Ever since the financial crisis hit the stock and real estate markets, there’s been a fair bit of discussion about its impact on the web scene. Venture capitalists Sequoia made some powerpoint slides that became quite famous. That was one month ago. (Others, more recently, have been way more positive. Describing the atmosphere at Web 2.0 Expo Berlin, Nancy Williams speaks of optimism, which would be my interpretation as well.) Ever since, I’ve been asked a lot by friends and colleagues if I felt a downturn in business (short answer: no) or if I expected to see one (short answer: not really). It got me thinking about the role of Social Media in times of crisis; here’s a brief summary of my thoughts.
Social Media, I think, won’t suffer through the financial crisis, not at all. Quite the contrary, really: Even if the crisis killed the ad market (which I don’t think it will), Social Media will at least stay very stable. Rather than that, I assume they’ll grow even quicker than before. This isn’t simple optimism at work here, but rather a mix of both the work-related requests I’ve been getting over the last few weeks and months, and of some very simple reasoning:
Where users/customers/guests are insecure, they are less likely to spend money on products, services and companies they don’t know. Instead, they turn towards trusted sources: Ones they know personally or that are recommended by trusted folks. Trust must be earned. And that’s the core business of Social Media.
I don’t know about you (but I’m curious, please share in the comments), but I base my purchase decisions on a mix of research, instant gratification and recommendations by experts and friends. (If you’re lucky, the latter two overlap.) My extended network plays a crucial role there. Yes, I’m speaking of the folks I interact with primarily online: via Twitter, Skype, my blog. This is where the mavens of the web world hang out, this is where I turn to advice (and am being asked for advice, too).
So, short and simple: If someone has money to spend, they won’t throw it at a random faceless company. They’ll turn to those brands who’re open and approachable. They might even speak to them before deciding. And you know what? That’s good for both sides.
Example? Before buying my beloved messenger bag from Alchemy Goods, I had some very specific questions about it. Within a few hours the owner himself, Eli Reich, had answered them in a brief, but informative and personal email. I got it right away, even though it meant ordering a bag all the way from Seattle to Berlin and picking it up at the customs office. And I couldn’t be happier with it. This might seem weird, but I don’t think I’m the only one thinking like this. Lesson learned #1: Listen and respond to your customers. Lesson learned #2: It doesn’t matter which tools you use (Alchemy Goods isn’t on Twitter) as long as you get the basics right.
So am I worried about the financial crisis? Not really. (Knock on woods!) Actually, I’m pretty psyched about the way Social Media will hopefully be embraced by companies outside the tech sphere now. Let’s see where it’ll all go!