Back in 2002, Ross Mayfield co-founded Socialtext, a company that sells enterprise wikis to companies looking to collaborate on key projects, improve products and customer service.
True to form for a Silicon Valley start-up, Mayfield and his co-founders started the company with $5,000 cash and a $400 eMachine as the company's first server, which the 37-year-old president and chairman now uses as a stand for the monitor in his office at the company's headquarters in Palo Alto. Since its founding, Socialtext has taken a few healthy rounds of venture capital funding, and claims the likes of companies such as Kodak, Dell and Nokia on its customer list.
CIO's C.G. Lynch chatted with Mayfield to see what the Socialtext wiki is all about, and what it might mean to companies with traditional IT systems.
CIO: Tell me about how you came up for the idea for Socialtext.
Mayfield: Back in 2002, I co-founded the company with three other people. What we saw were these new kinds of tools emerging in the middle of the first recession for the Valley. A lot of blogging took off solely because of the high rates of unemployment. We saw an opportunity with these tools, which were first arising for consumers, to adapt them for enterprise use. I wanted to start an enterprise blogging company, but was smart enough to listen to my co-founder and CTO who showed me what a Wiki was as well. We picked that as the starting point for this journey.
Ward Cunningham invented the wiki 11 years ago. Initially as an open source tool, the dominant use of Wikis was a small engineering group using it for project communication and lightweight documentation, and as a result accelerating project cycles. Then as we came on to the scene, one of the things we focused on was making these tools simpler and easier to use for regular business people. So the use case shifted, at least for us, to non-technical users using it as a general and simple collaboration tool.
Why wikis and other pieces of social software for the enterprise? What's wrong with current corporate systems?
Mayfield: The way organizations adapt, survive and be productive is through the social interaction that happens outside the lines that we draw by hierarchy, process and organizational structure. The first form of social software to really take off to facilitate these discussions was email. The "reply all" feature was fantastic for forming groups, communicating, and getting some things done, but it's also been stretched thin. Because of its popularity, we use it for everything. It creates what the Gartner Group calls occupational spam, and it makes up 30 percent of email. It's when you CC, blind CC, or reply to all. Consistently, with our customer base, that 30 percent moves over to the wiki. So e-mail is a big part of it.
Traditional enterprise software is the other. If you think about traditional enterprise software, it's top down, highly structured, and is made for rigid business rules. The entire goal is automation of business process to drive down cost. But the net result is someone goes and buys SAP, implements the same 15,000 business processes that it comes with, and all they're doing is paying the ante to stay in the round. They don't gain any competitive advantage. Most employees don't spend their time executing business process. That's a myth. They spend most of their time handling exceptions to business process. That's what they're doing in their [e-mail] inbox for four hours a day. Email has become the great exception handler.
Unfortunately, what it means is all the learning disappears because it's hidden away in people's inbox. It's not searchable and discoverable or findable through tags and folksonomies. And so just simply moving some of that exception handling into a more transparent, searchable, and discoverable Wiki means that you have the opportunity to gain a different kind of competitive advantage. John Seely Brown and John Hagel wrote this book recently called The Only Sustainable Edge , and there they suggest that the greatest source of sustainable innovation is how you're handling these exceptions to business process.
So at the edge of your organization, there are all kinds of exceptions that are happening. If you handle them appropriately, you can adapt to where the market is going. You can adapt to the problems you have in your existing structures. So I've always looked at it as we're doing the other half of enterprise software: making this unstructured information transparent.
What types of challenges are your customers looking to address with an enterprise wiki like yours?
Mayfield: Over the last four years, we've defined four core areas that pop up in almost every single enterprise deployment that we end up doing. The first of the four solution areas is collaborative intelligence. It's the pattern of the core publishing to the edge, the edge giving feedback, and the edge interacting with the edge. So for example, in marketing and sales operations, you need to communicate to the field organization about an ever changing product line. You need the capability not just to communicate easily with these people, but to be able to get collaborative intelligence to bubble up from them, allowing you to maybe even form a better product design.
The second use case is a participatory knowledge base. So at Dell, for instance, we did a knowledge base for their call center. Their call center handles exceptions. That's what they do all day long. Answer a call, hear the problem, look for an answer, and then they don't have the information. Now, [with a wiki], they tap the informal network that exists inside the call center and document the solution. 99 percent of the pages created [on the wiki] and tagged allow the call center to go from 20 clicks to find information to four, substantially decreasing search costs and decreasing the average call time by 10 to 20 percent.
The third area is flexible client collaboration. This is a professional services firm or other kind of group that sets up a collaborative workspace between them and the client. The fourth is business social networks, which is similar to collaborative intelligence. But instead of it being with the field, it's with your business partners or it's with your customers, where you're communicating to them, getting feedback from them, and they're interacting directly.
Social software companies often have a strange relationship with IT, seeing as line of business users can yank out the corporate credit card and buy your product as a hosted, Software as a Service (SaaS) offering. How do you interact with CIOs and IT departments?
Mayfield: We do demand engagement by line of business managers. We have a model where we have an open source version that anybody can grab, download, and install on their own for free. We have a SaaS version which has Socialtext Personal, which is free for up to six users. And the professional version, which is on a subscription SaaS basis, people could be using that without involving IT whatsoever. Our bread and butter, though, is our onsite deployments. We have a managed service appliance. We do pilots, for example, for less than $5,000 for 90 days for up to 100 users to get started. Those appliances &mdash you just drop it in and in ten minutes you're up and running.
Five years ago, we didn't deal with IT at all. But now we end up working with IT because it's an inevitability. We have things like an admin dashboard that we developed for IT, but pretty much every other feature beyond that is flat and accessible by every single other user. And that's purposeful, because otherwise what you end up doing is creating tools of control, and tools of control creates a barrier to collaboration. If you want to accomplish very big things with technology, it's not just IT; it's line of business management engaging the base of stakeholders and champions. I need to work with marketing or sales ops and somebody from the field to prototype and create the solution with them to give them literacy around it.
This idea of user-empowerment seems to get at the friction we see between users, who love applications in the consumer space, and IT, who still might feel an inclination towards control. Do you agree this tension exists?
Mayfield: I actually think the consumerization of IT is one of the biggest changes that's going to have profound impact on your readership. I think it happens in a couple of ways. The rate of innovation in the consumer sphere on the Web far outpaces what's happening in the enterprise. What that means is that there's new models that are being created that can be adapted that can be tested, and that's the role that we [Socialtext] will play.
There are massive demographic shifts that are happening. It's not just that the baby boomers are leaving the workforce at this alarming rate, and we've got to get some of their knowledge to be left in the firm before they leave. Recruiting talent is harder than it ever was.
The net gens, the 16 to 24 year olds, have grown up using the Internet as part of their daily life. This generation, the biggest demographic shift in history, is going to profoundly impact the enterprise. These are the folks who grew up doing their homework on Facebook, and at school that was called cheating. And they come to the workforce and do the same thing and it's called collaboration. They grew up using social software. They've actually look down on email. They think email is only for formal legal business communication. They've got five to seven instant messaging windows open at any one time. They're blogging. They're on social network tools. They leverage Wikipedia as much as they can. And then they come to the workforce and they're given SAP.
The reality is, what they'll end up doing is working around it because they can with SaaS and open source. They can serve their own needs without IT's involvement, whether you've got a policy against it or not. The issue isn't people spending time on Facebook; the issue is for IT is, are you taking advantage of the tool? What are you learning about this generation and their preferences for tools? How can you manage them differently? If you can manage them differently, you'll get tremendous rewards because they have immense talent, interests, and a drive to connect with other people, form groups, and be creative.