Building a Social Commerce Site – A First Hand Experience

This blog post will be part of a string of articles related to Social Commerce and my first-hand experience at designing and building one of the most compelling and unique Social Commerce sites for the music industry. As for the details on this site, you will get a chance to see it publicly within a month and experience the rich media, content and social commerce model it delivers. Stay tuned!

To first set some perspective and align your understanding of Social Commerce, below are details on what Social Commerce is and the current opportunity in the market for e-Commerce sites to pursue it.

“Social commerce is a subset of e-Commerce in which the active participation of customers and their personal relationships are at the forefront. The main element is the involvement of a customer in the marketing of products being sold e.g. recommendations and comments from customers.” and the eventual monetization of this process through the sale of a product – Wikipedia

Your typical e-Commerce site converts at 2%. Meaning, an average of 2 in 100 people purchase products when visiting an e-Commerce site. Sounds unrealistic doesn’t it? Well, it is mostly true – granted sites like Amazon, Eastbay and NewEgg do much better.

Social Commerce models will help break this barrier by engaging buyers with entertainment and rich community content to keep them online longer, therefore increasing the conversion rate. The longer a user is on your site being entertained by video/photo/testimonial reviews of products, the more likely they will eventually buy something.

Taking this a step further, let’s take a look at the evolutionary steps of online commerce. Brick-and-mortar stores in the early/mid 1990’s started pursuing an online presence with e-Commerce sites and online catalogs. This led to the massive growth of online commerce during the Internet bubble with sites like Amazon for example, offering a wide variety of products for sale online.

The whole concept of shopping from your home or office was a breakthrough – not needing to go to the store and hassle with lines, low inventory etc. became a thing of the past.

The past 2-3 years have been shifting online commerce into a new evolutionary phase. This phase is driven by the fact that online commerce is unable to get anywhere close to the 70% offline revenue generated by brick-and-mortar stores. But why is this?! Well, simply because 2% of online shoppers actually buy something when visiting an average e-Commerce site, and also because e-Commerce sites are not “sticky” – meaning they are not engaging.

The current state of e-Commerce sites are that they act as online catalogs with some features of user participation (e.g. reviews, ratings and comments). Clearly not enough to keep buyers entertained. Alternatively, if you walk into the Apple store, for example, you are entertained and engaged – this keeps the customer in the store experiencing the product physically and sharing experiences with others. This enhances the emotionally-driven shopping cycle that attributes to 70% of offline revenue being generated by “product discovery”.

Product discovery is driven by advice from friends, feeling and trying a product out, learning from others what their experiences are etc. Social community sites that generate this content (e.g. Engaget, DP Reviews etc.) generate the online content necessary to bridge that “product discovery” experience. The future of social commerce is about blending content that these sites generate with an e-Commerce model – keep the buyer engaged, and provide that instant buy-now capability.

Now for some interesting numbers…

In an IDC estimate, social networks only made about $400 million in revenues in 2006, but could make as much as $1 billion in 2007. AC Nielsen also noted that nearly 40% of Americans say they participate in online communities, with sites around hobbies, shared personal interests, and health-related issues among the most popular. All these numbers point to signs of an emerging online market space.

Well, all this ideas and numbers are great and fantastic, but how can we get it done?

The answer lies in technologies/solutions that are already available, and were in fact used on the soon to be launched site.

There are several advanced e-Commerce platforms that offer the out-of-box functionality needed to put a store online almost instantly. Products like AspDotNetStorefront for small to mid, and soon large, sized businesses, MediaChase ECF for mid to large size businesses, and Microsoft Commerce Server for large to enterprise businesses.

Taking these platforms and blending/merging them with Community Server, allows you to leverage the community aspects/features into the e-Commerce model. Product reviews, videos, photos, forums, live chat and much more will help add that “stickiness” to an e-Commerce site and break the 2% barrier that many e-Commerce businesses are striving to breach.

From a technical aspect, these types of blended products will provide single sign-on and unified accounts, seamless community-to-commerce and commerce-to-community purchasing and publication processes, integrated administrative interfaces and highly customized and extended applications running on a unified SOA model.

In conclusion, there is a great market opportunity picking up steam, and solutions out there that can be leveraged to provide for a social commerce platform.

In my next post, I will present the project/site I worked on and discuss the technical solutions used to deliver it.

Saving Money with Technology

Below is a list of interesting tools you can use today to start saving money – especially during these tight times.

Firefox Tools

RetailMeNot automatically pops in to let you know when a site you’re at has freebies and discounts available, while PriceDrop adds buttons to Amazon.com’s item pages to help you get notifications when prices go down. If you’re more prone to random browsing for killer discounts, the Woot Watcher helps you get the jump on those ridiculous deals on random items at Woot!. Make it hard for yourself to pay full price, and bank the savings however you choose.

