Three Lessons the Web Can Learn from the Financial Fiasco
As the smoke settles around the financial debacle, we're figuring out what the heck caused a lot of portfolios to shrink. The more I hear about what went wrong, the more I think that the web can apply some of the lessons learned.
Ok, fine--the world financial system and the web are a little different. But in both, a lot of money can be made--and there are a lot of people jumping in without a clear picture of why, or a solid knowledge of how. Here are three cautionary lessons our industry should keep in mind for 2011:
1. Ponzi schemes only work for a while.
Say a goal of your site is to drive people to your Facebook page. But what's the point of your Facebook posts? If you answer "to send visitors to the website," you might be running a web ponzi scheme: pushing traffic from one place to another with no clear goal in mind.
A financial ponzi scheme gives older investors "returns" that are really just money from newer investors--no real value is created. A web ponzi scheme also creates only the illusion of value--it doesn't make sense to count a click to Facebook as a goal if you just push the person back to your website anyways.
It's important to define what the point of each web property will be. If your website sends visitors to Facebook, give them something special they can't get from any of your other web spaces--engage them in a different way, provide content they can't help but share, and give them special promotions that make them want to "Like" you.
2. Bubble = trouble.
Real estate! Everyone's doing it, so we should probably invest in real estate too--it looks like a great idea. I've never really done it before, but how hard could real estate really be, right?
Replace "real estate" with "social media," and suddenly the web sounds eerily similar. The problem isn't that everyone's doing it (that's actually great). It's that they're expecting magic, purely because social media wouldn't be so popular if there weren't easy returns--right? Instead, now the opposite is true--the space is so saturated, we all must think more creatively in order to stand out (which is also great).
Before you start using Twitter, think about what constitutes "success." 10,000 followers? Then map a plan for giving 10,000 people a reason to follow your content. It may be a contest with awesome prizes--and that might cost money. Weigh the expected costs of your plan and its benefits (what benefit do 10,000 followers give you?) Investing in social media without a roadmap is like having a business whose plan is to flip houses for more money without thinking through why they'd actually be worth any more.
3. Sometimes simplicity is best.
Complicated securities played a big role in the financial breakdown. No one knew how their own investments were tied to the other companies falling around them, which made everything even worse.
The same can be said for web pages: simple can be beautiful. If a page is too tough to understand, the outcome isn't ideal. KissMetrics gives us a great example in Chase's site (not to pick on a bank...). There are over 5 five completely different calls to action, making it confusing and distracting for any new visitor.
They might garner more clicks on any of these if they clearly defined the most important action a user would want to take, and located the other calls-to-action on other well-organized pages (or even different landing pages).
Optimism for the New Year
It ain't all storm clouds. Here's how the web is different, and awesome (and why, of my college concentrations in Finance and Marketing, I'm using the latter):
- We can push boundaries more. There are tons of opportunities to experiment--the best successes come from the people who don't play it safe.
- The web isn't a fixed pie. Your gain doesn't have to be someone else's loss. In finance, you can't make money out of thin air--it comes from other people. But on the web, you can inspire someone to give you more of their attention and make them feel better at the same time--so everyone wins.
- It doesn't have to cost a lot (sometimes just your time). For the ratio of return-to-investment, you can't beat it.
Happy New Year, and cheers to an awesome 2011!