August 19, 2008

Specialized Perceived Value Trumps Real World Value

If you've attended college, or at least know somebody who has, you know that students are willing to pay hundreds of dollars a term for some of the most mind-numbing texts alive. Students will wait in line for hours, or go store to store to acquire these textbooks, which might only be available in one location, knowing that to not pay these exorbitant prices and, therefore, miss out on the texts, could lead to lower marks, and potentially, decreased success in school and just maybe post-school, could be disastrous.

But these same books, worth hundreds of dollars to an individual, are worth absolutely nothing to me. You couldn't get me to take those blasted tomes for free - because to me, they have no value. They would clutter up my house, and I'd probably never open them up. (Of course, I didn't open most of them in college, and that's a different story.)

Outside of the world of publicly traded companies and market caps, the value of a service is very much like these same textbooks. What might have ultimate value to one person may have no value to another.

Just imagine dropping off iPhones in the Amazonian jungle or Sub-Saharan Africa, where 3G is a lot less important than three meals a day. Think about the plans of the last few decades of delivering one computer per classroom, when class capacities were ballooning to nearly forty students. After a while, it's clear, there's a gap between one person's perceived value, and that item's actual value. The same, is of course true with online services.

Ever try to explain social media or social networking services to people who don't rapidly take to putting their lives online? It's a tough road, especially if they don't have friends who use those services, and see keeping their online life updated as a significant time sink. But to someone who is fully engaged and has thousands of followers or friends at some of the popular services, even minutes of downtime are alarming.

Students who buy these overpriced, one time use only textbooks, and actually read them, are doing so with the expectation that their future lives will be bettered through investment today.

Similarly, I believe that taking the time to blog, or read RSS feeds, and engage with peers on Twitter or FriendFeed or SocialMedian can improve my experience today and tomorrow. Through these services, I've learned new things, I've shared ideas, and helped others. I've found new friends and peers.

It's not always clear how investment of time and energy in social media will benefit you in the long run. As Robert Seidman mentioned in a post here over the weekend, activity on social media landed friend Hutch Carpenter a new job. And since engaging on this blog, I've started receiving a good number of opportunities to meet interesting people, to speak at or attend conferences, and to help contribute to some cutting-edge services.

This weekend, I walked my mother through some of the services I use, and while there was some interest, most of the response was "why would I do that?" or "how would I find other friends who use these things?" Not every service is built for every individual. It's likely the Facebook application developers who are finding themselves snapped up for nine-figure sums would never have gained traction with a significant portion of the market, who saw their products had no value. It's likely many of the services I use every day won't be seen as having value to others. But the important thing is that to some portion of the population, they are crucial. The game is finding out which part of the population it is, and working to make that target larger.