The Frenzy of Fads - 3

In The Frenzy of Fads 1 I listed seven dynamics in the popular euphoria of fads and argued that prevalent forms of social media were fads, and corresponded to the following typologies:

• Fads must be by their nature ephemeral.
• Fads always touch a basic human and are proxies for something more important
• Fads must evince their own language.
• Fads usually have a strong element of play, display or behavioral narcissism
• Fads often attach themselves to sub-cultures or pre-ordained tribes
• Fads usually provoke a ‘blame and claim’ matrix
• Fads attract investment value which is always hard to sustain long term.


As a passionate analyst of fads I use the term without prejudice.

In The Frenzy of Fads 2 I focused on the sixth typology – ‘the blame and claim matrix’ where evangelists of the fad make outlandish claims on their behalf, and as they are more widely adopted by the wider society a tipping point is reached and the mainstream media begin to ‘blame’ the fad for a whole range of social ills. This tension between claiming and blaming is now very prevalent in some forms of social media especially Facebook and Bebo. We can almost date the start of that process to April 2007 when The Guardian published an article The Dark Side of Facebook, article blaming social networks are now a daily occurrence in the traditional media.

The seventh typology of fads is based on investment and for many people it’s the one that provokes the greatest dispute. When is a social fad a recreational diversion and when does it become a sustainable business?

Recently Twitter the real time micro-blogging service has generated an euphoria of interest and uptake, and has closed a $35m (£24m) round of venture investment. Not stellar money but not to be tweeted at either. Painfully, this investment coincided with the collapse in ITV’s share price and the news that they are to divest themselves of the most over-promoted social media fad of recent times, Friends Reunited.

In order to fully understand what is going on here, it is important to try to discount two salient factors. First the often inflated prices of technology stock investment, which pre-date web 2.0 social media by decades, and secondly the current recession which has taken risk capital out of the market. Twitter has benefited from the first but perhaps been held back by the second.
All fads make risky investments. Euphoria can raise a false perception of long term worth and social fads are often promoted by early-adopters who are prone to be ahead of the mainstreams but often detached from a grounded reality. It is hard to get an early adopter to imagine further than the next technology to adopt.

A very good example is the Tesamade an automatic technology device for making tea which was described by The Guardian as: “the greatest advancement in civilization since the aqueduct.” Its a slightly exaggerated claim but no more than some of the claims that Guardian Technology has made on behalf of Twitter. Anyone interested in this fad should look at the dedicated e-commerce site Teawaker.com which even sounds like Twitter.

What is fascinating about the Teasmade is that the IPR is owned by a company called Goblin since 1932 and yet the social object has only managed to sustain value for a relatively short period of time in the 70s and has now tipped to kitsch nostalgia.

The debate about how long Twitter can sustain value has begun in earnest and the pressure of investment will multiply those anxieties. Like Facebook and its recent backtracking over data and personal information, Twitter is likely to offend its early adopters, attract the ‘wrong kind’ of users, and so the euphoria will be tinted with a mixture of realism, animosity and a culture of ‘wanting to move-on.’ This was a familiar story with the King off fads the hula-and which began as a cane-ring game on the beaches of Australia, until the Wham-O corporation marketed hula hoops in the USA, selling 100 million over that summer, turning into a surf game into a garish plastic toy. Other fads like the rubix tube have been even easier to mass market.

One of Twitter’s strengths is that it is a branded-technology not a manufacturing product and its short term value is proven – it is a matter of fact. With up to 6m users to ‘follow’, brands like Dell reportedly made $1m in sales by promoting discounts and offers on Twitter over Christmas. But the journey from fad to value is far from simple. Twitter has already been encouraged to look to monetize data, information and anonymous demographic information, which find a market in the market research industries. Others have proposed Twitter as a back-end channel to and from television.

What cannot be sustained is the current level of frenetic interest and there may even be signs that the mainstream media are retaliating and preparing to turn on Twitter. Since fads always connect to a deeper human need, in Twitter’s case the compelling need to stay in touch, there is every likelihood that a new generation of real time tools will emerge to cast Twitter into the currently unimaginable role as a piece of nostalgia.

Like so many great fads, its value will probably be fleeting and really time-specific and that is not what investors want to hear.
They are buying a business not a Zoot Suit