When it comes to social media, Marcus Nelson is a pro. For three years, he helmed the social media efforts at Salesforce.com (CRM), and while he was there, he got some pretty good ideas for creating helpful tools. That led him to start his own business, Addvocate, last year.
I recently had a chance to talk to Nelson, and he had some interesting things to say about the state of the social media industry — especially regarding Facebook (FB):
Q: What does Addvocate do?
A: Addvocate is a platform where employees can leverage the power of social media to evangelize brands and engage directly with customers. Who knows a company better than its own employees? With Addvocate’s technology, businesses can magnify employees’ “social voices.” This targeted brand exposure has a direct correlation with increased sales, better informed customers and a more positive association between brands and their products.
Q: What’s your take on the Facebook IPO? How did it impact the social media industry?
A: For a variety of reasons — including some beyond Facebook’s control — the IPO was a giant disappointment that affected the entire technology IPO landscape, not just companies whose models involved social media. Companies like Spotify, AirBnB, Box and Glam Media also discovered the IPO window had closed in Facebook’s disastrous aftermath.
Yet in some ways, I also believe strongly that Facebook’s slump was actually good for the entire tech industry. Why? Because it put the focus back where it belongs: making customers happy and delivering strong business results. This forced social companies to think longer and harder about what sets them apart and delivering meaningful value.
Q: What about the latest report from the company?
A: It’s not easy for a company the size of Facebook to make a dramatic adjustment to its business model, and then deliver the goods. Yet, that’s just what the latest results show — a new focus on mobility that appears to be paying off. Investors are finally showing confidence in Facebook’s ability to deliver with regard to monetization. The real question for Facebook is: Can it please stockholders without alienating users? People don’t go to Facebook to be bombarded with ads; Facebook went viral because people want that social validation factor. The balance between privacy and ad monetization will continue to define the company.
Q: What do you think of some of the new competitors, especially SnapChat? Should Facebook be worried?
A: Something tells me Zuckerberg doesn’t spend his nights worrying about SnapChat or any other startup. Although we are in an era where startup costs are at all-time lows and markets are ripe for disruption, Facebook is the 800-pound gorilla of social and mobile. The only thing Facebook should worry about is its ability to keep moving forward in a way that keeps users happy even as it finds new ways to make money.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.