media and do not buy magazines, and get as much information as they can from unofficial sources, such as BBSes. They only go to the official media for some sports information and major news information.
  • They trust unofficial news more than news which comes from official sources.
  • They are the perfect audience for spreading rumors, because they can be quickly organized by anonymous leaders, or “honeybees” as Tom Melcher calls them in his article.
  • When organized, they can be huge, in the millions, and they can move like a swarm.

In simple terms, the characteristics of this unofficial crowd are:

  • Chinese official government influence is very limited
  • They are mostly self-organized
  • The numbers are in the millions
  • They move extremely fast
  • They disappear just as fast as they appeared
  • They are almost always anonymous and do not use their real names, preferring instead to use their own handles

In simple terms, they are an issue-focused flash mob. For corporations, they are:

  • Not susceptible to traditional PR methods since you are dealing with an anonymous group
  • Very tightly focused around one issue
  • Move much faster than corporations and their decision-making apparatus is diversified,
  • Do not trust/ believe in information from any government, including Chinese

My estimate is that more than 60% of non-IM traffic in China is to these unofficial BBSes, and that number is growing.

When it comes to advertising, most adspend hits that remaining 40% of the official and semi-official Internet, without reaching where many people are. CIC acts as the eyes and ears of corporations, but corporations have not been able to do anything yet with that information and are still reliant on mainstream advertising approaches for both online and offline which are largely out of date. This is the background for my article on why agencies need a new approach to online marketing in China.

So, BBSes are the real social media marketing tool, and as usual, the Chinese are ahead of everyone else, but just haven’t figured out that part themselves. While the west talks about social media and Web 2.0, China has had a version of it for the past ten years. It may not be pretty, but it works.

It’s just that vast majority of outsiders haven’t figured it out yet.

Trouble in the West and Yuan Appreciation

March 24th, 2008

When I talk about the west in the title, I’m referring to the western part of China.

A great deal of thought and ink and pixels have been devoted to how the recent violence in the western part of China has affected the country’s image in the runup to the Beijing 2008 Olympics. I’m not going to talk about that because I have nothing new to add to that conversation.

Instead, I’m going to talk about how those events are likely to affect Chinese government fiscal and monetary policy.

These recent events have shown that the income gap between Han Chinese and Tibetans is growing, and that there are significant numbers of Tibetan youth who do not see a bright future for themselves. They are perfect fodder for unrest. Beijing has tried to mollify things by moving significant numbers of Han Chinese into Tibetan areas to start small businesses but, for the most part, Tibetans are still deeply religious, and many prefer a nomadic lifestyle to living in cities where they cannot find work.

This is the trouble with an urbanization policy: it works fine if people are employed. If they are not employed, there are all kinds of social problems.

The biggest problem is that there is no Tibetan merchant class as there is among Han Chinese.

The central focal point of Chinese social policy is low unemployment at all costs, even if the businesses are not profitable. It is better to have people working in a loss-making enterprise than for them not to have a job at all and wandering the streets.

Part of the rationale for the violence was to scare Han Chinese out of the Tibetan regions. Many Han Chinese families may prefer to move back to their places of origin; the Chinese government may offer economic incentives for them to stay.

Faced with this situation, the Chinese government is unlikely to let the yuan rise significantly more this year. If asked to choose between which is more dangerous, social unrest in China, or increasing pressure from the European Union and the US over letting the yuan appreciate, I’m sure that the residents of Zhongnanhai would say that the former is the threat they fear the most, not the latter.

For them, it’s much more important to keep people working at their jobs in China.

A Quick Look at 2008 and China

January 1st, 2008

Is there any way at all that 2008 will not be the year of the Chinese Olympics, and by extension, China? Will we be stuck between the rise of China narrative and the sourness to the point of completely puckering up of the US media and to a lesser extent European media re China?

I say yes.

The coverage of China by the major media has been completely unsatisfactory; it has not been informative and has instead driven their own editorial agenda. That old editorial agenda no longer works because it does not reflect the ground reality of China. It does make sense though to take a closer look at China’s development outside of just the tier one cities. Let’s hope that this begins to happen.

In the big picture though, the Chinese Olympics are not the biggest story. There are so many interesting things and opportunities happening on the Internet. I’m surprised that so many people miss them, such as the fall of Facebook even though their numbers continue to increase, and the failure of social networks to monetize their traffic because they have chosen to side with advertisers against their own user base.

Facebook is like a rocket which continues to coast upwards even though its engine has cut off; momentum is carrying it upward. But eventually gravity will win…

We are in the early stages of growth for the Internet, I believe that increasingly new Internet startups will be founded by business people, not technology people. On the PC platform, the technology is mature; it is the business models which aren’t working. Now, the smart technology people are switching their focus to the mobile Internet.