Personal Finance and Money Saving Tools

> Mint
> Yodlee
> Wesabe
> PearBudget
> MyGallons
> BillShrink
> SaleGasm
> Lastly, the Golden Money List

iPhone Applications

And for those of us graced with the iPhone…

> AccuFuel
> FuelGauge
> Gas Hog
> CarStat
> Where

The Truth About IT Hiring

Do you remember the good old days during the Internet boom when a shiny resume, clean haircut and a vast vocabulary of IT acronyms was enough to get you a six figure job at a fast moving Internet company with a half-life of less than a year?! Well, those days are long gone now… At least in the specific technology field I am in.

Here are some tips from past experience when trying to hire a developer, technical architect or a super ninja coding monkey (that’s a large visual to absorb, I know .

Developers

> If during the phone interview he answers yes to every questions, including “Do you enjoy drinking Snapple and Red Bull cocktails at 2am while re-writing another developer’s source code?”, there could very likely be a severe problem with his work ethic and level of productivity. Why? Well, any developer that works odd hours will most likely not be productive on fast moving agile-like projects that require a functional and cohesive team during normal work hours – well, unless he/she happens to be outsourced out of Estonia (yes, there are developers there now).
> Good developers talk less, and produce more. When you are in a meeting with a developer and he starts questioning every architectural decision and going off on a tangent, it is likely when it comes to actually write code, there will be little produced. This is also a double-edged sword, since developers that sit in silence and don’t ask the write questions can be a sign of a severe lack of understanding as they wander off into building an application that can process prime numbers faster than any application ever known to man kind – when he should have just been creating a tax calculation module.
> “What is an object?” is one of the most feared questions from a developer – seriously, if you hire a sharp developer he/she better know what the heck is object oriented programming. The last thing you need is every business object, method, function and (oh yes, HTML renderer) packaged into a single .ASPX file. Give me entity classes, business objects, a data layer, and a clean extensible object model that we can leverage into a SOA model if we need to.

Technical Architects/Lead

> Are you a technical “architect” or a technical “lead” – the two differ greatly. What you need to look out for is anyone claiming to be a technical lead “designing” the “solution” and “leading” “the team”. These candidates are 90% of the time PMs gone AWOL claiming expertise to design a solution, when in fact all they do are PM duties with business requirements gathering, and client interfacing skills.
> A good technical architect will tell you the difference between an apple, orange and pear, and give you specifics as to why each would work best with a hearty breakfast. No, but seriously, technical architects need to have “big picture” understanding, all the way from the physical to logical layers, and beyond. They are the masters of designing sound solutions, and gifted in interfacing business with technical teams to achieve a common goal. Architecture is a constantly moving/changing machine, and TA’s need to be in motion with what changes, how, and what the best approach would be in order to avoid chaos, lack of scalability, and secure continuous integration with all other systems.
> Document! Document! Document! Good TAs create good documentation, with clear implementation diagrams and descriptions, using well defined frameworks and patterns. They need to constantly communicate these documents to both business and technical stakeholders, align their understanding of them, and update them regularly to keep everyone up to date. If a TA has not been a project that produced more than 100 pages of design documentation, it is very likely that he/she does not have the depth/expertise as a TA.

Super Ninja Coding Monkeys

> These developers are hard to find… Did I say they are hard to find? Right… Well. The trend, given the enormous “brain drain” of Western civilization over the past 3 years, seems to have pushed levels of intelligence farther in countries like India, China and Russia – with the latter being a rising star of some of the world’s best developers.
> Complicated last names are a sign of a SNCM – a common joke amongst Indian developers, but given the history, I can see it…
> Good, clean, efficient and well remarked source code is a positive sign of a SNCM – if one out of ten developers can re-write 100 lines of code to 10 lines, they are definitely worth considering.
> Lastly, developers with C++ experience are definitely SNCM candidates… Looks for developers with at least 1-2 years of C++ experience on decent sized projects.

In short, remember to use some of these basic rules, combined with whatever other tools/resources you use for IT hiring, and always try to meet in person (if possible) and white-board the candidate to understand his/her thought process, candor and ability to make swift decisions under pressure.

Good luck to you all out there!

Development Best Practices

Leverage Internal Methodologies and Frameworks for Designing Applications

> Use existing examples of documentation from other projects.
> Use cases, detailed functional requirements and high-level business/entity objects.
> Enforce database design practices (e.g. ERDs, data models etc.)

Stub Generation and Low-Level Design Documents

> Technical meeting to review all requirements and scope low-level documentation requirements.
> Oversight by tech-lead/senior-dev/DBA during design or development phase.
> Document entities, data application layer, business logic layer and presentation layer.
> Create activity diagrams and sequence diagrams for application flow and object interactions.

Sign-off by Developer per Task

> Developers should fully understand all design requirements, and tech lead should enforce.

