Mikolaj Jan Piskorski
Associate Professor of Business Administration
Mikołaj Jan Piskorski, who often goes by Misiek, is an Associate Professor of Business Administration in the Strategy Unit at the Harvard Business School. Follow @mpiskorski on Twitter.
Misiek received his B.A and M.A. (Cantab) from University of Cambridge where he read Economics and Politics at Christ's College. Subsequently, he received his A.M. in Sociology and Ph.D. in Organizational Behavior from Harvard University. After completing his Ph.D. he became a faculty member in the Organizational Behavior area at the Graduate School of Business at Stanford University. In 2004, he returned to Harvard to teach the Required Curriculum Strategy course in the MBA Program. He is now teaching his own Elective Curriculum class: Competing With Social Networks. In addition, Misiek teaches in Building and Sustaining Competitive Advantage, Driving Digital and Social Strategy, Media Strategies and Strategic IQ Executive Education programs as well as in a number of custom programs.
Misiek is an expert on why and how people use various on-line social platforms, both in the U.S. and abroad. He also studies how firms can leverage these platforms to build social strategies. He also applied many of these insights to large organizations as they seek to become more agile and use social networks to execute their strategies. He has documented this research in a book called A Social Strategy: How We Profit From Social Media, forthcoming in May 2014.
His research has been published in Administrative Science Quarterly and Social Forces and cited in the New York Times, Business 2.0, and Investors Business Daily. He serves or has served on the editorial boards of several academic journals including American Journal of Sociology, Administrative Science Quarterly, Management Science and Organization Science.
A Social Strategy: How We Profit from Social Media
Almost no one had heard of social media a decade ago, but today websites such as Facebook, Twitter, and LinkedIn have more than 1 billion users and account for almost 25 percent of Internet use. Practically overnight, social media seems indispensable to our lives--from friendship and dating to news and business. So just what does social media give us that we can't get offline? Answering that question is the key to making social media work for any business, argues Mikolaj Piskorski, one of the world's leading experts on the business of social media. In A Social Strategy, he provides the most convincing answer yet, one backed by original research, data, and case studies from companies such as Nike and American Express.
Social Strategies That Work
Over a billion people use social platforms on the Internet, making them the most frequently visited category of sites. Some platforms, such as eHarmony, MeetUp, and Twitter, allow us to connect to strangers. eHarmony alone is estimated to account for one in six new marriages in the U.S. Other platforms, like Facebook or Renren in China, help us strengthen relationships with friends and acquaintances. In fact, Facebook boasts staggering 750 million users, and valuation in excess of $100 billion. LinkedIn does the same in the realm of business relationships.
These staggering numbers of users attracted traditional companies, which established Facebook fan pages or Twitter accounts to find new customers and engage existing ones. Although anecdotes of success abound, most companies found it difficult to engage customers or move the needle on sales. To claim success, some companies started to measure how many Facebook “friends” or Twitter “followers” they have, rather than by what really matters: profits.
In my research, I studied over 60 companies across a wide spectrum of industries, spanning the gamut from manufacturing companies, through consumer packaged goods, all the way to services and consumer finance, and examined why some firms fail while others succeed with using social platforms to increase profitability. I found that companies that failed to succeed on social platforms merely ported their digital strategies onto the social environments. Specifically, they continued to broadcast their commercial messages or sought feedback from their customers. Customers rejected these efforts, because their main goal on these platforms is to connect to other people, but not to companies. This isn’t hard to understand – imagine sitting at a dinner table with your friends when all of the sudden a stranger pulls up a chair and says “Hey! Can I sell you something?” You’d probably say no, preferring your friends over corporate advances. Many companies learned this lesson the hard way.
In contrast, companies that experienced significant economic returns devised social strategies. These strategies build better relationships between people if people undertake corporate tasks for free. Social strategies are thus very different from digital strategies in that they build relationships between people, rather than between people and companies. Social strategies are much more successful because they are much more consistent with users’ behaviors on social platforms. To return to our dinner analogy, a company with a social strategy sits at the table and asks “Can I introduce you to someone or help you develop better friendships?” This approach gets a lot more takers.
When Should a Social Platform Give People Fewer Choices and Charge More for Them?
