Tuesday, February 18, 2014

Whisper? Ask.fm? Here We Go Again!

New networks, apps and technologies pop up all the time. Some recycle a tried and true business model – allow or encourage hate, cyberbullying, cyberharassment or hype. It might not start out as a strategy, but once the management discovers that negativity is very popular and will draw new users, it becomes the default.

We saw it after Murdoch bought MySpace. We saw it with FormSpring and Honesty Box. We saw it with Juicy Campus, and many more. The one thing that management may not understand is that negativity and the network that’s sole draw is allowing negativity to foster have a short shelf life.

MySpace is now only a sparkle in Tom’s eye. (If you don’t know who “Tom” is, I’ve made my point!) Juicy Campus was shut down for fraud by two attorneys general with our help. FormSpring is abandoned by most users. And Honesty Box died a quick death.

The kids find these first. Their business model may be built around honest appraisals of consumer products or allowing someone to be anonymous when asking or answering questions. But once the kids find it and abuse it, the model changes.

When most start-ups are funded, risk management is often forgotten. It is always underfunded. And few managers understand how to build a safer network. And with a quick growth (MySpace grew from 6 million users to 50 million users in 6 months!), little time is allowed for managing risk. There is little incentive to clamp down on user-generated-abuses, harassment and cyberbullying, since the ability to misuse the network is the main reason for its popularity and stellar growth.

Parents sign petitions. Legislators hold hearings. Consumer and privacy protection agencies investigate. The pattern is clear. But unless the network’s investors or banks or insurance providers insist on the adoption of best practices, or unless we can find a legal hole that allows the network to be shut down or heavily fined for its practice, it merely dies a slow death like all the rest of its kind.

Ask.fm is in our crosshairs now. Its management has a choice – do it right or face the same demise as the others before it. Facebook grew based on its not being MySpace. It’s easy to see the difference good risk management makes in long term growth and user-adoption. Here we go again.

We hope that Whisper doesn't follow its lead.

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