What’s Next For Social Software Startups?
December 28 2011 02:45:00 PM
Add/Read Comments [6]
When I left IBM to work at Socialtext in 2008 one of the reasons was that "social software" was really heating up and the startup world seemed far ahead of software companies like IBM and Microsoft. By being more agile then the big vendors startups like Socialtext, Jive and Lithium could emulate the best of the consumer web and deliver similar features quickly to customers. The target market was typically SMBs or departments within a large organization who were looking for innovative ways to improve collaboration over the company mandated tools that were struggling with. Next when Facebook and Twitter became household names the startups evolved adding better community features, fancier profiles, dashboards for intranets and most noticeably microblogging & activity streams. Vendors like Yammer, Socialcast, Tibco, Moxie and ToughtFarmer emerged providing even more choices for customers and put increasing pressure on the original 2.0 vendors. But where are we now? Unfortunately I saw very little innovation from startups in 2011 and instead saw a lot of movement from the software giants. As we come to the end of 2011, I have several questions/concerns about what comes next:
- Does the innovation gap between startups and the big vendors (wrt social software) still even exist? Or, have IBM, Salesforce, Oracle, Cisco and even SAP caught up and perhaps passed the startups by? What about Google, will they make an enterprise splash in 2012? Will Microsoft ever figure out how to make SharePoint social?
- With company wide deployments (vs. departmental projects) becoming the norm, do factors like scalability, security, integration, language support, compliance and accessibility fall more into the sweet spot of the big vendors than the startups?
- As purchasing decisions move from the departmental level to CxOs in the boardroom, does this affect vendor selection?
Don't get me wrong, I'm not trying to predict doom and gloom for startups, but I do think the time has come for a pivot in what they make. Startups, once the kings of social software need to be fearful that their reign over the lands could be fading as the giants awaken from their slumber.
Startups need to return to developing products that the large vendors are not in order to regain their competitive edge. Yes there are areas like gamification, location based services and analytics that some startups are still ahead on, but those things are soon going to become table stakes the way blogs, wikis and streams are today.
I'm hopeful that towards the end of 2012 I won't be writing about the same old collaboration topics and that something new will have emerged. I'm sure that several awesome new ideas are gestating within the brilliant startup world and I look forward to seeing them come to life.

No you are right as I was just covering the slew of small niche startups closing. There has to be an very large need to fill to make a new one catch on.
{ Link }
Hi Chris. Well I'm certainly not hoping to see vendors close down (but of course some will) so I hope some can either a) find a niche that works for them like a specific vertical industry b) continue to innovate and stay ahead of the big vendors in social software c) pivot to work on something emerging to once again fill a gap that the big vendors are not supplying d) get acquired and live happily ever after.
Hi Alan, a comment like you asked.
First of all, I'm sick and tired of people comparing the old enterprise legacy world to nimble startups and vice versa. Benioff is the biggest one of those and most to blame: he left Oracle to get the benefits of a greenfield situation, and now finds himself in midfield after 10 years. Why didn't he just improve Oracle and turn it into something Facebooky?
A big mouth, 2 billion in revenue and not a penny in profit: let's please stop listening to this man. Please
Second, to your post: I don't agree with it at all, in fact I called it crap twice in one tweet. You and Frank asked for elaboration so you're in for a long story
Social Software - what is it? Twitter, Facebook, G+?
I evaluated a few socalled SCRm tools 1.5 years ago ({ Link } ) so that's july 2010. Lithium? A platform linked in to Twitter and Facebook, with some functionality yet missing management and control
Jive had a mature platform back then, able to draw in significant action - but like Lithium they considered themselves the centre of the universe
Socialtext is (stil)l a mocroblogging tool with sharepoint and SFDC integration
And that's it. All of those are focused on SMB's like you say, and if there's one thing that SMB's don't need nearly as desperately as big enterprises such as IBM, it's social media / tools / business. So you have the startups targeting SMB's, and "software companies" targeting enterprises and (multi)nationals. Speaking of which...
