Social media has changed the face of how we do business…no question, and dramatically so.

At one level social media and its impact is easy to understand.

Take the age-old ideas of earned media and community dynamics…add to that the requisite poise of corporate and personal transparency and you have the outlines of the core social media building blocks. Very few rules and seemingly simple.

The bigger and more defining idea for businesses is the reversal of power…the change of center from the corporation to the consumer. This democratization of control turns traditional business models and the world on its head.

This power shift gives people like ourselves, with our blogs and Facebook Walls and Twitter feeds and a Yelp-ish world view, a global network for our thoughts and likes and dislikes. If you think that Nike or Nordstrom or Best Buy is in control…not at all. The customer is, more than ever before. And this is a key building block…maybe more so, the overriding superset of the core elements of a social web reality.

This social landscape coupled with a global marketplace puts the consumer very much at the center of their world and more in control than at any other time in history. Their opinion really matters because of the network effect and with unlimited purchasing venues to choose from, they are the alpha customer. They don’t like a company’s politics? CLICK… Find the shopping process too difficult? CLICK… The typo on the catalog page really annoys them?  CLICK…and gone.

This is transformational. One happy and connected customer can start a spiraling of praise which can hyper accelerate building a global brand. And one maligned (or maladjusted) unhappy customer can put the breaks on a multi-million dollar campaign and bring pain to a huge company.

Social media is over analyzed yet often misunderstood and reduced to a list mania of ‘do’s and don’ts’. In actuality, it is difficult to articulate its import and relationship to a business building a brand in language that is not too high in the stratosphere to become abstract nor too detailed where it becomes trivialized and often incorrect.

The power of the social tools and platforms themselves are confounding.

We all remember “The medium is the message” refrain from Marshall McLuhan. Marketers especially have confused the eras. We hear often that the answer is in the tools like blogs or Facebook pages themselves. The ‘Build it and they will come’ mantra.

Not so. These tools, powerful as they are, are the channels–vanilla envelopes demanding personality and message and personae that will spur the broader community conversations. Twitter streams. Facebook pages. Blogs. Tumbleblogs and more. Wildly disruptive tools in the right hands. But remarkably hollow and empty until the spark of a personality or a company voice is found.

We’ve all been through this experiment.

Build and launch the blog…and sit back and wonder, why no traffic? Bring in tried and true traffic aggregaters using scientific SEM techniques. Traffic comes then bounces and is gone.

Start over…find your voice. Find a personal or company point of view and post and post and post…and build credibility and reputation and traffic comes and hangs around. Add scientific methods to the traffic mix, maybe some public speaking by the ‘expert’ or Meet Ups with your fans on top of this and poof…maybe you have a brand in the brewing.

Tools are present galore but just mixing these with a few social building blocks usually amounts to naught. No surprise…look around and you’ll find that what is obvious for success, is also rare. Go to a bunch of websites. Most I bet will be brochureware or raw catalogs with commentless blogs or one-sided twitter feeds and sparsely ‘liked’ fan pages hanging off the site like unused appendages.

For brands this social change appears remarkably difficult to understand…and even harder to execute on.

“Build a community.”“Establish trust.” “Listen to your customers as if they are the company.” “Be interesting”….Non trivial endeavors. And they sound so general and basic they appear wrong. And herein lies the crux why a social approach is so difficult for businesses–because while there are basic building blocks there are no predetermined models nor templates or roadmaps. This is a relationship between a brand and its community of individuals. Each solution is unique…built of like materials but personal and dynamic at its core.

This conversation about community and the customer/company power shift is the start of every meeting at every company, little or big when they begin to think about how social media needs to be part of who they are, how they relate to their customer and how this impacts traffic and commerce and an enthusiast community.

So…what’s the why of this?

Never has the upside for companies been greater, market building economics less prohibitive and the potential to build true brand value and dynamic communities as within reach. The examples are all around us. From large social platforms to innovations in social commerce to an ocean of new start-ups popping up out of the crowd daily.

Companies often act as if the openness of social media–especially between company and customers–is messy and unnatural. Actually, it is just the opposite.

In the proverbial hometown brick and mortar world of shops and customers, successful businesses were built on relationships with the community. They supported their communities, listened face-to-face to feedback and in turn the community supported them with loyalty and their patronage. A two-way street.

Connections between companies and communities is nothing unnatural. It just went missing. Online businesses lost the sense of local, community and connection with customer when they became just a click. Social media is local on a global basis and community dynamics on steroids. Not unnatural, but hyper real in its intensity and ability to impact brand, reach and economic success. Core human and business values on a global and local and real-time stage.

Social media certainly adds a new layer of tools and capabilities but even more, it’s a change of perspective that is not at all subtle. For businesses, it requires that they put a face or a human voice behind their URL. It requires that they listen and respond and host their communities with a place they can interact with other customers and the company itself. The power of conversations and loyalty of a community can’t be underestimated.

Building a brand is hard work. Always has been.

