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Why The Community CEO Doesn't Work
Clarification Point: I strongly believe a CEO should talk to their customers and get feedback. It's critical for success. The Community CEO described below is not the same thing.
I've written about Mahalo before including when we took a look at Mahalo's Alexa ranking. A quick visit to Alexa today shows 60% of their traffic is directly to internal sites and what that means is most likely somewhere around 70-75% of the Mahalo Alexa rank is actually internal traffic (i.e. their guides). I note this because it's a good segue into the topic of this column: Why the Community CEO doesn't work.
Earlier this week Mahalo CEO Jason Calacanis posted a question on LinkedIn to his connections. The question was, "How would you get Mahalo Daily to 250k daily viewers?" So far there are 24 responses from his fans. He has posted questions like this before including "What would you do as Mahalo CEO?" on his blog and on other sites as well. This is what I mean by "Community CEO". I believe this is a mistake for two main reasons: a. The customer loses faith in the product and b. The staff loses faith in their leader. This article isn't only about Jason as I have seen other CEOs do this as well, he just seems to be most vocal about it.
The Customer Loses Faith in the Product
When the person who is supposed to be leading the product asks the customer for help time-after-time, it makes the customer lose faith in the product itself. If the CEO can't figure out what to do, then why should I use the product and put my trust in it?
While SEO directory products like Mahalo have low switching costs, there is still a cost. Users want to believe in the products and services they use and when the Community CEO comes onto the stage, users may start to look elsewhere.
I also find that people wonder if the Community CEO is really a leader. Personally I don't understand why I should provide free advice to a healthy company without some reward or return? In the case of asking about how to raise video views, I don't see a benefit for me as the "helper". I help Drupal because I know my help will make Drupal a better product in future releases.
The Staff Loses Faith in their Leader
Can you imagine a staff meeting by a Community CEO? When a team member asks a question, the Community CEO responds with, "Jane, let me ask my Facebook friends for how to handle and get back to you." It's important that the leader of a company act like the leader. We've seen tons of corporate scandals ruin the morale of the staff and a Web startup is no different.
I've never seen a Fortune 100 CEO asking the public for advice on how to run his or her business. Not once. Do CEOs need help? Sure. They get help from their network including other execs, consultants, etc. Mahalo has a very large war chest. Instead of creating videos, Jason might be wise to use some of that money for strategic advice.
In Mahalo's case, Jason is relying on loads of employees to build his application. If I was a guide, I would certainly question Mahalo's ability to be a going concern. Perhaps the fact that they get a check makes it ok.
Conclusion
Most Community CEOs have tons of contacts that they can reach out to privately for ideas and tips. I am by no means saying that a CEO should have all of the answers but asking for help should be dealt with properly. While the Internet is all about openess and sharing, everyone is trying to build a business, a real, revenue-sustaining business. Let's not forget that. If you are the leader of the ship, be the leader. And the CEO is the leader.
Update: Techcrunch has a good article this evening about the second go around for the Entrepreneur.
You are so far off base it's not even funny.
"This is what I mean by "Community CEO". I believe this is a mistake for two main reasons: a. The customer loses faith in the product and b. The staff loses faith in their leader. "
Put down that pipe!
"If the CEO can't figure out what to do, then why should I use the product and put my trust in it?"
The CEO is not the end-all-be-all of the company. The customers (users) are the end-all-be-all. Without customers, you're royally screwed. You can have the grandest vision for your product, but if no one wants to use it, then again - you're screwed. Finding out what people actually WANT and providing it in a way that creates VALUE is a fundamental of business.
"Personally I don't understand why I should provide free advice to a healthy company without some reward or return?"
I think this can be summed up in one word: selfish. How far does being selfish with your ideas and opinions on the web get you?
"I've never seen a Fortune 100 CEO asking the public for advice on how to run his or her business. Not once."
Jason (and others) are not standing on a corner and screaming for someone to help them. They are reaching out to people who have given PERMISSION for them to be contacted. Whether it's by adding someone as a friend in Facebook, LinkedIn, Twitter or because they subscribe to your blog feed, it's all the same.
"Instead of creating videos, Jason might be wise to use some of that money for strategic advice."
This is classic big-money thinking. Sure, so he raised a lot of money. Better go spend it on advice from people that don't (and probably won't) ever use the product itself. Gee, that's a great way to run a company.
"In Mahalo's case, Jason is relying on loads of employees to build his application. If I was a guide, I would certainly question Mahalo's ability to be a going concern."
What the hell does that mean? Let me reinterpret how this reads: "Company X is paying N employees to build their application. That should raise suspicion because, oh my, how will they ever continue since they have so many employees building their application."
Doesn't make sense, right? Just like what you wrote.
"Most Community CEOs have tons of contacts that they can reach out to privately for ideas and tips. I am by no means saying that a CEO should have all of the answers but asking for help should be dealt with properly. While the Internet is all about openess and sharing, everyone is trying to build a business, a real, revenue-sustaining business. Let's not forget that. If you are the leader of the ship, be the leader. And the CEO is the leader."
