Dunbar number

  • February 19, 2019
  • Disruptive innovations are only disruptive for as long as it takes competition to develop and thus create a market. Worse, for the disruptor, the niche it created can also spawn other niches. Social networking provides a vivid example.

    First, there were networking sites that could help you find a job or a sales lead, then there were social sites whose purpose was simply, well, networking. Sites like Facebook and Twitter had no trouble achieving explosive growth, in large part because they were free. But lately the user/consumer has come to realize that free ain’t exactly free. The strings attached cause users to give up privacy and submit to psychological manipulation most often without their consent—a high price to pay for somewhat glorified email.

    Social media’s problems have been well documented so there’s no reason to review them here. But hidden in the headlines are some nervous technology companies that jumped on the bandwagon early to make their wares all social, all the time. Exhibit A in all this is CRM. There’s no CRM company that doesn’t leverage social media to support customer centric business processes. From sales to service and marketing, CRM’s benefits include a lot of value from providing significantly lower cost business processes.

    Social CRM

    But now the vehicle for all that goodness is in trouble and while no vendors that I’ve spoken to think they’ll be abandoning their links to social media, some are getting nervous. A recent story in the New York Times documents how consumers in Illinois filed a suit against Facebook for violating a state privacy law. The suit alleges that Facebook used facial recognition software on users’ photographs without permission. In response, the social media giant is trying to invalidate the action saying that no harm was done and harm beyond simple law breaking is needed to enable a consumer to sue. Seriously.

    Meanwhile, Facebook is in freefall. Grassroots movements encouraging people to quit Facebook, and other social networks, are gaining traction—enough that the company has doubled the waiting period for people to actually leave and have their accounts expunged from 2 to 4 weeks.

    A new niche

    Leaving the law suits aside, this ongoing drama is opening a new social media niche and there are vendors queuing up to enter. The new niche attempts to provide the goodness of social media including—the immediacy, bi-directional communication, low cost and broad distribution—without the vendor shenanigans. Actually, there may be two potential niches, call them Facebook lite or Facebook nice, and notifications.

    The first option would strip away Facebook’s propensity to mine other people’s data but from a commercial standpoint omitting data gathering and analysis would leave Facebook looking bloated and silly. The second option might be a Goldilocks solution because it admits users fairly easily and offers a communications regimen that’s not too much, not too little, but just right. That’s notifications but they aren’t for everyone.

    People using notifications dispense with the small talk—no baby pictures, cats or dogs or birthday reminders. With notifications people are always in the middle of a conversation not trying to hit the reset button because thousands of followers need reminding.

    Social scientists tell us that typical people can maintain between 150 and 200 or so relationships; it’s called the Dunbar number and more than that leads to confusion. Common social networking makes it possible to go way beyond Dunbar though the relationships maintained often look not much different than what you get with broadcast advertising.

    I think there’s a future for notifications and it’s possible that notification technologies will disrupt social networking. As with most disruptions the older technologies won’t necessarily go away but their market reach and importance would decline. Notifications in CRM would give you a just the facts ma’am vendor customer communications stream.

    Testing the idea

    Right now, I’m part of a beta test of a notification product in stealth mode. Compared to Facebook, you might say it’s bare-bones. There are no apps, no profile database for the unscrupulous to mine, just a list of my peeps, what I’ve called their attention to and what they’ve sent me (along with our comments). Sometimes I ignore the incoming flow for lack of time and it’s a good indication that I’ve reached my personal Dunbar number.

    If there were ads and offers in the stream, I’d ignore them too because I’m good at understanding my needs. With so little data emanating from the user you might logically ask how a vendor is supposed to train an algorithm. The simple answer is that you hire people, perhaps subscribers for a time to share their data. That would be more than enough to ethically capture use data and train algorithms.

    Not long ago, Esteban Kolsky and I ran a survey. As with most market research studies the hard part is getting people to take the survey. Ten years ago, it was relatively easy, you just bought a list and invited people and there were usually enough responses for statistical reliability. But lately no one wants to be bothered and market research has taken a hit.

    The good news, though, is that the situation has opened a niche. Database vendors compile lists of people with specific attributes and pay them to take surveys. We researchers pay a fee to the consolidators and we get our answers. Most importantly, the responses come from people with the exact attributes we specify.

