Spotlight on social media entrepreneurs – how they're making millions from YouTube, Instagram and more
Friday 30 September 2016
In the first of a two part series looking at tech entrepreneurism, Dr Aleksej Heinze and Alex Fenton, digital business experts based in the Business School at the University of Salford, take a look at how social media entrepreneurs become successful.
1. How are social media entrepreneurs ensuring their success?
Aleksej Heinze: It depends on the individual but there are a number of business models which work on social media. These can be broadly divided into strategies that rely on Market Research, Marketing, Sales, Operations or Support. Some organisations such as Public Desire - as features in a forthcoming book on Digital Marketing (http://www.amazon.co.uk/Digital-Social-Media-Marketing-Results-Driven/dp/1138917915); use social media to research market needs, develop products and serve the market all within hours of a product idea to be made available. For example, Salford based Public Desire use the likes on their Instagram account (https://www.instagram.com/publicdesire/?hl=en) with 870k followers to see if a new design of shoes is of interest to their customers. If a particular design gets a lot of likes the shoe is put into production. If a design is not attractive that one will be dropped from production. Vloggers (video bloggers) on the other hand use their follower numbers to convert into brand exposure for organisations that want to engage with a new digitally savvy audience. This includes things like a “shopping haul” where a vlogger goes shopping for a particular brand and talks through their purchases. It is a way of engaging new audiences and getting exposure to new markets which in turn increases the chance of product sales.
2. Do you have to focus on specific sectors to ensure your success?
Aleksej Heinze: Yes, not all sectors have people who would engage on social media. The construction sector for example in the UK is one of the slowest to embrace social media. On the other hand, hospitality and tourism in particular with international customers is made or broken through social media services such as TripAdvisor. There are of course national and international differences in terms of which social media networks to use for what country. For example, if you are trying to reach out to Chinese audiences where networks such as Facebook and Twitter are blocked these would certainly not work. So, it is important to research and understand your target audience before any social media activities are invited in. Generally speaking most of Europe in a business to consumer interaction would benefit from communications on Facebook. For sectors relying on business to business interaction networks such as LinkedIn would work in most European countries but not in France and Germany. In France a popular professional network is Viadeo and in Germany it is Xing. So, even within a sector national differences need to be taken into account.
3. Which businesses are doing this well and why do you think they're achieving success?
Aleksej Heinze: Public Desire from Salford are a great example. They are tuned in to their target audience - who are passionate about shoes and want to have a different pair of stylish shoes every month. The reason for their success is that they are in a niche of “fast fashion” where it is all about getting an idea implemented fast in reality and social media offers this immediate feedback for market research to see which products would sell. Social Chain is another Manchester based start-up where average age of all of its employees is reported to be around 21. They are successful since they have individuals who engage on social media for fun and who are passionate and skilful in online storytelling using social networks. They are achieving this by understanding the target audience and the way that these audiences like to engage with brands.
Alex Fenton: Wakelet.com from Manchester are an excellent example of local social media entrepreneurs. They have obtained substantial venture capital to build their own platform which helps people to curate the web in beautiful collections. The company was built through local connections and new employees found through LinkedIn. Wakelet allows collections of information to be made called ‘Wakes’ and these can be shared through social media or embedded into webpages. All of the digital and social media agencies we work with have experienced substantial growth over the last two years. What all of these companies have in common is that they apply hard work, creativity and experience. The best ones always find time to get out there and share best practise - whether it be awards, guest talks or networking events. Sharing and networking online and offline are important.
4. What do you think that the future will hold when it comes for these social media entrepreneurs
Aleksej Heinze: By their very nature entrepreneurs like to experiment with new ideas and some will exit and experiment with new business ideas, others will carry on evolving and developing their existing organisations. As with any competitive advantage those who are first to innovate are subject to being copied by others, this means that their competitive advantage has a limited shelf life unless they carry on innovating and being ahead of their competition. So, some of them might need to diversify to stay competitive and if they don’t get bought out they might need to buy their way to keep on top of the game. The extreme examples of tech entrepreneurs such as Facebook show us that even innovative organisations don’t have all the answers and have to go shopping for new ideas to keep up with the demands of consumers and be current and relevant to their users.
This was first published in Manchester Business Week 29/9/16
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Sam Wood
0161 295 5361
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