This is a summary of a part of the talk Dan Lyons gave at Business of Software 2012. It has been taken from the summary originally written by our BoS in-house blogger, Zuly Gonzalez. Dan covered three important things in his talk – the importance of mobile, the concept of Meme businesses and how to talk to the press. Read the full summary for more information.
This is about the concept of meme businesses and why mobile needs a new kind of storytelling…
Dan Lyons is the writer behind the Fake Steve Jobs blog, which at one point was supposed to be turned into a TV show. In the process Dan learned that the TV business is completely broken. Lesson learned – writing a blog is way more fun than writing a TV show. It did get Dan thinking about how the process of making TV shows works and came up with the concept of, ‘Meme Businesses‘. A brilliant concept.
The home of the meme is YouTube – Hitler discovers… Gangam Style… 75% of YouTube users are mobile. Google has invested $300 million on content; doing an end run around the TV business. As mobile grows, what’s happening to TV? TV is already killing itself. There is a generational shift – young people are tuning out TV and using YouTube more. YouTube has lots of stupid videos, but the money is real.
So the big question is, “Are companies becoming more like TV shows?”. “Yes!” says Dan.
- Attract jerks like TV does.
- Require relatively little capital.
- Don’t last long.
- Different expectations. Not built to last.
- Someone pitches an idea to a network, if the network likes it, the idea gets turned into a pilot at minimal cost. If the pilot does well, they commission a series. If that does well, they commission another series and so on ad infinitum. Eventually, the public loses interest.
- An entrepreneur pitches an idea to a VC, if the VC likes it, the idea gets turned into a MVP or product launch. If the launch does well, they invest more. If that does well, they invest more and so on until they are bought. Eventually, the purchaser loses money.
Today’s ‘hit shows’ are ‘Meme Businesses’:
- Facebook: A global performance space. You don’t just watch the show, you ARE the show. (7 hours/user/month)
- Twitter: Another performance space. Over 60% of usage is mobile.
- Pinterest: 10 million users. (7 hours/user/month)
These are still the early, experimental days. There will be numerous flameouts:
- Color app
- Quora – half a flameout
New world: light, fast, fragmented, ephemeral. Audience is in constant motion.
There is still real, long-term value in businesses that take a different view, a view that involves creating long term value for customers. They won’t necessarily hit the heights and the headlines in the way that Zynga, GroupOn, MySpace and Bebo do, or did, but they will make a difference in the world.
The most spectacular Meme Businesses make a few people rich and usually leave others nursing significant losses. Most Meme Businesses however fail. They are run by, and invested in by people who want to run hard at making something happen, if it doesn’t give up, get out and move on.
Who gets hurt?
- VCs: VCs are built for companies like Intel. They are not built for this world. More money than ideas is bad news for VC firms.
- Angel funds: Crowdfunding is a better fit for the new kind of company.
- Media: A daisy chain of destruction. Ads online don’t work.
- News and entertainment: Also funded by ads.
- Consumers: Get fed the same crap.
Why don’t online ads work?
- Advertising was a creature of the TV age. It was an industry built around 30 second spots.
- Ads are weak on social. Customers fight back with “anti-ads”.
- Mobile makes it even worse because of the tiny screens.
Shift to mobile is hurting Facebook, Google and Pandora (i.e. web-based companies).
But, what if we reinvented advertising? Make it all about context – not just who, but when and where and what they’re doing. However, mobile devices are incredibly personal, so we must be careful not to violate the circle of trust (i.e. don’t be creepy). This has high potential if implemented properly – the ability to reach 7 billion people on the Internet. Two things we need:
- A new kind of storytelling: A new way of crafting stories to the media, and in a language unique to the medium.
- A new business model: Based on something that isn’t advertising, but that accomplishes the same thing (allows you to reach customers).