Monday, November 19, 2007

An unfortunate juxtaposition - Web 2.0 and Tulips

In certain circles, there's a lot of talk about how [whatever] 2.0 and social [whatever] are the most powerful enablers today.

But when Mashable quotes from Marketing Sherpa, an unintended message is being delivered.

First, here's the introduction to the Marketing Sherpa article:

While online video advertising is gaining a ton of traction, it’s still unusual to see a video in email from an ecommerce site that isn’t an entertainment or automotive brand.

See how a floral eretailer tested video in an email on a shoestring budget and saw clickthroughs jump 25.8%. Plus, they doubled their normal conversion rate and learned a handful of lessons along the way.

Sounds impressive, doesn't it? But look at what you learn when you dig in to the specific product being offered:

Next, they set up a prominent still photograph of tulips...

Rut roh.

Word of advice - when talking about revolutionary business processes, you do NOT want to use tulips as an example. People are already attaching the term "Tulipmania" to the whole 2.0 thingie:

"There's definitely a lot of betting going on, and it's not rational." - Book publisher and conference thrower Tim O'Reilly, who coined the phrase Web 2.0, on the Bubble-style amounts of money going into Internet start-ups as quoted in the New York Times where he worries that the Valley is "minting too many copycat companies, half-baked business plans and overpriced buy-outs." The trend in valuing social sites, the latest investment fad, is to count users and ignore any P&Ls.

So please don't cite tulips as an example. Investors won't like it.

By the way, if you're not familiar with Tulipmania 1.0, here's an account:

Fortunes were doubled in the blink of an eye. Poor men became rich, and rich men became filthy rich -- without doing a day's work. In the wildly speculative marketplace, even the threat of government crackdowns couldn't halt the illegal trading of the hottest commodity in 17th century Holland -- tulip bulbs....

By the 17th century, horticultural experimenting created many new breeds of tulips. Clusius' tulips caused a sensation. Their beauty and rarity caught the national fancy. In no time, they became "the rage" as aristocrats flaunted the exotic flowers as symbols of power and prestige.

When the middle classes began to realize how much money the upper classes spent on tulip bulbs -- and how much money they made selling them -- they sensed a "fool-proof" get-rich-quick opportunity. Soon all tiers of Dutch society were swept up in a tulip trading craze that peaked in the 1630s, selling "futures" on crops not yet grown or harvested.

Bulbs were sold by weight, usually while they were still in the ground. All one had to do to become rich was to plant them and wait. The buying and selling of a product as invisible as un-sprouted flowers came to be called the "wind trade." as the speculative prices were being made up out of thin air....

People were desperate to cash in on the bulb-trading frenzy! Small businesses were sold and family jewels were traded....

The bottom fell out of the market during 1637, when a gathering of bulb merchants could not get the usual inflated prices for their bulbs. Word quickly spread, and the market crashed.Thousands of Dutch businessmen, many among the country's leading economic powerbrokers, were ruined in less than two months' time -- extremely rapid deployment of bad news for 1637! After the market crashed in 1637, bankrupting many, the era came to be known as "Tulipmania" or "Tulipomania."...

Lesson learned? Probably not.

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Csalomonlee said...

LOL - thanks for the history lesson!

Ontario Emperor said...

As an economics major in college, the mention of "tulips" stuck out like a sore thumb.