Crowds, Hives, Mobs, and Swarms

Here is a great article discussing intriguing concepts in consumer innovation.

With the diffusion of networking technologies, collective consumer innovation is taking on new forms that are transforming the nature of consumption and work and, with it, society and marketing[.]

The authors argue that marketers should redefine “consumer” as an individual belonging to various creative/collaborative communities (Crowds, Hives, Mobs, and Swarms), where routine information consumption and disgorgement leads to unanticipated insights and innovations.

The authors define Crowds as large groups organized around a specific purpose or goal that disbands at the completion of the goal. The authors state that an example of Crowd innovation is the Frito-Lay Super Bowl Doritos advertising competition “Crash the Super Bowl”.

Crowds tend to emphasize a particular project, or bounded set of projects. They are organized, focused, and purposive. They are centered on the achievement of a particular objective, after which they usually disband.

The authors define Hives as groups formed to reach a specific goal; these groups are typically small in size but high in skill (e.g., the authors point to the open source community as an excellent example of a Hive, with its attendant focus on fostering innovation but creating a creative commons licensing struture to prevent corporations from gaining a hegemony over innovation within the community).

Usually Hive sites have many different forum topics including sections for expert talk, exhibiting creations, and/or providing downloads.

Mobs are defined by their singular focus on a specialist topic, providing targeted expertise solely to that topic. The authors point out single fathers, registered massage therapists, or nineteenth-century coin collectors as Mobs.

[The Mob’s] specific focus lends them particular value, especially to marketers who are able to capitalize on the value of segmentation, and the insights that come from understanding the unique needs of various segments.

Swarms involve communities engaging in mass behavior where individual contribution may be low but aggregate (output) value is high. The authors categorize Swarm behavior along four vectors: hyperlinking (think Google page rank), creating a “nation” of consumers so vast and complex it cannot be easily duplicated (eBay), ranking and rating (ala Amazon), and finally tagging (del.icio.us).

[H]ighly adaptive and complex solutions can emerge when large numbers of slightly diverse individuals with different expertise follow simple rules in pursuit of their objectives.

It is the convergence of childlike play, adult rules, passionate fandom, and serious work that make these communities so intriguing to marketers.

In an attempt to overcome the utilitarian notion of work and creativity, many of these [new types of consumers] reaestheticize their creations and re-enchant creative labor in a way that is not typically found in the many mundane jobs which the typical industrial and postindustrial information economy offers[.]

But therein lies the difficulty in trying to “study” or “tap into” or “utilize” these groups; that is, the authors point out that a Mob can spin off into a Crowd, which can turn into a Swarm, etc, a process the authors label as “Elicitation-Evaluation” (i.e., inducing a Mob to create something, like Frito-Lay’s Super Bowl ads, which then spins to a wider audience that rates, ranks, and tags submissions, which then distills a “winner”, but then disbands to go participate elsewhere). It’s more like trying to manipulate an amoeba rather than command nanotechnology.

Nevertheless, the end result, the authors argue, is a serious organizational network with roots in medieval craft guilds, art studios, and organized work networks with four implications for marketers: (1) marketers should address Crowds, Hives, Mobs, and Swarms differently, (2) marketing managers need to think of themselves and their brands as a thread in an ongoing communal tapestry, (3) these communities should be considered as fiscal partners in product/service innovation, and (4) companies need to understand that these communities operate as powerful counterbalances to corporations perceived to be acting unethically, irresponsibly, and abusively (e.g., see Google search steak and shake and look for “A Deaf Mom Shares Her World: Steak and Shake Denies Service” about position three).

Social media and Obama victory

The New York Times has a great read on how Obama embraced social media to help win the election.

Thomas Jefferson used newspapers to win the presidency, F.D.R. used radio to change the way he governed, J.F.K. was the first president to understand television…Senator Barack Obama understood that you could use the Web to lower the cost of building a political brand.

Consider the following:

3,099,323 supporters and 527,783 wall messages on an Obama Facebook page.

136,083 subscribers on an Obama YouTube channel.