Existing economic wisdom offers unequivocal advice to managers seeking to establish new platform businesses: Invest to acquire users as quickly as possible and make sure that they have unrestricted access to each other. Since the value of participating in a platform often depends on the number of choices offered, a platform offering unrestricted access should quickly displace a platform that restricts choice. After all, Facebook would not stay around for very long if it amassed a large number of users, but would then only let them interact with a small number of others. It would be equally counterproductive for a game console to build a large user base, and ensure that a large selection of games exists, only to announce that every user can choose at most five games. In both cases, a less restrictive platform would quickly eclipse the one limiting choice.
However, in some markets we observe that unrestricted-choice platforms do not win over restricted-choice ones. If anything, platforms restricting choice perform better in that they are able to charge higher prices than the unrestricted-choice platforms. This is very salient, for example, in the on-line dating market, where most sites give its members unrestricted access to all members. However, some sites, such as eHarmony, give its members no more than 7 potential dating candidates at a time. And despite offering limited choice, eHarmony charges up to a 25 percent premium over its closest competitor, Match.
Similarly, labor markets feature platforms, such as Monster, that offer unrestricted access to everyone. However, these platforms have not eliminated headhunting firms. The later offer very few candidates to firms, and expose candidates to only a limited number of firms, and yet charge more than the unrestricted-choice platforms do. Finally, in the housing market, buyers and sellers have the choice of using the For Sale By Owner database ("FSBO") or broker's services. Even though FSBO could give people broader exposure to everyone on the platform, it has not displaced brokers, who show only a few houses to a buyer, and expose every house to a limited number of clients. Academic studies have shown that broker-mediated transactions and FSBO transactions result in similar house sale prices. Given that brokers do not generate higher sale prices, but charge a 6 percent commission, they are the more expensive market option.
These examples present a puzzle for us to solve: How can some platforms offer less choice and yet charge more to participate?
In early 2009, Facebook was the largest global on-line social network, with 175 million members. However, it generated relatively little revenue from its advertising programs. The case asks students to consider two options of improving the top line. First, the company could deepen its commitment to advertising, particularly by using profile data to better target ads. Second, the company could help other businesses develop new on-line applications that used Facebook Connect- a second-generation platform released in late 2008. Connect allowed members to use their Facebook credentials to log onto third-party websites and bring their on-line social network with them, which can then be used to power social functionalities on these websites. For example, CNN used Connect to help people find their friends' comments, while the Starbucks community volunteer program used Connect to "spread the word." In the future, Connect could, for example, help friends coordinate their travel plans on Expedia. If Expedia could charge for such services, or use Connect to reduce its customer acquisition costs, Facebook could conceivably appropriate some of the value.
Understanding Users of Social Networks
If the ongoing social networking revolution has you scratching your head and asking, "Why do people spend time on this?" and "How can my company benefit from the social network revolution?" you've got a lot in common with Harvard Business School professor Mikolaj Jan Piskorski.
Only difference: Piskorski has spent years studying users of online social networks (SN) and has developed surprising findings about the needs that they fulfill, how men and women use these services differently, and how Twitter—the newest kid on the block—is sharply different from forerunners such as Facebook and MySpace. He has also applied many of the insights to help companies develop strategies for leveraging these various online entities for profit.
Networks as Covers: Evidence from an On-line Social Network
This paper proposes that networks can act as covers which allow actors to participate in markets while maintaining a plausible excuse that they are not. Such covers are most valuable to actors in long-term relationships, as those who are already employed or in a long-term romantic relationship should not be seen as participating in the market for a new relationship. Data in support of this view are provided on the basis of fieldwork and large dataset from a social on-line network with a global presence. Results show that men in relationships and with large on-line networks are more like to look at women they do not know. In contrast, single men with large networks are more likely to look at women they do know. Implications for network theories as they pertain to organizations are explored.
New Twitter Research: Men Follow Men and Nobody Tweets
Twitter has attracted tremendous attention from the media and celebrities, but there is much uncertainty about Twitter's purpose. Is Twitter a communications service for friends and groups, a means of expressing yourself freely, or simply a marketing tool?
We examined the activity of a random sample of 300,000 Twitter users in May 2009 to find out how people are using the service. We then compared our findings to activity on other social networks and online content production venues. Our findings are very surprising.