I can only assume you mean one and the same with software companies, big vendors, original 2.0 vendors, software giants, giants, and large vendors. I wouldn't qualify IBM, SFDC, Oracle, CISCO and SAP as all of the above but neither would I group them together
Startups aren't agile. Startups simply profit from a greenfield situation. Tibco didn't emerge as a startup, it's been around since 1997. I assume you mean one of its products, tibbr, mistaken by everyone as just another social tool so not giving you a hard time there
"I saw very little innovation" - granted. "I saw a lot of movement" - not granted. First, how can you compare innovation to movement? What's the goal of that? And can you please explain what "movement" you saw? I didn't see a thing
The questions you ask in the next paragraph, contradict your findings - you did see a lot of movement didn't you?
Then, you jump into market and implementation. It appears as company wide implementation (of social tools, I presume) is becoming the norm or has done so already. Would be nice to have a link on that, or just a small elaboration. Or an introduction
The questions you ask are good: scalability, security, integration, language support, compliance and accessibility will be the real issues, and the simple social stuff just a boring afterthought. Hey even I can write Twitter and Facebook API's.
The answer, however, is neither IMO. The new kids on the block have no idea about these issues (save tibbr), yet the old vendors have no idea about user experience and consumer / customer handling in the wild
I doubt purchasing is done from the boardroom now, maybe some but certainly not a vast majority, but yes that will affect some outcomes - although the demand side has changed level as well: cost and customisation involved is drastically different
But the epitome of your story is here: there's a movement by the old vendors that's bringing them on par with startups (we'll have to believe you on that), deployment are going / have gone company wide, thus buying decision lies with CxO
And as a cure for that you advise product development by the startups - without naming a single one.
And you gather gamification, location based services AND analytics under "table stakes" - well excuse me but you must be either psychic or psychotic
Alan, this article is not the least sense-making article I read in the entire year 2011, but it is the article that made so little sense that I actually bothered to write a painstakingly long comment.
Thank Frank Scavo for that
My comment is actually 1.5 times as long as your entire post - that's an incredibly bad sign. For both of us
Hi Martijn, thank you for taking the time to comment as you're certainly entitled to your opinions and I appreacite you sharing them. I'm happy to address many of your points.
"Social Software - what is it?" - I consider it products that help people work openly with their colleagues and community.
"Socialtext is (stil)l a mocroblogging tool with sharepoint and SFDC integration" shows me you don't know the product at all. Socialtext's microblogging component (called Signals) is actually just one component (and the newest at that) of the product. Socialtext provides wikis, profiles, groups and dashboards. Don't forget, I was the Director of Marketing at Socialtext so I think I know the product quite well.
I did not say that startups are still focused on SMB. I said they originally were as that's the market that was first looking for social software solutions. Now that social software is more mainstream large organizations are looking at which vendor to choose from.
I clearly see a distinction between the IBMs, Oracle and SAPs of the world vs companies like Jive, Moxie and Yammer. That distintion is also very clear to the customers I work with.
True, I was referring to Tibbr as a product, but to be consistant I mentioned the parent company Tibco, similar to how I mentioned IBM (not Connections), Oracle (not OSN) and Cisco (not Quad)
What movement did I see from the big vendors? Gees, that's pretty simple. IBM created a FISMA compliant datacenter to serve US government customers plus acquired 3 analytics companies who's features will help augement their software. Oracle launched OSN and acquired Endeca and RightNow. Cisco released QUAD. SAP launched their OnDemand offerings, StreamWork and acquired SuccessFactors. I could go on and on but I think it's quite clear the big software companies did A LOT this year.
Your statement "the new kids on the block have no idea about these issues (save tibbr), yet the old vendors have no idea about user experience and consumer / customer handling" sounds like something I would have heard in 2009/10.
"I doubt purchasing is done from the boardroom now" - I'd say 90% of the customers I spoke with in 2011 had a CxO level sponsor for their social software projects. The days of social software being a LoB decision have passed. Perhaps things are different where you live.
I don't understand your reaction to my comment about gamification, location and analytics. Do you not think these features will become part of every social software platform? Every vendor I speak to is adding them so I don't think I'm psyhic, I think I'm just well informed.
Once again, thank you for your comments.
We always do trust you to do the best possible for all of us, I call and I talk to the same dear people every time I need to.
The way we think about privacy today is going to be drastically different than we do in 20 years. For good or for ill.