For smart business people who want to disrupt the current business models, 2008 will be a banner year. For more predictions, take a close look at the predictions of Mark Anderson and Fred Wilson. Part of the reason new and viable business models have grown relatively slowly on the Internet is because the business side has been driven by technology people who don’t understand business and how to make deals, and the business people have been thinking too much in terms of the large corporate businesses which are now being disrupted by the Internet.

It is time for a new breed of entrepreneurs who understand technology, and are not behoven to traditional businesses. In China, this has already happened in gaming with Timothy Chen Tianqiao of Shanda and Shi Yuzhu of Giant Interactive. Ironically, it has not happened as quickly in the west.

It’s time to expand the base.

On the web application side, it is getting easier and easier to develop robust applications. Twitter, a very successful social application was developed with Ruby on Rails, a full stack web application framework which was released by 37 Signals, a Chicago-based design firm.

The significance of this is that web applications can now be designed by designers who are more focused on user experience than software engineers who are focused on features (many of which are of dubious value). One thing I have noticed among many Ruby on Rails deployments: narrower focus. Instead of trying to do everything, these applications focus on doing a few tasks very well. Good examples are the online project management tools put out by 37 Signals and which I use to manage my business.

Wouldn’t it be great if these web applications were made available to a Chinese audience?

As for myself, I’m sharing my feeds on Google Reader. You can find them through Google Talk and Gmail by contacting me. You can reach me at paul dot denlinger [at] gmail dot com.

I’d like to see yours too; let’s start sharing in 2008!

Are Chinese Corporate Earnings Inflated?

November 2nd, 2007

In an article for the Oct. 29 issue of Caijing, writer Xu Shanda (许善达) claims that Chinese corporate earnings are inflated. In the Chinese language article, Xu claims that there is an earnings bubble. The article summary says this (my translation):

The government should no longer listen to Chinese enterprises’ requests to turn their costs to social costs. It can no longer listen to their efforts to infringe on the rights of all citizens to suit only their own unreasonable and illegal corporate earnings requirements. In real terms, this means that the government must step up its own efforts to build a social welfare system, an environmental welfare system, strengthen legal enforcement, and at the same time, create a new market system for the trading of resources so that a pricing system which more realistically reflects market realities can take root.

In the article, Xu claims that corporate earnings for many Chinese companies have continued to go up because they have not had to pay for social security and environmental costs. With such low operating costs, of course they would have high corporate earnings.

Now here is where it gets interesting. Xu Shanda is not an outsider; he serves as an independent director of ICBC, one of China’s state-owned banks, and was the former vice director of the National Tax Bureau.

In effect, Xu is arguing for a social security system to protect the poor, and for increased taxes to clean up the environment during China’s high-growth phase. High-growth was a top priority during the last years of Deng Xiaoping and during the Jiang Zemin years. In contrast, the administration of Hu Jintao is recognizing the high costs of the environmental damage created by reckless growth. The person now leading the charge re environmental affairs is Wen Jiabao, who is reviewing many major engineering projects.

For many Europeans, Xu sounds like a social democrat, or what is called in US politics, a liberal.As a an American, it is very ironic to see a Chinese government official argue for the kinds of things which the Bush administration is so keen on dismantling in the US, even though US public opinion largely believes that there are serious environmental issues which need to be addressed.

For the Chinese government, the current situation is about finding the right balancing point for China. If China adopts a social welfare system like western Europe’s, they are afraid that costs will go up and so will unemployment. Chinese goods will be less competitive on the global market. However, if they do not raise them, the destruction of the environment in China will continue, and many businesses will not be held accountable. It would become like the US, where the system favors large corporations while offering lip service to the little guy. (It was not always this way in the US, but it has markedly changed because of recent US changes to the US Supreme Court and recent court rulings.)

There are early signs that the Hu administration is taking steps to bring market realities to resource pricing; yesterday the Chinese government raised oil prices by nearly 10%.

So, there is strong internal pressure in China to make corporations more accountable, just while the US is privatizing more public sector services and is making them less accountable.

For those in the US who believe that privatization is the answer to all of the country’s problems, they would do well to come to China and look at some of the effects. A lot of this damage is done by a combination of corruption, cronyism and privatization.

Ironic, isn’t it?

UPDATEIf you are interested in how the Bush administration’s proposed tort reform would largely take away from US citizens the right to sue corporations for environmental and product violations, please visit the Wikipedia entry on tort reforms. This is the kind of legislation China needs to curb corporate excesses, although the Chinese are very conscious that they want to limit misuses and abuses of the system as have occurred in the US. What the Bush administration is proposing though, is not a reform, but more or less turning the clock back and making consumers rely on the “goodwill” of large corporations to protect them. Since I am not an attorney, this may be an area Dan Harris, publisher of China Law Blog, may want to shed some light.

Richard Spencer also has an article which suggests that the western interest in China’s conditions and policies may be more tied to China’s rise as an economic power than to a true interest in those issues.

Hmmm…That’s good food for thought.