Business tunes into grassroots communitySXSW Session: Going from customers to value creators

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I'm just back from SXSW, where I was reminded that there are still a few people out there who are thinking about the Internet as a potential business opportunity rather than as a chance to reinvent democracy.

At the panel I was on -- Remixing Business for a Convergent World -- it seemed that what is really converging is how both business folks and political hacks are looking at the Net. Let's take, for example, the question of how to make strategic use of blogs -- a question that my fellow-panelist, Robert Scoble, addresses in his recent book Naked Conversations.

Thanks to blogs, businesses can no longer afford to ignore even their smallest customers. Traditional blue-chips are starting to recognize that their next p.r. crisis could be precipitated by a cranky shareholder or dissatisfied customer who blogs about the company. As for the latest generation of web start-ups -- sites like Squidoo, Frappr, or LinkedIn -- they're not only sensitive to customer perceptions: their entire business models are based on user (i.e. customer) contributed value.

Once you start to see customers are value creators, rather than value consumers, a lot of business truths get turned upside-down. Take, for example, the idea that businesses are primarily accountable to their boards or shareholders. Does anyone out there think that the success of del.icio.us or Flickr depends more on Yahoo shareholders than on the users who are contributing bookmarks, photos, and software plug-ins?

If businesses find themselves suddenly accountable to their users, that kind of accountability is old news to both government and civil society organizations. Governments have always been primarily (if imperfectly) accountable to citizen-voters, and civil society organizations (whether community service groups or political advocacy organizations) have always been primarily accountable to their members and donors.

The net result is that it's business that now needs to learn from civic and public organizations about how to engage at the grassroots level. It's not like public and nonprofit organizations have all the answers -- great examples of effective two-way member/voter engagement online are still rarer than the many examples of organizations that are still in "broadcast" mode -- but at least there's a decade of effort to look at.

For those of us who've been thinking about online democracy and grassroots engagement for something like that long, the rise in business interest should come as (mostly) good news. Sure, there's more competition for public attention: efforts at getting voters to participate in policy discussion now have to compete with businesses offering free ipods in return for customer feedback.

But there's also a rapidly expanding toolkit for grassroots community-building. Tools like Squidoo, Flickr, and del.icio.us offer entirely new ways of involving members and encouraging members to interact with one another. Just as important, the private sector's growing embrace of customer "community" may help to build a broader culture of pervasive engagement.

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