How to get investors to buy into Social Media

This is a recurring theme throughout the last couple of years. Social Media continues to be a dalliance rather than fully understood commitment by the business community. This article identifies a key performance indicator that would trigger more investment both inside companies and from the venture capital community – having BOTH users and customers.

Here is a quote from an investor in this article to frame the discussion:

A social network that uses existing technology and simply focuses on an under-served niche market may well succeed. However, it is unlikely to produce the exponential value growth that offers the rewards to match the risk of early-stage investment.

It makes sense that a good social media strategy makes money targeting a specific market. However, there is a stepping stone from turning prospects in these segments into paying customers. This aligns with the process of nurturing relationships inside of a community of like minded people. Nurturing takes time and converting prospects effectively may take more than 3 months.

The real art of the nurturing process includes taking the user through the experience of solving business problems through some component of your product or service before buying what you are selling. At the end of the process, what has occured is education, confidence building and surety.

Most importantly, successful business makes it extremely easy for the prospect to say YES to the sales proposition. When products and services are technical in nature, there is a learning curve. Some of the more successful online businesses I have seen let the prospect sample the product gradually over time to get over that learning curve. Examples include Salesforce, Apple iTunes and

Click here for another excellent article on lead nurturing for those who want to delve into the concept more deeply.

The nurturing process creates a long ‘production line’ with prospects at different stages of the nurturing cycle, floating around the business and its converted customers like a swarm of bees to a hive. This production line of prospects represents a sort of oil well of money that, if tended to properly, promises an exponential revenue opportunity that goes beyond mere niche segmentation.

What did I learn from turning down Twitter? The companies that succeed will be the ones that offer value to both users and customers (there is a distinction) and, in doing so, create the most allies.

I remain positive about the potential of social media to generate dollars for any business. The fact that Venture Capitalists seem to get the value of social media removes one significant hurdle for funding growth in this space. The only remaining hurdle is for businesses to solve themselves, take the long term view and start getting it.


Rick Speciale
MyCMO – Director

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