Code Review

> Code review as per development standards/methodologies.
> Tech lead should ensure architecture is scalable, extensible and modular.
> Tech lead should ensure proper source code versioning, branching and commenting/documenting.

Testing

> Create manual test scripts for the site and follow them for system and regression testing.
> Developer should test on latest version of IE, Firefox and Safari for basic browser compatibility testing.
> Create and enforce automated unit-tests and test scripts for custom development using tools like nUnit, SQLUnit, Visual Studio Test projects.

Standardize Output

> Enforce development tools across on-site and off-shore development teams.
> Enforce a library/framework based on design requirements.
> Tech lead should leverage UML and modeling tools (e.g. Enterprise Architect, Rational Rose etc.)
> Tech lead should be fully responsible for managing all builds and enforcing rules with team (e.g. branching, tagging etc.)
> Use collaboration tools like Team Foundation Server and Sharepoint to track issues/bugs across team members.

How to Introduce New Ideas and Technologies

Ideas vs. Technology

> Ideas can be driven by a new technology
> Ideas often come from a “community” within the company
> Ideas require a higher level of research and development
- What does it mean? Who does it affect us? How will it work?
> Ideas can create more change within a company than a technology
- Affects multiple levels within an organization
- Requires deeper participation with employee population

> A technology can be selected to fulfill an idea
> A technology recommendation can come from anyone within an organization
> A technology requires a lower level of research and implementation
> A technology can usually only affect a single group within the employee population
- Project Managers
- Developers
- etc.

Selecting the Right Idea

> Concept Screening
- Comparing options against a baseline benchmark.
- Compare against factors like cost, reliability, time etc.
> Delphi Method
- Explore ideas or gain consensus with remote group.
> Force-field Analysis
- Exploring forces for and against an idea (pros and cons).
> The Hundred Dollar Test
- How will you spend $100 on your ideas?
- Select the idea that best matches your budget.
> The Kipling method (5W1H)
- Ask simple questions for great answers.
> Negative Selection
- Sort out the ‘definitely nots’ first.
- Must Haves, Maybes, Can Live Without etc.
> NUF Test
- Score idea based on how New, Useful and Feasible it is.
> Pause
- Reflect for a minute before deciding.
> PINC Filter
- Evaluate Positives, Negatives, Intriguing and Concerning elements.
> Six Thinking Hats
- Look at ideas from different viewpoints.
- Information, Judgment, Creativity, Intuition, Optimism, Thinking.
> Swap sort
- Sorting a short list by priority swapping.
> Voting
- Democratic casting of votes for the best idea.

Selecting the Right Technology

> Assemble a selection group composed of people from every part of the organization who will use the software, including key decision makers.
> Come to an agreement about the business processes that will be automated before looking at software. What are you trying to solve and/or improve?
> Factor in your company’s culture.
- If people are used to the freedom of choosing their work and working conditions, be careful not to choose a system that will destroy what people value most about their current business processes.
> Decide if you want an end-to-end, all-in-one package or one that integrates with current systems.
- Usually the latter are simpler and more cost-effective to implement – adheres to the “organic nature” of a company.
> Match the technology to your company size and the industry you’re in.
- Some solutions are better for small companies, some are designed for health-care enterprises and others for government services.
> Decide on your platform of choice.
- Will it be a thin-client Web-based one?
- Will it be a more traditional client/server model?
- Will it be an open-source or licensed solution?
> Don’t underestimate how long it will take to implement the package!

Preparation for the Presentation

Before presenting an idea or technology to management, prepare answers to the following questions:

> Where is the value?
- How will this idea/technology affect change in the company, and how will that change deliver value to your company?
- What are the $, resource and time costs to implement and support?
- What are the $ and time benefits after implementation?
> What will this idea/technology solve and/or improve?
- This should be a definite list of areas that will have a positive impact from the start.
- Long-term benefits should be categorized separately so there is strong awareness on short and long-term gains.
> Is there a strong “buy-in” within your company?
- The greater our community supports the implementation of an idea/technology, the higher level of success can be attained.

> Your Official Proposal
- Executive Summary
- Management, Key Personnel and Business Partners Involved
- Description of Idea/Technology
- Implementation Plan
- Management Plan
- Financial Evidence and Projections
- Supporting Documents

Gathering Feedback

After your official proposal is submitted, gathering feedback is critical to help re-enforce and/or improve the idea/technology being recommended.

> Specific areas requiring feedback:
- Quality of proposal
- Overall score on the idea/technology
- Areas requiring improvement
- Recommendations on improving the budget, timeline and resources for the implementation and support of the idea/technology
- What alternatives can be recommended
- Has it been done before at your company, and if so why did it not succeed
- What external resources have done in the past (ask friends, relatives, prior coworkers etc.)