November 16, 2009

Inefficiency of Interaction Driving Need for Social Leverage

"It is a complete joke how we interact with people on the computer right now," believes Brad Feld of the Foundry Group. With multiple devices and scads of Web services needed to consume information and engage with others on the Web effectively, Feld and other venture capitalists are looking for ways to fund the next generation of companies and products designed to leverage social connections, reducing information overload and enabling simpler collaboration in the enterprise. In a keynote panel at the Defrag conference last week, five venture capitalists explained how they thought they could help companies take advantage of social experiences that are being forged, which, if successful, could supplant the way we discover information today.

Today's Web is one that is largely search driven, leading to Google's position as both king and king maker. But Union Square Ventures VC and principal Fred Wilson said that much of the information we discover and the links we click on are coming through social experiences, instead of from search or navigation. Taking advantage of this activity woul be a logical extension for companies, and therefore, for VCs looking to enable it to happen.

Roger Ehrenberg of IA Capital Partners, whose fund is behind BlogTalkRadio, Mashery, TweetDeck, and many other services, said that despite advances, the Web continues to have a problem of finding relevant information, and identifying people who would be potential connections. Social leverage should enable you to tap into the knowledge of your peers to bring the information to you, at your own pace.

"It's an opt-in world, and you can let people in as they deliver information," Ehrenberg said. "When you look at all this information you are receiving, you need to build in filtering."

As I have often stated, I believe "there is no information overload", or at least, there can't be without your explicit permissions. Feld argued that the perception of information overload is due to individuals' approach to how they consume data, more so than an increase in total data.

"We are stuck with a rigid set of distribution models," Feld said. "You can be rigid or disciplined about one type of information, or you can let whatever comes at you come at you. The computer has to get a lot smarter about what to do with all that stuff, and it needs more adaptability. We are in an era over the next decade where there will be a fundamental shift."

Over the last 20 years, Fred Wilson has said he has already seen two major shifts in communication. In the 1980s, as he started in the venture capital business, events would lead to business cards, which led to hours on the phone chasing deals. The 90s brought e-mail and the ability to hit an estimated 10 times as many people. Blogging then let him reach more than 10,000 people a day, which he called "a different interaction model."

"I still see the deals I want to see and I can see better deals because of it," he said. "E-mail is a heavy interaction model, which is a lot of work, but a blog post is easy for me... I don't even use the phone any more."

Feld and Wilson have found ways to adapt to the changing dynamic to continue their efforts in business, but with so many others feeling an information onslaught, lacking proper filters to reduce the noise, this too sets up the potential for new solutions and new services.

"The biggest opportunity is the opportunity in the enterprise for social leverage," said Jim Tybur of Trinity Ventures, "There are tons of opportunities for that to permeate throughout business. There is a place where e-mail and social streams can coexist effectively."