This isn't 1999. This is 2007. The web has grown beyond Sand Hill Road and the old boys club.
First, the long tail will win for Calacanis. Calacanis will make this work based on personality--if
He's going up against Google, who is the biggest bohemouth in the online tech world & with tons of online love.
First, the wisdom of crowds wins. He's also leveraged his blog as a group of advocates for the company.
Second, He's proving that he cares about his customers and he listens. That sort of openness and authenticity is what will make this announcement like flypaper to social media advocates across the web.
Third, whatever the success of Mahalo, this type of action is a win for Calicanis as a brand and career-minded individual.
Fourth, your credibility argument assumes the old model--and other industries. Visionaries who are over-concerned with perception politics end up being zeros on the innovation and success fronts.
How many folks now are going to go check out his blog now....
First, the long tail will win for Calacanis. Calacanis will make this work based on personality--if
He's going up against Google, who is the biggest bohemouth in the online tech world & with tons of online love.
First, the wisdom of crowds wins. He's also leveraged his blog as a group of advocates for the company.
Second, He's proving that he cares about his customers and he listens. That sort of openness and authenticity is what will make this announcement like flypaper to social media advocates across the web.
Third, whatever the success of Mahalo, this type of action is a win for Calicanis as a brand and career-minded individual.
Fourth, your credibility argument assumes the old model--and other industries. Visionaries who are over-concerned with perception politics end up being zeros on the innovation and success fronts.
How many folks now are going to go check out his blog now....
I think its good that he is open about this. I would imagine he has had some good experience in asking people in the past. I think its a good way of getting people talking about the product.
I have an idea on how he could raise up his traffic but as I am no a connection he will never here it :p
I think it shows a lack of ego if you are open to others ideas and suggestions.
Allen, you know I love you but on this one I think you're wrong. The folks above did a great job stating why. I'll give you some more reasons.
First off, I can tell you that being open and transparent worked really well for us at Weblogs, Inc. and that business went VERY well as you know.
Mahalo has been doing amazing and the feedback we have from the public has really helped shape the product. We do this in many different ways every day and my open door policy is but ONE of our open techniques.
1. We have lunch four days a week with our ENTIRE team at Mahalo. That's 50 people around one huge lunch table--it's crazy. You should stop by some time when you're in Los Angeles.
2. I accept every friend on every service.... and talk to them!
3. I answer every email, IM, skype, etc. I can... it's up to about 300-500 a day right now. It takes me two hours a day to do this!
4. We ask questions on various services like LinkedIn and Facebook.
5. We blog.
6. We read and respond to people's blogs when they comment about us.
7. When I do interviews with the press and they ask questions I frequently ask the press "what would you do if you ran Mahalo?" or "Who do you think we're competing with?" or "What do you think our biggest challenge will be?"
Look at our relationship.
You're very negative on your blog about almost everything, but still I engage you. Why? Because I know behind your negativity you care about the product and that you love it. That you love me and you want to see it succeed--you just want to be heard.
You've got valid ideas and they should be heard... I know that. What other CEO has given you so much of their time? If I didn't you wouldn't have written, what, like 10 posts on Mahalo? You've done so much free consulting and marketing for Mahalo I think I'm going to send you business cards!!! I love you for it, although sometimes I hate the way you say things. Try and be nice Allen. :)
Now, when I post to LinkedIn or Facebook questions I have a fairly good idea of the answers I'm going to get. In fact, I'd say 80% of the ideas are simply confirming. I've been doing this startup thing for a while now... I know what the right answers are most of the time. However, I like to start discussions and see where they lead.
These discussions do a number of things:
1. You get confirmation of good and bad ideas.
2. You get people engaged in your business concept. Again, look in the mirror. You could write a book on Mahalo! You know almost everything about our company. What company do you know more about than Mahalo?!? Exactly. You're engaged and so are hundreds--if not thousands--of other leading minds. You're wondering "will this work?" That's all i need... your attention.
3. You get ideas that you might not have thought about.
Do you really see openness as some sort of sign of weakness... I don't. I see it as the ultimate strength. I'm not some God who is all knowing. In fact, my biggest strength as an entrepreneur is that I know i don't have all the answers. I know that there are better ideas outside of my head then in it... that's just the law of numbers. So, I go find places where people can debate those ideas and try and nurture the discussion around them.
You're thinking very CEO 1.0... the all-powerful God-like CEO. That's over with the exception of Steve Jobs who is, in fact, a God.
if a company can get opinions for free they would be foolish to not take advantage of that - public relations firms and departments pay a lot of money for that information - i charge people to think about what concerns them unless it is an environmental or social issue - i went to college for ten years - my thoughts are valuable -
Calacanis says that he answers all emails - he is not - he has not answered my emails. Furthermore Calacanis has STOLEN a drawing from my blog, removed copyright and placed on his server - a clear theft! And this guy preaches about being open community CEO? Lies!