The New Value of Information
Its all aboard for Twitter's IPO [Source: http://www.youtube.com/watch?v=jXNqG1YXbuI]
There's an old proverb that says: "May you live in interesting times." For those of us who are alive today - creature of the Information Age - it can't get more interesting.
Take the story of Twitter, for instance. The company recently made headlines all over the world because of its red-hot initial public offering. Essentially it was a Web-based service that offers micro-blogs to hundreds of millions of followers around the world. And when I say micro, I mean it: No tweet can be longer than 140 characters.
That said, Twitter arguably stands as the most interesting product of the Information Age. I propose this point because if we as a society value information, then it's certainly a feat for a company that delivers such small doses of it at a time to be valued so highly by the market. Twitter had a market capitalization of some $14 billion just a week after its IPO. If put in the context of one tweet, that's nearly $825 million per character! In fact, Twitter's stock price has never dipped below $39. With nearly 473 million outstanding shares, the company's market capitalization has never been less than $18 billion.
It's not just the usual suspects who utilize Twitter. Princes, popes, prime ministers, and presidents use it. We all seem to have a penchant for relaying, as succinctly as possible, the minutia of our daily lives to the rest of the world. Who would have thought the concept behind this company was even possible ten years ago?
The light-speed by which tweets entered the daily vernacular is a testament to how entrepreneurs can create a smarter organization. We often give lip service to market disruptors and creative destruction. Indeed, in the case of taking an existing technology and transforming it into something new, the Internet seemed to be played out. But then came social media. That, too, seemed destined for market saturation and maturation by some keen players (Facebook among them).
But what Twitter's founders did was to take a big picture view of that market and simplify things in a very elegant way. What the world had in 2006 - the year of the company's founding - were plenty of long- and medium-form information sources. What Twitter did was to tap into the desire for information presented in its most basic and elemental form.
During the past few months, Infosys has undertaken two notable surveys into 1.) the evolving nature of the digital consumer and 2.) how retailers can create ideal stores around them. Both surveys demonstrate the need for savvy enterprises to address the expectations of their consumer base. A digital customer is worth a lot more then the traditional kind, mostly because he or she can offer an organization a lot of information. To get that valuable information, organizations must give their customers something in return.
That return gesture might consist of something simple, like notice of a special sale or a rebate on certain pieces of merchandise. Those gestures go a long way, however, in cementing customer loyalty and creating more opportunities for the organization to grow. One of the reasons I watched the recent IPO of Twitter with keen interest was because of that company's value proposition - the value of information.
Information has such value because it's a two-way street. Because of innovative digital tools and solutions, parties on both ends of a relationship (in this case, a Web service and a micro-blogger) allow each other to get perspectives on what motivates them. In a bygone era, enterprises were in the position to tell consumers what they needed. Now they need their consumers. Enterprises recognize the power of the information that their consumers possess.
In the case of Twitter, we get insights in small nuggets. But because the digital marketplace is all about doing more with less, those small nuggets add up to something big. Think about this: Twitter has never turned a profit, yet investors value the company in the billions. They're putting a price on the potential of the organization. I have no doubt that a smart organization with the right digital solutions will live up to that potential.