Now it’s easier actually–brick and mortar businesses need to find that tie-in of their value to a real-time connected, often geolocated world. Online businesses need to find a voice, if not a person, who can talk to their customers and create that reality that an online community is not comprised of clicks…but of customers and people.

My reactions from the first day of TechCrunch Disrupt in SF.

Thanks to Michael Arrington and the TechCrunch team for the blogger’s pass. It was well worth the trip to experience this event and great seats really make a difference!

This is a really smart conference design…household names and industry dominant companies counterbalanced with scrappy startups demoing to the audience. At its very best an homage to the entrepreneurial spirit.

Agenda of conference is here to get descriptions and bios of the speakers.

Brilliant pairing of Mark PIncus (Zynga) and Bing Gordon (Electronic Arts Founder, now with KP). Social game mogul by data analysis dancing with game studio creator by intuition and creativity. More to come on this.

Mess of a Super Angel Panel. Comical in its abruptness and squeezing seven panelists into a 30 minute spot. This is pulp VC at its most sensational and boring. I suggest you read Mark Suster’s post this morning in Both Sides of the Table for his point of view on the panel and what he really wanted to say. Thanks Mark!

Reid Hoffman (Founder of LinkedIn and investor) hitting it right that there is lots of room for multiple social networks (besides Facebook) but doing a less than clear job of articulating the difference between the two. Disappointing as this was a great opportunity for him to clarify LinkedIn’s unique DNA and future directions. I blogged on the missed potential of LinkedIn here.

Todd Bradley from HP topping the boredom chart with a corporate pitch for HP that was not only all spin but also arrogant in its defensiveness of the company. This was just out of place. He and HP are like Microsoft of old at their very worse.

Peter Thiel, Facebook Board member and Founders Fund. Articulate. Believable. Fascinating. Thoughtful.

Scott Cook from Intuit, a brilliant burst of fresh air, still excited, still the product guy for Intuit after two decades of caring deeply about the customer. Now tackling healthcare for the small business market. His standout quote of the talk was “I believe you either disrupt or get disrupted”.

Chegg CEO Dan Rosensweig, a detailed deep dive into an industry I knew nothing about but came away inspired.

Loved the start-up pitches to the audience and panel. Fun time and thought provoking. Broke up a long day with diversity and intensity.

Best part of the day for me was connecting with old friend Greg Woock, CEO of Pinger and getting to meet Mark Suster in person, after a year of conversations on his blog, Both Sides of the Table. Proof that friendships can really be created online that can move to the offline world.

The game has changed obviously…but, it’s certainly not over.

Facebook is becoming what Microsoft used to be back in the 90s…essential to everyone, impossible to beat and feeling a bit like the platform bully.

They are smart to leverage what they have to the hilt. It’s just good business and I would have done the same, but like Microsoft, they will lose  (if they have not already) the passion and commitment of those who have no choice but to use their platform, which today is everyone.  This is starting to sound like Windows to me.

You can’t beat Facebook at their game…but you can build great companies that can win around them. Anyone in the gaming or multimedia or peripheral add-on space in the 90s will tell you the same. I have personal scars from this and am a veteran of the birth of coopetition.

The announcement (I watched the livestream on Facebook) was like a webcam in a frat house. Nonetheless, Facebook Places will certainly be a monster product and hugely successful based on the massive leverage of of the platform obviously. Their reach and numbers are poetic in their size.

And yes, I’m a power Facebook user, a fan, consult on how to best use fan pages to my clients… and am excited about Places even though underwhelmed by their lack of originality. I’ll certainly use it because the Facebook platform is core to how I live, but I’m still checking in on Foursquare for now.

I’m just a big believer in the check-in space and rooting for the underdog today. I believe in people who are inventive and I think the Foursquare guys are… and with spunk, smarts and yes, a good chunk of luck can potentially carve out something that makes sense, has value to the users and the merchants.

What’s the answer? I’m not certain but here’s Foursquare’s response in SAI today. We do need more of a answer from them though.

I like the intersection of the check-in and coupon space a lot. That’s where I’m looking for the next great explosion on the streets with check-in. I’m searching for apps that are at the intersection of these because I believe that the social commerce component is key…as it creates an open market and value potentially for user and businesses alike.

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Postscript thought

I’m starting to think that Om Malik may have it right that Facebook is after the local merchants and Yelp. His post is here. Thanks to @PS 98 for surfacing this.

Even though I still believe that the check-in space is embryonic, and even if Facebook’s focus is Yelp, the swishing of the giant’s tail still makes it a difficult place for Foursquare and the other players.

I’m a big fan of Gilt Groupe.

Even if you are not a shopper or a luxury brand aficionado…join Gilt.com buyer’s club and follow along. There is a lot to be learned from their perfect sense of brand definition.

It’s really refreshing to see a new brand spring up that just gets the relationship between what the company is providing and the needs of its customers. That’s why while at its mechanical core Gilt.com is a discount store; it is already a $400M business that feels like a 5th avenue boutique that never gets stale.

