Businesses that ignore the call to be “social”–that is, to abide by a social contract with their constituents (customers, partners, resellers, employees)–run the risk of appearing pathological. I see “social” business as an inherently healthy change. Social contracts generally involve listening and talking, give and take, and trust–built over time through honest engagement.

From the department of tooting your own horn, allow myself to reference myself:

I think a firm’s success will come from it being able to act human enough to engage in [those collective affinities].

Which I wrote way back in August 2007, Friending the Corporation. I took the idea further and sketched out some possibilities in TIVO BFF!!!1.

Why am I bringing this up now? Facebook is making it real!

Last night Facebook turned on a feature which will surely build some buzz: the recommendation of brands as friends.

From the article Facebook Starts Recommending Branded Public Profiles.

Sure I might not use phrases like “crucible of collective agreement” but I definitely have better looking visuals. Ok I did use the phrase “collective affinities” but that was me re-quoting. And my pics are better.

“[Her] thesis is that organizations have their own kind of invisible structure. In other words, what you see on the flowchart of a company isn’t necessarily how the work gets done,” Carabetta explains. Stephenson uses surveys, data analysis, and elaborate charts to map out networks of relations that are often hidden.

There’re the usual sorts of findings:

“Evolutionary anthropologists always talk about a line of sight. You stand up on the savannas and you’ve got to be able to see great distances,” she says. “It’s the same thing here in the work space. You’ve got to be able to see out to others and see where it is you work, why you’re working there, and who it is you can interconnect and collaborate with.”

Plus some a little bit different:

The result is a layout based on relationships rather than hierarchies, with a design meant to foster interaction at all levels

That’s interesting. Which goes stale faster: a relationship or hierarchy? Depends on the job, the business, etc. etc. I suppose. Also, could this be the start of social network inspired architecture? Sign of the times but when I read “relationship” I immediately thought social networks. How awful.

Topspin is founded on the principle that while costs of production and distribution in the music industry are dropping, unlimited choice for consumers only increases the importance of efficient marketing. Marketing means both connecting and cultivating relationships with your existing fans (much of what Seth Godin describes as “Permission Marketing” applies) as well as discovering new fans. Topspin is building software tools to help artists market efficiently.

Topspin’s an answer to a question I’ve been thinking about off and on. The music biz isn’t about records, Sam Goody and Top 40 radio anymore. (And if it is for you still, be ready—things are changing fast!) To succeed as a musician you need to embrace the web, digital distribution, blogs, twitter, social networks, satellite radio and seamlessly transition from hyperlocal to global. How do you measure success? Is your marketing paying off? What counts? Radio plays? Downloads? Do you have the tools to even begin measuring success? How do you cultivate relationships with your fans? Touring sure. But where are you fans? Kevin Kelly had a great intro to this new world with his 1,000 True Fans scenario.

Madonna’s been making her own rules from early on and so it continues–she ditched the traditional music industry in 2007 and signed up with a concert promotion company:

“The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift,” Madonna said. “For the first time in my career, the way that my music can reach my fans is unlimited. I’ve never wanted to think in a limited way and with this new partnership, the possibilities are endless.”

Topspin is going in a similar direction:

One point I want to make clear: we are not just another digital distribution company. Our belief is there are some very good digital distribution solutions out there already, and digital distribution is quickly becoming a commodity. What’s not anywhere near commodity status is marketing, and we are a marketing tools software company. We are about demand creation, not demand fulfillment.

Not to overstate things but the unstoppable shift from Old World music industry to New World could very well start here with Topspin. One to watch for sure.

It seems the trend with successful CEOs (and some less so) is to post a long list of things and call them your “rules for startups.” You get gems like “NEVER EVER EVER buy swag” or “Fire people who are not workaholics. don’t love their work…” along with the ordinary new business penny pinching tips. Must be nice to have those sorts of problems.

If I did a list based on my startup experiences it would be pretty short. Just one item actually:

1. Find pain points and/or unmet needs in some current solution, fix them, have people pay you for the fix.

This is the hardest thing you’ll have to solve in your new business. Deciding on what sort of chairs and tables and soft drinks to stock will pale in comparison. Screw up Step 1 and you’ll be another small business statistic.

Since we’re on the internet, help (and more lists!) are just a search away. One of my favorites is from Evhead, Will it fly? How to Evaluate a New Product Idea. His first item, Tractability, is probably the weakest, don’t let it slow you down. The rest ask very pointed questions about your startup idea: How much value can you ultimately deliver? Is it clear why people should use it? And so on.

Foosball or table tennis? Where’s the official startup CEO decision on that?

The companies I have a relationship with are in my friend list. Look at all the great info I have instantly available: what’s on sale, similar companies, communication. If I get fed up with them, I hit the “Remove Friend” link and they’re gone!

If a company needs to talk to me, I decide on what terms. Gap’s been really needy lately so I’ll divert all incoming messages to a throwaway email address. TiVO, on the other hand, gave me a great deal on an HD box—text me as soon as it ships!