This user-generated Obama video has 11,696,725 views as of this posting (and is this a good, bad, or neutral brand impression? Does it matter?):

An interesting theory raised in the New York Times article is that by embracing and using social media’s power to organize and influence–and help raise $600 million–traditional party foundations have been irrevocably shaken, if not permanently altered. Similarly, it seems to me that many firms today are in a place where the political parties were pre-Obama: comfortably employing “tried and true” models to promote, build, sustain, and manage their brands.

Yes, entities like Trulia, Zillow, etc, injected much needed creativity and transparency into the historically balkanized and feudal-like operations of the real estate industry. But the industry has now largely absorbed the impact these entities had and is now challenging them in certain ways (e.g., by demanding accountability in terms of lead quality and conversion as opposed to just click volumes). However, it’s social media that will change the foundations of the real estate industry, just like it did in the recent presidential campaign.

Further, what’s brilliant about social media is that in and of itself it’s transparent. You want the inside scoop on Obama’s strategy? It’s no secret, really, because you can just see what his team put together. That is, you can model your own social media strategy on Obama’s (e.g., look at how the Obama team structured its Facebook page and YouTube channel) and deduce what strategic choices were made by studying the tactics employed. For more strategies, I encourage you to also visit Owyang’s blog.

Swarm business / swarm creativity in real estate

Create value for the swarm. That is the overarching goal of a swarm business mindset. Swarm creativity embodies the passion that drives this goal, along with coolhunting as an adjunct exercise. Real estate, as an industry, seems well-poised to take advantage of swarm creativity.

Nicholas G. Carr, of the Economist.com explains the basics of swarm business:

To achieve this status, a swarm-business aspirant must follow three principles. First it must “gain power by giving it away”. For instance the MySpace social-networking site works by granting its users the ability to determine its rules and content. Second, the company must be seen to “share with the swarm”—IBM, for example, has backed Linux’s open-source software with cash and code. Finally, firms must “concentrate on the swarm, not on making money”.

HBS Working Knowledge elaborates on swarm creativity:

There are five essential elements to collaborative innovation networks: learning networks, sound ethical principles, trust and self-organization, making knowledge accessible to everyone, and internal honesty and transparency.

Following Carr’s lead, a real estate firm must first abandon its possessive brand centrality and opt for a more decentralized brand presence. This means consumers, employees, real estate agents, vendors, and management equally “own” the brand. This means, at the core, a firm must open itself up to transparency and honest consumer review; which really means consumer ratings of its website, agents, customer service and then using these ratings as forums–conduits–to engage these consumers as collaborative partners to create a better value proposition. Internally, a firm could create a collaborative swarm between agents, IT, marketing, and management to build on the collaborative concepts derived from the consumer-based swarm insights.

For ROI-minded owners and managers, a swarm exercise is likely a hard pill to swallow, let alone ever digest. This is because swarm creativity lends itself to indirect monetization strategies (as does most social media). This could also be related to the fact that real estate as an industry, at first glance, is not really engaged in new product development processes (swarm creativity naturally lends itself to new product development ideation).

What is the real estate product? A house. What is the service? Representing a buyer or seller while giving advice.

This description is a bit facetious, but the point is that real estate professionals should begin looking at their entire web presence–and service value proposition–as an ongoing product that constantly requires new strategies and ideas that evolves in line with consumer expectations. If 10 swarm exercises yield one new service enhancement strategy that increases customer loyalty and retention, arguably the swarm exercise is worth it; especially if this strategy enhances a full-service agent’s consumer value proposition. In this example, ROI would be indirectly realized: as consumer satisfication increases, referals increase, and competitors suffer a corresponding competitive disadvantage (assuming they are late adopters). By implementing a consumer swarm idea, a firm has rewarded the swarm: first by listening and second by acting on its advice. This, in turn, promotes further honesty and integrity within the swarm and, hopefully, within the firm itself; eventually driving higher ROI over the long-term as internal strategies become integrally aligned with near real-time consumer driven initiatives.