Last week, I had the pleasure of listening to Lon Safko, co-author of the Social Media Bible speak to a group of counselors from SCORE and the SBDC as a prelude to Greater Phoenix SCORE’s Social Media Event this January 14th and 15th.
During his presentation, Lon kept emphasizing the reasons, excellent ones BTW, that businesses need to pay attention to and utilize social media. And repeatedly he punctuated his message with a continuing theme…Oh Yes! It’s FREE!
But is it?
While access to these new social media platforms is free or in the case of some emerging premium products relatively inexpensive, let’s look at some of the costs.
FUNDING and Economic costs
Based on reports from Tech Crunch, the four most prominent platforms in their categories (Twitter, Facebook, LinkedIn, and Google) raised over $1 Billion in equity funding to get to where they are today.
- Twitter is free – $160M in funding to date according to this time line from TechCrunch
- Facebook is free – $716M in in funding to date according to this time line from TechCrunch. With over 350 MILLION active users worldwide (if you are a demographer an interesting side note is that if Facebook users were a nation, they would now have exceeded the population of the United States of America making the Facebook Nation the 3rd largest country in the world!)
- LinkedIn is free (although new premium features carry a price) – $103M in funding to date according to this time line from Tech Crunch. With more than 45 million users representing 150 industries around the world, LinkedIn is a fast-growing professional networking site that allows members to create business contacts, search for jobs, and find potential clients.
- Google Search and many applications are free. The search engine activity has been estimated at over 2 Billion searches each day with a related estimate of 300 Million unique users daily. Google received $25.1M in funding according to this time line from TechCrunch
And that does not take into account that these are simply mediums across which information is shared. The platforms have no value without content creation – think people sharing information – and that takes time. If we estimate that a combined 1 Billion visitors spent just 1 hour on the platforms entering/sharing their content each year at MINIMUM wage of $7.25/hour – content creation across the platforms would cost $7.25 Billion dollars – and that is for only 1 hour per year at minimum wage! Now think about what your time is worth? How many hours have you actually spent?
There is no such thing as a free lunch.
We’ve all heard it. Heaven knows who said first. “There is no such thing as a free lunch.” I’ll attribute this one to my Grandma, she may not have been the first to say it – but she was the first to say it to me. Everything has a cost, whether in time, money, or the opportunity cost (what you could have gotten if you used your time and money in a different way.) Until you truly understand costs, you can never calculate value since cost is a key component of the value equation.
Value = Benefit – Cost
The concept of a wanting a free lunch is pervasive today across our entrepreneurial and business communities – not to mention our society as a whole. Whether the benefit is accurate information provided by media outlets, advice from thought leaders, time with business advisors, or creative content like books, films and movies – there is a growing perception that in the new information age, knowledge and content is free. But if we continue along this line of thinking, we may begin to find it is just the opposite.
No need to buy the cow if you already have the milk.
This was another favorite “Grandma Quote.” For those of you who are smirking, no this post is not going down THAT avenue. This maxim took on an entirely new meaning when I moved from a salaried position in corporate America to the role of an entrepreneur whose livelihood and business was based on providing valuable information for a fee.
In the early years of my business, I was actively networking and sharing ideas. Soon my calendar was filled with invitations for FREE coffee, FREE Lunches, FREE dinners where a new business friend wanted to ‘pick my brain’ or ‘share’ an idea. But more often than not, all that came out of the exchange was a few more inches around my waistline. Over those meet ups, I would answer their questions, offer contacts, help create solutions. And more often that not, my potential new business evaporated. They had gotten what they needed from me over lunch while all I got was a hamburger and a diet coke!
Then Grandpa, an attorney, came to my rescue with some simple advice. “The first exploratory hour is FREE, after that you go on the clock. Your time and knowledge IS your business. If you do not value it, no one else will either.”
I’ve gotten better over the years. (Although, I have to admit that I still give away “gallons of milk” because I often share a lot of ideas in that first hour and enjoy connecting with new people or volunteering within organizations that help entrepreneurs.) But now, when someone asks to come back to the table for second, third or fourth helpings, I am a bit wiser about knowing when to graciously decline those invitations to just get together and ‘chat’ over lunch.
For as Grandpa helped me understand… if you can’t find a way to run a profitable business, the business won’t be around to help others profit.
Google has figured this out and is making money. Eventually, the other social media giants will too. Old media will need to learn to monetize their ventures in new ways and the new cadre of consultants emerging from the rolls of corporate layoffs will learn the same lessons I have. There is no free lunch – especially when you are the one serving up all the free information.
Well enough of all this for now. I need to get to work. Understanding how to use Google Apps for a new project is the next item on my To Do List today. To quote my friend Lon… “and did I mention that – it’s free?” Well except that it will probably take all my ‘free’ time for the rest of the week to figure it all out.
Thanks for stopping by. Stay Tuned…