Gilt understands the viral loop and social commerce certainly…but that is not their pure play, as it is with Groupon and others.

Groupon and the group buying services take value, scarcity, group buying and geographical location and smartly shake them up…and capture the fun of treating yourself to something special, often with friends. Groupon’s brand is about the daily deal and the fun of buying…it’s an impulse not a luxury goods positioning. When done perfectly, as Groupon does, its magic…but it’s different from shopping for a Tory Burch handbag or an Armani overcoat.

Gilt really gets brand and e-commerce marketing and selling. They understand deeply the appeal of the brands they sell, represent them with glam and imagination and represent the why and how of their customers desire to buy…and the atmosphere they like to shop in. They are courteous rather than pushy, focusing on value rather than cost and always…brand appeal and how important it is to their customer.

There is scarcity and referral in their model but they eschew the freneticsm of a threshold pushed sale and feel more like a high-end rack runway at great value than a push-and-shove sample sale of a thousand folks grabbing at designer t-shirts.

If you believe in the value of luxury brands and feel good about owning or wearing or using them…this is the place. Value with no discount bin feel. Selection without the sense of buying seconds. Clarity of a luxury story at a price that you can afford.

There is no cookie cutter marketing or business model here. Only a great study of a company that understands the value add of brokering brands to brand conscious customers at pricing they can afford, without price being the major selling point.

Take a look at this marketing analysis of Gilt Groupe’s studied approach to finding customers and keeping them happy and returning and loyal. It’s a workable list that all business marketers should pay attention to. Every business and brand model is different (as it should be) but there is value to learn from those that figure it out…and Gilt certainly has for their audience.

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Thanks to @robinharper for sending the background post my way.

When I blogged on Groupon and the social buying model, I was blown away by the newness and inventiveness of this smartly social approach to commerce.

I’ve been wondering where the company goes now that they’ve conquered the major cities of US and Europe (over 50 by their count) and have brand recognition far and above the hundreds of imitators. ‘Groupons’ are so well known and commonly acknowledged that they have become a new noun.

Do they go vertical and build Groupons for highly targeted groups like women’s sports, or golf or art aficionados?

Do they white label or co-brand their hosted offering and offer it out to newspapers and businesses as a new type of merchandise and a new coupon currency?

Do they move to behavioral targeting of the opt-in subscribers to personalize each offer ala a Facebook approach?

Do they go true local like Foursquare and target neighborhood by neighborhood rather than city by city?

The recent G-team announcement from Groupon, still mostly under the radar, is making me wonder whether they are moving to make possible more than the current two-deals-per-day-per-neighborhood. Logically, the more they can push the limits of scarcity, the more deals they have per-day-per-place, the more revenue they can generate.

To understand G-team in Groupon’s words, click here. They position it as a return to their roots and a way for causes to use their coupon currency model. I don’t question their altruism but these folks are as smart social marketers and business people I’ve seen anywhere and I’m thinking there is a clue to a broader business change in the play.

It appears (and the information is really vague) that causes or ‘fun activities’ are given the nod by Groupon as acceptable and then the Groupon machine is brought in…infrastructure to host, launch and manage the promotion. A vast vendor base to match a deal with a cause.

I see this as the beginning of a new commerce structure based on social coupons for the business world. And it will solve a major growth hurdle for them.

Besides gobbling up every city on the globe (which they are), they are a bit cuffed by the need to maintain scarcity of deals and a social buying core. My take is that G-team is the beginnings of their attempt to move more and more targeted deals into areas. That’s the clearest way to get more customers and drive more revenue.

So maybe what G-team is about is a beginning of a bunch of changes and expansions:

1. Provide the Groupon coupon currency machine to causes or businesses so that more deals can be addressed daily through niche and socially inspired community fundraising or events.

Maybe the niche is not moms or racquetball players, but people who support animal rescue or clean-up-the-river or parks for kids. People will tolerate more deals with specific targets if they are causes for good. Revenue splits aside this is logical.

2. Vertically segment the opt-in list. People who believe or chose various causes are both a subset of their massive database and an expansion. One of the ‘can’t do’s’ for Groupon is to thin out the audience so thresholds don’t get tipped and filled.

3. Behaviorally target the deal recipient. What Facebook can do with advertising, Groupon can figure out for behavioral matching of a deal with a personal profile. They have a lot of customer data now; probably enough. Or they can partner with (or sell to) Facebook to make this happen.

4. Redefine local as proximity as Foursquare has and figure out how to localize from city to neighborhood based on subscriber density per location.

5. Move to hard goods not just services. They can move from services like a dinner to goods like TVs or computers or clothing with a slight twist to their methodology.

I’m fascinated with social commerce and the simple breakaway model that Groupon defined and owns today. But they will get to the point where they’ve blanketed all the cities, then the larger towns on the planet where the model can work.

Then what? How do they grow when they have everyone as a subscriber and only two deals a day?

I think G-team is a clue and some variation of my list of five above will happen…and happen soon.