    My two bits

    There will be people who say that social media can’t or won’t be effective with a payment model to which I say that’s not my experience. Social media has tapped into a rich vein of information and access shouldn’t rely on subterfuge. It generates huge profits and there’s no longer a reason (if there ever was one) for sneaking around the user database for insights.

    So those are some of the niches opening up in the shadow of social media. Notifications and a pay as you go model for research that’s above board and gives consumers what they need. I think CRM vendors are paying close attention and the current war room mentality companies like Facebook are exhibiting is not helpful and could lead to an unnecessary crisis in social and maybe CRM. We don’t need this.

     

     

    Published: 3 days ago


    A little while ago I got a nice comment from buddy and guru Mark Tamis. He wrote, “I was thinking, it may be a good thing for Oracle to use its cash and buy up Salesforce, and then stick Benioff at the helm. What do you think?”

    I have to say it was and is an interesting idea because Larry is 70 and just stepped up to Executive Chairman, leaving the CEO duties to Mark Hurd and Safra Catz. This idea has been surfaced before too. About a year ago it came up and died a gentle death when few outlets picked up on it.

    Also, it might be human nature to think like this — to look for a single strong leader to take us to the promised land (whatever that is) — but real life experience seems to run in the opposite direction. Rather than seeking the uber boss, societies, at least the successful ones, instead split the organization whenever it gets too big.

    There is a lot of historical precedence for the split over the big boss approach and it has changed over time in a predictable way. To understand the predictability you need a little math in the form of the Dunbar Number.

    The Dunbar Number is actually a very elastic thing and could more easily be described as a concept or even a law of sociology (I dunno, I ain’t a sociologist). It says that the average human can keep track of about 150 or maybe 220 people and after that not so good results. This seems like a big number to me but I am an introvert, not shy, just not into maintaining lots of relationships and I am quite comfortable with ideas.

    If you look at human organizations, pre-social media, the Dunbar concept applies remarkably well. Of course, CEOs are always trying to limit their direct reports but go up or down a level and you see interesting things. For example, in the Middle Ages, monasteries were working communities of about the Dunbar number. When one got too big, the abbot split off a unit and told one of the members to go elsewhere, build a new monastery, and keep up the tradition. That’s actually how the monastic tradition spread and if you read “How the Irish Saved Civilization” by Thomas Cahill you’ll see the story played out.

    Now, social media has turned the Dunbar Number on its head but even with that assist there is a practical limit to the number of friends you can have even online. Perhaps that number varies by individual but the point is that it’s finite and probably not as big as the number of followers many of us have.

    There are other examples too such as the military company, the atomic unit of military effectiveness. Corps, divisions, regiments, and battalions are all different aggregations of companies. But what’s this have to do with Oracle? Well it’s indirect. A story in today’s New York Times announces that HP’s CEO, Meg Whitman, wants to split the company into a PC unit and an Enterprise one.

    My analysis is that HP is too big to be effective at pursuing a strategy even with all of the computers and communication infrastructure the company has so it’s a natural to seek a way to group similar products and skills into separate companies. Refer to the monastery idea and consider Dunbar and ask yourself if this makes sense.

    So, all this is to say that my response to Mark Tamis and his idea is to think small-er. Rather than trying to find the uber boss, if that person even exists, it might be time for Oracle to consider cleaving itself into logical units that have more autonomy than they currently do but that still tree up to a single entity. This might be a worthwhile trend for a lot of first generation Silicon Valley companies.

    Oracle is currently made up of a Byzantine assortment of in-house developed technologies and bought companies. It is also a player in almost every part of the tech sector from hardware to apps. The company’s current tag line, “hardware and software engineered to work together” is well chosen to give an impression that is no longer needed. The goods might be engineered together but that’s not the same as being designed and built for the purpose from whole cloth. In fact, Oracle reflects the marketplace it tries to serve which is sophisticated, complex, and aggressively heterogeneous, whatever the marketing lingo says.

    Certainly Meg Whitman is rolling the dice with this split but from my perspective it is a logical and appropriate thing to do, and one that has historically delivered results. Would Oracle ever consider splitting into a hardware enterprise, a legacy software company, and a third dedicated to more modern web/social/mobile technologies? Never say never out in the valley, except maybe to the idea of Benioff taking over Oracle.

    Published: 4 years ago