What the Twit - Is Social Media a Waste of an Entrepreneur's Time?
In an effort to build connections with other professionals, I opened my Twitter account in June 2009. I waited. I waited a bit longer. Gee, where were all the requests to connect? And, as I watched the comments on Twitter, I wondered how could I ever do this? I didn’t see value, and who had the time?
Three years ago, I decided that I would either grow from my 21 loyal Twitter followers to a number that wasn’t embarrassing, or I would close the account. When I shared with colleagues my goal to grow followers, they asked the question I most dreaded, “What’s the value of Twitter and growing your following?” Yeah, I dreaded that one. Dreaded because I had no idea what the answer was.
So, I began my quest, half cocked, half knowledgeable with the objective of finding value and growing followers or closing my account. I read a lot of online advice on growing your followers, and I even bought a book on Twitter. I still had no idea what I was doing.
Along the way, I discovered that there were some magic numbers with Twitter, and one number is (approximately) 2,000 followers. I learned how I could get followers, how to trim my list, how to tweet, and discovered there were tools to help me schedule future tweets. And today, you might be echoing the earlier question from my colleagues, “what’s the value?”
I’ve now got over 47k followers and the answer to your question is, “I’m still not sure.” As a blogger, I’ve tested whether I could get more views. It worked. Over one weekend from Friday afternoon until Sunday night I tested tweets about my blog and included the link so followers could read it. The results were positive with over 120 views and 32 likes. You’d think I would continue to test and refine, yet I have other things on my plate. My results are positive, but inconclusive. I’m no longer embarrassed by my follower number and need to refine how to leverage the value. It was the value question that came to the front of mind in my discussion with John Warrillow. John is the creator of the Value Builder System and author of The Automatic Customer: Creating a Subscription Business in Any Industry and Built to Sell: Creating a Business That Can Thrive Without You. John shares data that further inspires me to figure out my value for social media. As entrepreneur, this should motivate you, too:
We've just finished analyzing our pool of Sellability Score users for the quarter ending December 31, 2014, when we found some interesting data regarding the impact your social media footprint has on the value of your business.
To give you some background, we offer The Sellability Score questionnaire as the first of twelve steps in The Value Builder System, a statistically proven methodology for increasing the value of a business.
We asked 14,000 business owners if they had received an offer to buy their business in the last 12 months, and if so, what multiple of their pre-tax profit the offer represented. We then compared the offer made to an average business that has a large social media following.
Our definition of your social footprint is the aggregate total of your Twitter "followers," Facebook fan page "likes," Google Plus circle members, and LinkedIn connections. We even included email opt-ins to get a clear representation of the total number of people who have "opted in" to hear from either your company or its founders.
3.08 vs. 4.87 Times
The average offer received among all of the businesses we analyzed was 3.7 times pre-tax profit. However, when we isolate just those businesses with at least 10,000 connections, the offer multiple goes up to 4.67. If you have more than 100,000 people in your opt-in footprint, the multiple goes up to 4.87.
Likewise, if you have no followers, you're likely to get a steep discount. The average multiple offered to companies without an opt-in strategy was just 3.08.
GoPro – a Media Company?
To give you a dramatic example of how your social media footprint can affect the value of your company, take a look at GoPro. Before Apple won a recent case against it, GoPro was rumored to be an acquisition candidate for a consumer technology maker or a media company.
Wait a minute, did I say "media company"? Yes. Along with consumer goods manufacturers, GoPro is also attractive to media companies that want a play in action sports. GoPro owns the largest brand channel on YouTube with almost three million subscribers.
The GoPro camera technology is truly amazing, but one might even make a case that the GoPro technology is easier to replicate than GoPro's social footprint of almost 3 million YouTube subscribers.
Either way, the company's database of subscribers and connections is a strategic asset that will one day garner it a premium acquisition offer. While you may not be shooting for millions of followers, having a database of people who have opted into a relationship with your business will drive up the value of your company.
John got my attention with the value data. I’m encouraged to continue driving my social media outreach and engagement while looking for the most important value to Rhythm Systems. Are you aware of the media used by your clients and prospects? Have you determined social media value and how you can impact social media growth? Only you can determine whether social media is a waste of your time. You may dread the question just as I did, but the question is valid. Work hard to get the right answer. Join my conversations on Twitter @pinnman.
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