The history of my interactions with companies is recorded in either a credit card statement, a piece of forgotten email or worse, something printed and mailed. Who can remember when you last flashed a device? Installed an update? I’d sure like having a single aggregated view, available anywhere and safely stored at some remote secure location.

Pretty much always have an IM client going. Most companies will send some sort of email notification, but why not IM too? There’s a little bit of IM use among Yahoo, AOL, etc. But it feels disjointed, robotic and more focused on marketing. If I no longer want the Gap sending me stuff it’s gone from my “buddy” list. More control for me!

And frankly any “customer support solution” is a failure if it’s designed to keep you from speaking to a real human being. (Then again, that’s not always a good thing.) Why the 5-10 minute delay? The diligent customer service rep is looking through the chat history, getting up to speed regarding my problem.

So Big Corps, these collective affinities aren’t going to stand around and wait for you. Accept my invite or say goodbye.

David Schatsky, president of Jupiter Research one comment speaks volumes if we put it into context of the emerging market. He says “By paying closer attention to the tendencies of the end user, these sites will be able to evolve and meet the needs of a wider online audience.”

and

Individual allegiance moves away from portals, firms and toward networks and network platforms where individuals create collective affinities.

Explains the motivation behind new businesses like Satisfaction and their “people-powered customer service” idea. Aggregate the bottom-up efforts of an audience, harnessing their contributions (the Q&A, the social good vibes, the conversation, etc) and add a framework for pulling out ratings, reviews & answers for a company of interest. What you end up with, theoretically, is a better customer service experience than the company itself could provide. (As I understand it!)

My little epiphany: I think a firm’s success will come from it being able to act human enough to engage in those collective affinities.

Q: Tesco is famous for doing a lot of customer research with it’s loyalty program, the Clubcard.

LEAHY: It’s an important technical part of an even more important philosophy, which is to listen to customers—but really listen. Many organizations say they listen, but they’re very selective in what they allow themselves to hear. The great thing about customers is that they’re very honest people.

Another interesting bit from Leahy:

“Our team went over to live in the U.S. We stayed in people’s homes. We went through their fridges. We did all our research, and we’re good at research.”

AA Gill over at the Times Online has a lot to say about the new Whole Foods recently opened in London:

“The largesse of this born-again, healthy, feel-my-freshness emporium exposes one of those great rifts between Americans and us. Americans like quantity. The sight of towering displays of fresh food, a carnage of meat, oceans of fish, a sugary cornucopia of buns and breads, and vast wheels of cheeses, fills them with a sense of wellbeing and comfort.”

And more from Lisa Armstrong’s piece:

“First, 80,000 sq ft looks thrilling when you walk in but it is simply too big. I couldn’t find anything on my list, partly because Whole Foods isn’t laid out like a traditional UK supermarket, and partly because products are arranged according to country of origin. And no, I don’t know where tahini comes from.”

The U.S. Tescos aren’t open yet but I’m looking forward to them. Will the reaction be as strong as the British with their Whole Foods?

Travel back a century to San Francisco, it’s 1904, and A.P. Giannini has just raised $150,000 from friends and family to open the Bank of Italy. At a time when banks were for the wealthy and the businessman, his ideas for the Bank of Italy were radical. The great empathy he had for his clients meant the bank was going to be open on Saturdays. They accepted small deposits and let folks open accounts with little money. He gave home loans and extended credit to recent immigrants. He recognized an unmet need in his local community and designed a service to meet those needs. A classic “design thinking” story.

So pulling these two little anecdotes together, under Giannini, Bank of Italy begat Bancitaly Corp which turned into TransAmerica Corp which, in the 1950s, turned into Bank of America. It’s a bit difficult to wax poetic about a corporation worth around $600 billion but I certainly think the spirit of A.P. Giannini lives on in that Keep the Change program.

Now it’s one thing to hear the putt putt of a Prius sneaking up behind you. But when you think high performance, you think Italian or German right? I also have a pretty visceral reaction to the sound of those cars; a finely tuned engine can sound beautiful. What’s a Tesla Roadster sound like? I’ll miss that purr. Unless its replaced with something else, something emotional, primitive. Maybe the exhaust could smell like a steak cooking on the grill? That’s an even trade I think.

Thanks to Metacool for the lecture announcement!

“I see Wufoo as part of a broader trend – the gradual outsourcing of all routine development and administration to more efficient plug-together-and-play solutions. In a year or two, all the little start-ups run by two developers and no business types will start to get eclipsed by little start-ups run by two business types and no developers.”

This is the missing business piece behind all the trendy “web 2.0” ajax/whatever apps. Their success depends on an ecology of data access. Pretty tools like Wufoo make getting the data attractive and fun. Other tools and services, like my old boss Paul Martino’s Aggregate Knowledge, adds intelligence and value to the data.